Tag: money

South African households are under pressure

According to the latest Old Mutual Savings & Investment Monitor report, South African households remain under pressure.

The report is based on 1 000 household interviews among working South Africans living in major metropolitan areas, and shows how consumers are being forced to tighten their belts.

Findings include:

  • A need to to cut back on monthly spending just to make it to the next payday
  • An increase in households under financial stress
  • Middle- and upper-income households are showing strain
  • 42% of respondents said they struggle to make ends meet each month
  • 73% of respondents said they are constantly worried about having enough money
  • 58% of respondents said they do not feel financially secure enough to cover an unplanned emergency
  • 60% of respondents do not feel confident that government will be able to provide for them and their families if they cannot do it themselves
  • Consumers are cutting back on expensive food and clothing purchases
  • Households are cutting back on entertainment and entertaining, reducing how often they go out, or have friends and family over for a social gathering
  • 15% of people indicate they will cutting back on using domestic workers
  • 79% of households indicated they do not employ a domestic worker at all

Government runs out of money

Pay insecurity is on the rise amongst state-owned enterprises and municipalities as it seems the government is running out of money.

A recent Business Tech article illustrates this, listing the likes of Denel, Metrorail, Prasa and the SABC as not having paid staff on time.

Municipalities in trouble

  • 30 municipalities in the country have not paid employees due to lack of funds
  • Employees at the Amahlati municipality in the Eastern Cape were last paid in April
  • The latest report from the auditor general showed a shocking decline in the state of the country’s municipalities over the last year
  • 257 municipalities and 21 municipal entities were audited for the 2017-18 financial year
  • 63 municipalities regressed
  • 22 improved improved
  • Only 18 municipalities obtained a clean audit by producing quality financial statements and performance reports, as well as complying with all key legislation

Big bailouts

A large portion of South Africa’s state companies are currently heavily reliant on the state for bailouts.

  • The SABC is currently waiting on government approval of a R3.2-billion bailout
  • Eskom has a R69-billion guaranteed pledge from the government coming in over the next three years
  • SAA needed over R21-billion from government to fully implement its turnaround strategy, but had to turn to private funding after the government could not meet its needs.

FNB accidentally gives clients free money

On Tuesday it emerged that FNB accidentally gave a number of its clients free money. The extra funds ranged from a few hundred rand to over R3 000.

FNB said that this was due to an error which is being rectified. Recipients of the extra funds will be required to pay it back, as unjustifiable enrichment can be reversed, an attorney told Business Insider South Africa.

The error appears to be due to delayed debit card transactions. FNB says that they have been in contact with clients who received the extra funds.

Retrieving the additional funds will not necessarily be an easy task, as the bank may find it difficult to extract the money from clients who have already spent it.

FNB has not revealed how much extra money was accidentally given away in total, nor how many people in total received money.

PIC has 15 days to recoup AYO billions

By Sibongile Khumalo for Fin24

The PIC says it has appointed Gwina Attorneys to assist it in recovering the R4.3bn capital it invested in AYO Technology Solutions.

The state asset manager confirmed on Tuesday that it was issued a compliance notice on February 21 which requires it to recover the capital investment made to AYO within 15 business days of the date of the notice, and provide the commissioner of the Companies and Intellectual Property Commission (CIPC) with confirmation.

According to the notice, it must also recover any interest that may have accrued on the investment within six months.

The CIPC stated that based on the available turnover figures, the PIC did not act in good faith and in the best of interest of the company when “it decided to invest the disproportionate amount of R4.3bn in AYO”.

The watchdog added that the PIC failed its fiduciary responsibility and put the PIC in jeopardy. According to the CIPC, failure to comply with the notice may result in prosecution, with a maximum fine or 12 months imprisonment.

The PIC said it was looking into the matter.

On Tuesday afternoon, AYO said it believed there were no grounds for the CIPC to order the PIC to recoup its investment in the company.

It said it had not seen the compliance notice, but added that it believed the notice was possibly influenced by a disinformation campaign of “media houses and individual journalists”.

In a notice to shareholders on Tuesday afternoon, AYO said: “Both the PIC and AYO should have been consulted and had sight of the notice.”

It added: “AYO further believes that CIPC, by failing to inform and provide it with a copy of the Notice to the PIC, has acted contrary to the provisions of the Promotion of Administrative Justice Act.”

The CIPC was established under the Companies Act to assist with registering companies, monitoring disclosure of information on business registers, licencing business rescue practitioners, and monitoring compliance with relevant financial legislation, among other things.

AYO is linked to businessman Iqbal Survé, the executive chairman of Independent News Media, who holds an indirect stake in AYO through African Equity Empowerment Investments. Survé once described Matjila as a friend, according to evidence by PIC Assistant Portfolio Manager, Victor Seanie.

Edcon Holdings is making progress toward securing R3-billion in funding need to keep the South African clothing retailer afloat for another three years, according to Business Day.

The Public Investment Corporation (PIC), Africa’s biggest money manager, may provide R1.8-billion to assist the company. In addition,  landlords may contribute another R700-million in reduced rent, and Edcon’s banks about R500m, they said.

Meanwhile, according to an article by MoneyWeb, Edcon aims to take the following steps in a bid to downsize:

  • Reduce the size of its Edgars store in the Johannesburg CBD by a third
  • Close down its big Melrose Arch store
  • Reduce its footprint at shopping centres across the country
  • Reduce regional footprints in centres such as Mall of Africa, Eastgate and Gateway
  • Continue with closing smaller stores across the country (115 have been closed to date)
  • Downsizing several stores
  • Continue to reduce retail space – in 18 months, Edcon has already downsized by 7%
  • Reduce space nationally by 5% – 7% per year over the next few years

Edcon is one of the country’s biggest employers. It has 1 200 stores which employ approximately 30 000 permanent and casual workers.
Over 100 000 jobs are supported by the company when clothing suppliers and other service providers are included.

 

By Paige dos Santos, digital lead at SAP Africa

What would you do if you didn’t need the money? It’s not a question we often give much serious thought to, but it may very well be one that we need to answer in the next few decades. The advent of the internet was expected to result in widespread economic democratisation; instead, it has resulted in increased polarisation of wealth – creating a small number of uber rich. According to the World Economic Forum’s Global Risks Report for 2017, between 2009 and 2012 the income of the top 1% in the US grew by 31% , compared with less than 0.5% for the remaining 99%.

This trend is likely to become exacerbated as digital concentration continues unchecked. This level of polarisation cannot sustain itself in the long term and could result in social upheaval. The shifting role of organisations in this new paradigm requires many traditional organisations to fundamentally rethink their reason for being and their approach to their employee value propositions, both now and into the future.

Seismic societal shifts

Murmurings of public policy response can already be seen internationally. Over the last few weeks, the United Kingdom announced the introduction of Digital Services Tax, a 2% revenue charge on “specific digital business models,” predominantly targeting tech giants such as Google, Amazon and Facebook. However, the situation we find ourselves in might well require action that is a little more radical. Yanis Varoufakis, Greek economist, academic and politician, posits that a new approach is in fact imperative to the stability of civilisation. Enter the Universal Basic Income. Call it an obligation-free dividend if you will. Universal Basic Income is a fixed income bestowed upon each citizen of a country every month – regardless of income, resources or employment status. The World Economic Forum 2018 featured several discussions exploring the concept.

Would such an approach result in sloth-like existences for us all? Will we become the embodiment of the “idle-hands” saying? Perhaps not. Several studies are currently investigating the impact of universal basic income, two of which are underway on the African continent. Studies in Uganda showed that recipients of a basic income worked an average of 17% more hours per day, increased business assets by 57% and reported a reduction in spending on vices such as alcohol and cigarettes. The reason? For the first time, people had hope.

Concurrently to digital economic concentration, our global population is burgeoning rapidly, heading towards what Charles C. Mann points out is biological ‘outbreak’ status. Our beautiful planet has finite resources. If we continue to take these for granted by pursuing linear, consumption-driven economic development approaches, we will only see an acceleration of the difficulties we are starting to face globally: choking pollution, food shortages, extreme weather and more. We urgently need to find ways to preserve our world for years to come by redesigning our processes and economies to conserve and optimise, rather than consume and monopolise.

The UN Sustainable Development Goals provide highly visible targets around this. These problems are too big for governments alone to solve. Public private partnerships, and responsible corporate citizens, are essential to making this a reality. This is something that SAP is taking very seriously, contributing to the adoption of technology to help the world run better and improve people’s lives. Purpose needs to be something indistinguishable from our core business. It should define what we do and why we do it, contributing to a beautiful world for generations to come.

Systemic purpose

Let’s revisit the opening question. In light of our changing society, if you had enough money to cover your basic expenses, what kind of an organisation would you want to work for? One that chased profits above all else, or one that really had a higher purpose? A study undertaken by BetterUp found that workers would be willing to forego 23% of their entire future lifetime earnings in order to have a job that was always meaningful.

Engaging your total workforce around organisational purpose can be hugely beneficial, creating significant opportunity for organic and innovation driven growth. However, this is easier said than done. As organisations metamorphose to perform in the digital age, talent models are changing. The skillsets required are in a constant state of flux, and the gig-economy is booming in response to this. According to Deloitte Human Capital Trends Report 2018, more than 40% of workers in the US are now engaged in alternative work arrangements – contracting or gig working.

With such high percentages of an organisation’s human talent involved in external work arrangements, it’s essential to ensure that they are engaged and contributing to the organisations purpose too. Technology tools are available to assist customers in achieving this level of integrated engagement by approaching workforce management holistically. The SAP SuccessFactors and Fieldglass solutions integrate powerfully to ensure that both your internal and external workforce are striving towards a shared sense of purpose, and that individuals can see the impact of their efforts. At the same time, the solution suite manages the ever-present external workforce risks from a legal, security and privacy perspective.

Interlock – combining intuition and logic

When you are working for a purpose you truly believe in, you want to be able to add as much value as possible to that purpose every day. But as humans, we are fallible creatures. We often believe we are being logical and pragmatic, when the reality is that, according to research performed by Daniel Kahneman and his associates, we are primarily using our automatic intuitive responses rather than our logic-based ones. This is where intelligent systems are providing us with remarkable tools that ensure we get the right insights, at the right time, to equip us to make the best logical decisions for our organisations and minimise heuristic bias.

Consider the recruitment process. SAP SuccessFactors uses in-built machine learning analysis to ensure that job specifications created by managers are worded to equally attract male and female candidates, directly impacting gender diversity in the workplace. If the description contains too many masculine-oriented words, the system will automatically suggest replacing certain words and provide appropriate synonyms. This results in a gender-balanced job specification.

When embarking on new projects, SAP Fieldglass Live Insights enables organisations to identify the best geographic locations for the project, based on critical success factors. The solution scans SAP Fieldglass data on contract workers countrywide to recommend the best location based on resource skill level, availability and cost. Tools such as these enable our employees and organisations to perform at optimal levels, making the best possible decisions for their organisations and in turn, achieving their purpose.

The potential to thrive

If you didn’t have to work, would you choose to spend 18 hours a day at the office, sacrificing your family life and mental and physical wellness? And if by chance you did, would you be performing optimally? In the digital world, human creativity, curiosity and resilience are essential to personal and organisational performance, to achieving the purpose the organisation is driving towards. These characteristics are most evident when employees thrive, which is why special attention needs to be paid to the link between wellness and performance at work.

SAP, in collaboration with Ariana Huffington’s Thrive Global, has developed a solution that brings these together: SAP Worklife. SAP Worklife combines data on critical health indicators such as sleep, exercise, diet and mental health, with performance, development and employee satisfaction. The insight it provides enables HR professionals and managers to nurture talent to become the best they can be, in every aspect of life. Imagine the impact of unlocking curiosity and creativity across your organisation, and the energy of working with a team who are truly fulfilling their potential, not just as workers, but as human beings.

Universal basic income is just one of many possibilities that may unfold as we journey into exciting new frontiers as a human race. As our natural resources come under increased pressure and our societies start to shift, we need to pay careful attention to the change. Are we stubbornly focused on the immediate time horizon, ignoring the emerging reality of the next five years in order to fight fires for the next six to twelve months? Or are we thinking further ahead?

It’s time to be honest when you answer the question – would your employees still work for you if they didn’t need the money?

Black Friday weekend in numbers

According to an article by Business Tech, online sales for Black Friday and Cyber Monday 2018 exceeded figures for 2017.

BankservAfrica provided Business Tech with the following figures on one of the biggest shopping days of the year:

  • A total of 581 189 online transactions were processed over the weekend
  • 404 594 online transactions were recorded on Black Friday
  • The single most expensive transaction for Black Friday was over R6-million
  • The single most expensive transaction for Cyber Monday was R5-million
  • Black Friday shopping peaked between 08h00 and 09h00
  • Cyber Monday shopping peaked between 10h00 and 11h00
  • The average number of transactions per minute peaked at 695 on Black Friday
  • Transactions averaged at 281 per minute on Black Friday
  • The average number of transactions per minute peaked at 277 on Cyber Monday
  • Transactions averaged at 1251 per minute on Cyber Monday
  • Black Friday saw 55% year-on-year growth in online transactions
  • Cyber Monday transactions were up 36% year-on-year 

The United States, where the trend originated, also saw some big numbers:

  • Cyber Monday sales surged to a record $7.9-billion spent online
  • This is a year-on-year increase of 19.3%
  • Black Friday pulled in a record $6.22-billion in e-commerce sales
  • Transactions on mobile devices were up 55.6% on Cyber Monday, generating $2.2-billion in sales
  • Cyber Monday marked the biggest shopping day in Amazon’s history
  • Amazon Black Friday and Cyber Monday combined saw the purchase 18-million toys and more than 13-million fashion items

Edcon may run out of money in 2019

According to a report by the Financial Mail, Edgars may “effectively run out capital towards the end of 2019”.

After Bain Capital paid R25-billion for the company, the retailer’s balance sheet saw debt of R17.3-billion – an amount that nearly sank the company as the 2008 financial crisis hit.

Since 2012, Edcon has lost an estimated 22% of its clothing and footwear market share where it once held more than 50% of the sector, according to Financial Mail.

Edcon still owes an estimated R7-billion to its lenders.

On a positive note, Stats SA reported that retail sales grew 2.5% for the year to August — almost twice the 1.4% annualised growth reported in July.

The problem is, says the Financial Mail, that Edcon is making a loss, and “someone has to fund the loss”. This falls to the shareholders and the problem under discussion is “how long will they fund these losses”?

Edcon’s most recent set of accounts, for the year to March 2018, saw sales down 4.8% to R24.1-billion. Trading losses ballooned to R1.36-billion from R373-million in 2017. Even though R20-billion in debt was written off in 2016, Edcon incurred R1.53-billion in “financing costs” to repay remaining debt. The three months to June were no better: sales were down 8.8%, and the quarter saw trading losses of R225-million.

The lack of customers are evident at even flagship Edgars stores. “At Melrose Arch, most of the initial space Edgars occupied is boarded up, reinforcing the impression of a gradually disintegrating department store,” reports Financial Mail.

As many as one in five South Africans used to shop at one of the 1 350 stores owned by Edcon. Despite the downward trend, Edgars has remained SA’s largest nonfood retailer, accounting for nearly a third of the clothing and footwear market.

The company employs more than 27 000 staff members, with an indirect effect on a further 100 000 people.

$17.4bn wiped off Zuckerberg’s fortune

By Melanie Kramer for Money Makers

Facebook founder and CEO Mark Zuckerberg has lost $17.4 billion, suffering from Facebook’s reputation and share price this year. He’s not the only billionaire to lose out in 2018, but he’s currently the most famous and has certainly lost more than any other.

Zuckerberg has dropped from being the third-richest person in the world to becoming the sixth richest, according to Bloomberg’s Billionaires Index. Zuckerberg now has a net worth of $55.3 billion.

The Facebook founder has faced increasing criticism over the ongoing Cambridge Analytica data scandal and Facebook’s response to the apparent social media influence exerted by Russia in US elections.

Data privacy is still an unresolved issue in the eyes of many global governments. Some seek answers over how their citizen’s personal information is handled and how Facebook will prevent illicit behavior in the future.

Just two weeks ago the UK and Canadian Parliaments summoned Zuckerberg to personally answer their questions, in an unprecedented joint move.

Facebook shares fell 3% on Friday to their lowest point since April 2017, and to a value of $139.53.

The latest fall in Facebook’s share price followed a call last week by four US Democratic senators to answer questions about Facebook’s use of contractors to spread “intentionally inflammatory information.”

According to reports, Facebook had hired a consulting firm founded by Republican strategists as part of its response to the concerns over Russian meddling. The firm’s subsequent actions are under scrutiny.

Zuckerberg’s Chan Zuckerberg Initiative is a major US political donor and Facebook co-founder Dustin Moskovitz has also donated over $35 million to Democratic and Liberal candidates and groups.

Which IT job pays best in South Africa?

Source: CareerJunction

Jobs portal CareerJunction has published it latest salary review for 2018, showing among others what the average IT employee earns per month.

CareerJunction used actual salary offerings on their jobs portal Web site (16 000+ jobs monthly) for the latest measurable period (December 2017 to May 2018).

Skill levels covered in the report include both intermediate and senior.

IT management jobs saw the biggest jump in salary, moving from R59 490 per month to R66 010 (11%). Systems analysts were the worse hit by decreases, losing 17.1% in value over the year (from R42 420 to R35 170).


Image credit: Business Tech

Regional salary differences

The Western Cape and Gauteng remain favourable locations to work for IT professionals. Salaries in these regions are very close to the national average while salaries in KwaZulu-Natal are not nearly as competitive.

The salary ranges above are based on monthly “cost to company” remuneration and only serve as an indication of the average salary offerings for each occupation.

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My Office News Ⓒ 2017 - Designed by A Collective


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