South African companies are losing profit because of HIV/AIDS
In South Africa, some 40% of South African manufacturing companies surveyed reported a reduction in profits due to HIV/AIDS. More than half reported lower productivity and increased levels of absenteeism. Losses to the manufacturing sector were due mainly to the effects of increased labour costs, a decrease in productivity and increased labour turnover.
An economic impact assessment can help your company understand the effects of the disease.
To understand the distinctive impact that HIV/AIDS will have, companies need to conduct a company-specific economic impact assessment. Its purpose is to study the workforce in relation to factors that are known, through research, to affect the way in which a company will experience the effects of the HIV/AIDS pandemic. These researched factors include: gender, age, job category, region/location, salary band, length of service and the percentage of workers who receive medical aid or a pension contribution.
Solid predictions will enable your company to develop strategies to mitigate the impact of the disease.
By using company-specific demographic and organisational factors, it is possible for Redpeg, through a process of actuarial modelling, to predict the following for the coming years:
The likely numbers of employees who will contract the disease, and how many employees are at each stage of the disease each year;
How many employees would need to be replaced because of deaths, early retirements and loss of productivity;
The likely cost to the company in terms of the impact of HIV-positive employees; loss of experienced employees; the recruitment, training and support of replacement employees; the costs of medical aid and pensions as well as a total cost figure relating to the impact of the disease.
It is clearly very important for companies to obtain the best possible predictions about the likely impact of HIV/AIDS on their business so that strategies may be implemented to maintain longer-term viability and economic sustainability.