4 workplace considerations for employers right now

South African employers are discovering that employee wellbeing can no longer be siloed as a human resources concern. The businesses that thrive will be those that treat their people as the foundation of sustainable performance rather than a line item to be managed.

1 The impact of AI adoption 

As Artificial Intelligence (AI) becomes embedded in everyday work, South African employers are facing a new wellbeing challenge: helping employees adapt to rapid workplace change while maintaining productivity and resilience. According to BCG’s recent AI at Work research, 72% of South African employees now use AI regularly, placing the country among the world’s leading adopters. While 67% of regular AI users report higher job satisfaction, 41% also experience increased mental strain. 

In addition, 72% say AI has changed the skills required in their roles, with many spending more time directing AI systems than performing tasks themselves. “The conversation around workplace wellbeing has changed considerably,” says Glenn Simpson, Client Services Manager at Lyra Southern Africa. “Alongside financial pressures and economic uncertainty, employees are adapting to new technologies, learning new skills, and adjusting to changing ways of working.”

Lyra says organisations are increasingly seeing three key challenges emerge: pressure to continuously upskill, uncertainty about future career relevance, and digital fatigue caused by constant connectivity and information overload. While AI offers significant opportunities to improve efficiency and expand access to employee wellbeing services, Simpson cautions that technology alone is not the answer. “Sustainable performance requires investment in people, skills development, and healthy workplace practices.” He adds that successful AI adoption depends on balancing technological capability with human judgement, empathy and trust, as meaningful human connection remains central to effective wellbeing programmes. 

2 The hidden cost of absenteeism

Absenteeism remains one of the biggest hidden costs facing South African businesses. Estimates from Occupational Care South Africa and Statistics South Africa suggest it costs the economy more than R20bn annually, with around 15% of employees absent on any given day. Many organisations record absenteeism rates of 3.5% to 6%, well above the 1.5% considered healthy.

The impact extends far beyond lost working days. Deadlines slip, colleagues shoulder additional workloads, morale suffers, and employers incur higher overtime, temporary staffing and training costs. In industries such as manufacturing and construction, understaffing can also compromise safety. For employers, even small improvements deliver significant savings. A 1 000-person company averaging eight absence days per employee could lose around R26m a year. Reducing absenteeism by just 10% could recover approximately R2.6m.

“Absenteeism is a productivity and profitability issue that happens to sit in the HR file,” says Rene Richter, Reward and Benefits Lead Advisor at Paymenow. Richter believes financial stress is a major, but often overlooked, driver of absenteeism. Employees struggling with money are more likely to delay medical treatment, experience poor sleep, and lose focus at work.

One solution is earned wage access (EWA), which allows employees to access wages they have already earned before payday without taking on debt. According to Paymenow’s 2026 Impact Performance Report, 88% of users reported lower financial stress, while 94% said their quality of life had improved. “When financial stress declines, employees are more present, focused and productive,” says Richter. “Supporting financial wellbeing isn’t simply an HR initiative – it’s an investment in business performance.”

3 Employee mental health as an insurance risk 

Employee mental health has become a measurable business and insurance risk. The South African Depression and Anxiety Group (SADAG) estimates that one in six South Africans will experience a mental health disorder during their lifetime, with depression and anxiety among the country’s leading causes of disability. According to Ryno de Kock, Head of Distribution at PSG Insure, poor mental health can directly affect workplace performance and increase an organisation’s exposure to costly insurance claims. “A distracted employee who provides incorrect advice, misses a critical deadline or delivers flawed work exposes the business to professional indemnity claims,” says de Kock. “Lapses in concentration can also lead to accidents, equipment damage or operational failures that trigger liability claims.”

In highly regulated industries such as financial services, healthcare and law, impaired judgement can also result in regulatory penalties and reputational damage. South African employers have legal obligations to provide psychologically safe workplaces under legislation, including the Occupational Health and Safety Act and the Labour Relations Act. “Where an employer knew or reasonably should have known that an employee was at risk and did nothing about it, the basis for a claim may already exist,” de Kock explains.

He believes businesses should treat mental health as part of their overall risk management strategy by conducting regular risk assessments, offering employee assistance programmes, and training managers to identify signs of distress. “Mental health is a business continuity, operational and governance risk. Prevention, supported by appropriate insurance cover, is the best way to reduce exposure and protect both employees and the organisation.”

4 Focus on generational stability

Employee benefits have the potential to do far more than attract and retain talent – they can help close South Africa’s persistent wealth gap and create lasting financial security for families. According to Fikile Matabane, Executive: Employee Benefits at ASI Financial Services, employers should view benefits as a long-term investment in financial inclusion rather than simply a compliance requirement. “Employee benefits are one of the most powerful corporate levers available for closing the wealth gap in this country,” says Matabane.

For many employees, formal employment provides their only access to retirement savings, insurance and other financial protection. Matabane says comprehensive employee benefits can help break the cycle of intergenerational financial dependence, where young professionals support ageing parents who were unable to build sufficient retirement savings.

“When an employee has adequate retirement provision, they are not only securing their own future, but they are also freeing their children from the burden of supporting them in old age. That freedom is capital.” He believes employers have an important role to play in improving employees’ long-term financial wellbeing. “Employers who are serious about transformation cannot limit their focus to employment equity headcounts.” By combining robust retirement, health and risk benefits with financial education, businesses can improve employee wellbeing, strengthen productivity and help build more financially resilient families for generations to come.