Articles

Convert employees' debt into savings

With the increasing indebtedness of South Africans and over 2 million garnishing orders in place, employers are being faced with increased absenteeism, low morale and unrealistic expectations come salary increase time.

Theuns Hanekom, co- founder of Blue Oak Systems, recently launched RESET. The web-based online application empowers employers to assist employees to – wherever possible - convert debt into improved personal monthly cash flow.

"The RESET approach is not about consolidating debt with a maximum loan – that is not always possible and often unrealistic and does not necessarily yield the greatest savings. RESET is however about establishing a debt structure which delivers the maximum monthly savings or improved cash flow for the employee," says Hanekom.

He points out that putting extra money in an employees’ pocket can have a marked effect on morale – thus addressing turnover rates, absenteeism and overall employer – employee wellbeing. Morale has drastically been effected for the worse, as the deterioration in economic conditions have affected employees and employers. Employees are desperate for a salary increase at a time when many companies cannot afford increased costs – and this creates a negative working environment. RESET can often unlock that extra cash flow needed by the employee.

The RESET application is very simple and takes a few minutes to complete.

"Firstly, RESET is conducted in a secure online environment. It's convenient and efficient. The employee captures his or her ID number and RESET collects the essential information on current unsecured debt from the Credit Bureau. RESET then calculates what consolidating loan amount the employee would require and which accounts, if settled, would yield the maximum monthly savings – the savings amount is provided to the employee within minutes. If the savings are deemed sufficient, then the employee moves to phase two which involves a specific report on how the savings can be realised," says Hanekom.

They can then either approach their own bank with the debt re-structure plan or move to the next phase which involves Blue Oak Systems handling the transaction A-Z on their behalf.

Blue Oak Systems charge a nominal fee for each of the vital online phases but are happy to discount the fees if employers are willing to subsidise employee use of RESET as part of their Employee Wellness/Assistance Programmes.

"The indebtedness of South Africans has a significant effect on productivity and the motivation levels of employers," Hanekom adds. "The problem is only going to increase as many consumers can no longer access additional loans. RESET cannot uncover savings in all instances, but in most cases it will show you how to reverse a negative monthly cash flow into savings up to R10 000 per month or more."