With the initial national budget tabling first being delayed, and the debate over austerity measures now still ongoing, South Africa faces renewed economic turbulence, and now it’s down to the private sector to take an even larger role in supporting long-term growth. But while the government debates shortfalls, businesses are focusing on productivity gains through its biggest asset: human capital.
“Human capital is the single biggest cost driver for most South African businesses,” says Andrew Cook, Founder of HeadsUp, an AI-driven employee engagement platform that helps companies track workforce sentiment in real time. “But we’re not managing it as strategically as we should. Disengagement costs South African businesses billions annually in absenteeism, churn, and lost productivity, which ripples into every part of the economy.
“Our data has tracked organisations where, after improving employee engagement, we’ve seen a 15% reduction in churn and a 13% drop in unplanned absenteeism. If you’re managing a workforce of 20,000 employees and taking into account their average monthly salary, those savings can be significant,” explains Cook.
Employee engagement as a growth strategy
As the pressure mounts on consumers and businesses alike, many companies are focused on cutting costs as a means of navigating the uncertainty. For many facing this type of situation, investing in wellness and engagement initiatives as a priority right now seems unthinkable, because it’s ‘merely a nice-to-have,’ in a tough economy.
But Cook says the evidence shows otherwise. “Employee engagement that’s aligned with the values of the business isn’t a luxury. The impacts of disengagement can go far beyond short-term morale. When staff leave, companies lose critical institutional knowledge, and when productivity then inevitably dips, the overall customer experience suffers too. “It’s not just about the cost of replacing someone. Companies have to factor in the time and resources it takes for a new recruit to start performing at the same level, especially in high-skill or technical roles. That kind of operational disruption may not show up on the income statement immediately, but over time, it certainly has an impact.”
You can’t fix what you don’t measure
Despite growing awareness of these challenges, Cook says many businesses still rely on staff surveys that are too infrequent or too static to offer meaningful insights, and while most leaders intuitively understand the challenges in their teams, what they often lack is empirical evidence to support action. “Engagement is fluid because it’s impacted by so many different factors that fluctuate from organisational changes to employees’ personal finances. A once-off survey gives you a snapshot, but if you build your entire strategy around that one moment, you might be correcting for the wrong issue over the long term.”
Instead, real-time measurement can help businesses identify early warning signs, understand the drivers of disengagement, and test interventions based on evidence. “Some businesses are prone to focusing on overall engagement scores, but the score itself is less important than tracking outcomes. You need to track the right outcome for your business, whether that’s staff retention, reducing absenteeism or improving safety. It’s far more important to measure what matters,” notes Cook.
The cost of doing nothing is rising
Overcoming the misconception that optimising staff engagement is a ‘nice-to-have’ is the first hurdle, but many then get stuck on the next – being that such a new focus would be too big a project to implement. “But it doesn’t have to start with a big platform; just listening better and more often can make a material, measurable difference to ROI,” says Cook.
“Culture isn’t fluffy. Listening means understanding the underlying issues and taking action on them, whether that involves providing support, implementing structure, or making tough decisions. When businesses do that consistently, the financial benefits are real and extend to the economy as a whole.”
For companies looking to drive long-term performance in an unpredictable economic climate, prioritising employee engagement is a strategic decision that can have lasting benefits. While national policy debates continue, the private sector can’t afford to wait. Businesses that act now to listen better, measure smarter, and invest in their people will be better positioned to weather uncertainty and contribute to a more resilient, productive South African economy.