Wellness well worth the share price
bdlive.co.za - Jul 23rd 2015, 14:27
Retailer Mr Price does not have a wellness programme — "not an established one, we just do what we do", says Steve Glendinning, group people director for the company.
Yet Mr Price’s staff wellness programme was recently singled out as an example of excellence by executive headhunters Jack Hammer.
In a survey of 20 large South African companies, Jack Hammer found 89% believe that the "little extras", such as flexible working hours, telecommuting and additional employee support services" — all components of some employee wellness programmes — "really do make a difference to employee satisfaction and performance".
However, not many companies implement these programmes, especially not in their full range.
The survey, which polled top employers in the fast-moving consumer goods, banking, industrial, leisure, and mining sectors, showed that just more than half of the companies had implemented specific measures geared to increase employee happiness and satisfaction, despite the vast majority saying that introducing them was important and could improve performance.
Of the 44% of companies who failed to follow through, only one was considering doing so.
There are, of course, myriad iterations of these wellness programmes that have become the flavour of the month.
"There’s the trendy factor," says Glendinning. "In the last three years these programmes have come in and a whole industry has sprung up around them.
"In the 1990s, it was all around management and a whole industry sprang up around that.... I’d say you should be careful that you don’t get swayed by that, that instead you should do the simple basics that will mean people will want to work for you and stick with you."
For Mr Price, "the simple basics" idea starts with all 16,500 employees across SA being treated as share-holding "associates" rather than just paid employees. "That’s why we refer to them as associates. We really mean that they are associates. They have shares," says Glendinning.
The share scheme has worked out well for many Mr Price employees, most of whom are female and young when hired.
"The average age is less than 30. In SA and the rest of Africa, where we have stores, retail is very much an entry to work. For a lot of people it’s a first job," says Glendinning.
Although the share scheme is the bedrock of Mr Price’s "not a programme", ensuring the happiness of employees goes further than that.
Glendinning says the company headquarters’ "fashion-oriented, vibey atmosphere"; its remuneration and benefits; its implementation of suggestions from a biannual, independent survey of staff opinions on their happiness levels at work and what they think can be improved; its annual wellness days focused on physical health and "perks" such as hairdressers and podiatrists at its Durban headquarters are all part of Mr Price’s "not a wellness programme".
"It works," he says, pointing to the share price performance as evidence.
Mr Price’s diluted headline earnings per share increased 21% to 865.1c in the year ended March 2015. Total revenue grew 13.9% to R18.1bn and retail sales increased 13.5% to R17.3bn.
Jack Hammer CEO Debbie Goodman-Bhyat says one of the reasons that relatively few South African employers implement wellness programmes is that while almost everyone agrees that they improve employee satisfaction and performance, measuring their benefits is not easy.
"While there is enough data to show a likely and sometimes strong correlation between the variables being measured, it is almost impossible to predict the outcomes of investing in such programmes," she says.
For companies operating in SA’s tough economic environment — earlier this year the International Monetary Fund cut its economic growth forecast for SA for this year to 2% from 2.3% in October and reduced that for next year to 2.1% from 2.5% in January — nice-to-haves such as wellness programmes are often just that, nice to have.
"If you look, you will see that companies in the resources and industrial services sectors, where they are struggling with low margins, find it hard to justify this kind of thing to shareholders and management," says Goodman-Bhyat.
"But sectors like banking and financial services are not so crunched for budget, or they have already allocated budget to (wellness programmes)."
Research by the UK’s iOpener Institute, supported by Oxford University, shows that "the happiest" employees spend twice as much time on a task, have 65% more energy and intend to stay in their position four times longer than the "unhappier" ones, says iOpener co-founder Jessica Pryce-Jones.
These figures are drawn from the institute’s survey of more than 5,000 employees across more than 80 countries.
In SA at least, says Goodman-Bhyat, senior management and executive-level employees care about having these programmes, but their low-pay colleagues do not. "The view around wellness is different at lower levels — people would rather have a larger salary than a wellness programme at that level, it’s ‘show me the money’," she says.
While there is definitely "a bit of me-too" in the trend towards implementing these programmes, they are also a way of dealing with the loss of the ethic of loyalty, says Goodman-Bhyat.
"It is highly unlikely for 20-to 30-year-olds, or even 30-to 50-year-olds to be completely loyal — the idea of loyalty has been eroded — these programmes ultimately impact on output.... It’s trying to get the most out of people while they are there," she says.
"It’s about being in a good relationship with them so that they will work their backsides off and you will get the most out of them for the time that they are there."
In addition, in sectors in which people are a company’s chief asset — in the sense that there is no other tangible product — companies are often forced to view employee wellness as an investment instead of a cost, Goodman-Bhyat says.
Employee wellness programmes had their genesis in brightening up the bottom line through improving physical health and reducing days lost to illness, mostly by offering access to general health check-up tests such as body mass index, blood pressure, blood sugar and so on.
But according to Independent Counselling and Advisory Services (ICAS) Southern Africa, part of ICAS International, a global provider of behavioural risk management service, the top work-related problems in SA between January 2010 and June this year were predominantly management-related.
Work-related problems reported to ICAS increased from 9,325 in 2010 to 21,933 last year. The biggest one was relationship conflict (18.59%), followed by work-life balance (12.68%) and work discontent (11.7%).
For Mr Price, however, treating employees well has been part of the business’s ethos from the get-go.
"It’s always been inherent," says Glendinning. "I was a little taken aback when I joined four or five years ago... but retail is a harsh environment, so it is about our employees at least having a decent day while they are here."From DFM Publishers (Pty) Ltd
Tough economy put a chill on Mr Price retail sales
23/08/2019 - 09:24
A tough economic climate has put pressure on Mr Price's fashion retail sales, as customer spending remained constrained, the company said in a trading statement for the first four months of its financial year ended March 28.
Mr Price rethinks international strategy after leaving Australia
03/06/2019 - 13:52
Mr Price Group’s new CEO wants the retailer to take a new approach to offshore growth after the group pulled the plug on its fledgling Australian business and as it considers doing the same in Poland.
Mr Price Group's shares rally on annual results
31/05/2019 - 10:16
Mr Price Group’s shares opened sharply higher after the company raised its annual dividend thanks to better earnings.
The signs are here that South Africa has reached its economic crossroad
03/12/2018 - 11:37
While South Africa attempts to shore up its own economy amid high inflation rates and a stuttering inherited financial system, the continent as a whole continues to grow. The big question, though, is whether South Africa will get left behind in terms of international investment if it doesn’t improve its financial situation, and how to avoid this.
Mr Price boosted by improved perception
27/11/2018 - 08:23
Improved consumer perception of Mr Price's quality and fashion helped it grow sales and profit in the first half of its 2019 financial year.