Employee benefits aren't an expense, they're a safeguard for growth
How to start small, prove value, and build from there
Article 3 of the six-part founder insight series about Benefits That Matter: A Founder's Guide to Modern Employee Benefits
In many South African businesses, the conversation around benefits goes something like:
"We'll look at it next year — we just don't have the budget (or time) right now."
But what if the real risk isn't adding benefits - it's not adding them?
When teams feel unsupported, the effects show up in turnover, absenteeism, and slower performance. What looks like a saving today often turns into an even bigger expense tomorrow. For leaders and CFOs focused on cost control, it's time to rethink benefits as a risk mitigation measure; one that protects your most expensive and valuable asset: your people (and institutional knowledge).
The Hidden Price Tag of Under-Investing in Benefits
1. Turnover and Replacement Costs
Replacing employees is expensive - far more than just hiring a new person. Global benchmarks suggest that the true cost of replacing a team member can reach 100% to 150% of their annual salary, once you factor in recruitment, onboarding, training time, and lost productivity.
In South Africa, recent data shows an average staff turnover rate of 16.6%, meaning that, on average, companies lose roughly one in six employees every year. (EBnet)
Let's make that real.
If your company's total annual payroll is R10 million, a 16% turnover rate translates into R1.6 million to R2.4 million in replacement costs each year. Reducing that turnover to 10% brings the figure down to around R1 million to R1.5 million - a potential saving of R600 000 to R900 000 in avoided churn costs.
Now imagine allocating even a fraction of that saving to a small but strategic benefits programme - one that helps employees feel supported, valued, and secure. That investment could not only pay for itself, but multiply its return through improved retention, engagement, and performance.
In other words: keeping good people costs less than constantly replacing them.
2. Absenteeism and Presenteeism: The Silent Drain
When employees don't feel supported - whether financially, mentally, or physically - the impact shows up as lost working days and reduced productivity. Stress, burnout, and financial strain are leading drivers of absenteeism, and the ripple effects extend far beyond the individual.
When one person is absent, deadlines stretch, workloads increase, and pressure shifts onto colleagues. Over time, that added strain can create a cycle of burnout where one person's stress triggers another's. The result? Morale dips, teamwork weakens, and the overall pace of delivery slows down.
The fix doesn't need to be expensive:
- Enabling employee funded but payroll deducted benefits (such as pension savings or medical aid)that lead to immediate tax savings and more positive financial habits for medical aid or life cover, or
- Modest investment in financial-wellness tools,
- Access to wellbeing resources
all signal to employees that their employer cares. That support doesn't just reduce days of absenteeism; it also protects the rest of the team from the fatigue and frustration that often come with carrying the extra load.
3. Engagement and Performance Drop-Off
Employees who feel under-supported rarely quit immediately, they disengage first. They show up, but they're not fully present. And disengagement doesn't just affect the individual, it's contagious. A disengaged team member can quietly pull down the energy and output of an entire group. Others spend more time picking up slack or navigating mistakes, which leads to frustration, tension, and eventually, their own drop in motivation.
Gallup's research shows that up to 42% of turnover is preventable, and disengaged employees are less productive, less innovative, and more error-prone. Compensation and benefits are known to be critical employee retention factor.
Investing in benefits that address financial stress, wellbeing, and personal needs doesn't just improve individual morale, it protects team cohesion and performance. When people feel supported, they not only perform better themselves, they help others do the same. And that's how benefits quietly compound their value across an organisation.
Why Starting Now (Even Just Small) Makes Sense
If you're in the early stages of your benefits journey and still trying to justify budget, start with three mindset shifts:
- Benefit Mindset: Shift from "expense we'll delay" to "small investment, big signal." You don't need a large programme. Even enabling payroll deductions for retirement savings or medical cover helps your team build better financial habits and signals real care.
- Risk-Mitigation Mindset: Frame benefits as insurance against turnover and disengagement. Example KPI: "If we reduce turnover in key roles by 5%, we avoid replacement costs worth roughly 125% of those salaries."
- Measurement Mindset: Track the before and after:
- Turnover in critical roles
- Average sick days and unplanned absences
- Pulse checks on wellbeing or financial stress
- Time-to-fill vacancies.
Even small improvements in these areas translate into measurable financial return.
Overcoming the 'Mindspace' Pushback
One of the most common objections to benefits is not budget - it's bandwidth.
"We love the idea, but we don't have time to drive it right now."
You don't need a complex, months-long project to start improving employee support.
Here's how to make it simple and doable:
- Pick one foundation benefit: Start small. Introduce just one benefit (e.g., enabling employees to contribute to a retirement savings plan or medical aid through payroll).
- Set a realistic contribution: It's not about matching corporate packages. Even a small employer contribution - or simply enabling access - can have an outsized impact.
- Use plug-and-play solutions: Platforms like MyBento exist exactly for this reason; to help small and growing businesses launch modern, flexible benefits without needing a full HR or finance team to manage them.
- Communicate once, monitor simply: Roll out in one clear communication. "Here's what's new, here's how it works, and here's why we're doing it." Then track engagement, stress levels, or employee turnover after a few months.
- Iterate, don't over-engineer: Once your first benefit is running smoothly, you can build from there - increasing employer contributions or adding more flexible perks or wellbeing options over time.
Key takeaway: Don't wait for perfect conditions or big budgets. Momentum starts small - the important part is to start.
In Closing
When you delay investing in benefits you may believe you're saving money, but you risk paying elsewhere: in lost talent, in fragmented teams, in lower productivity and in higher operational costs. For leaders who see benefits as expenses, the mental shift is: benefits are value creators; they protect and enhance what your business already has: its people, their engagement and their loyalty.
If you are a business leader, ask yourself honestly: How many key roles can we afford to lose this year? What would it cost to replace them? Then ask: What's a plausible budget or resource investment we could start with that equals maybe 10% of that replacement-cost risk?
If you can commit today rather than waiting for "the perfect moment", you'll gain a strategic advantage. Because your competition might be doing the same quiet upgrade of their employee-support architecture.
