Bahrain's Takaud eyeing major Mena push
Manama, April 30, 2014
By Avinash Saxena
Bahrain-based Takaud, the Middle East and North Africa's (Mena) first specialist savings and pensions solutions provider, plans to have a presence across the region over the next seven years, said a top company official.
"Our research has revealed that there is a large and unmet demand throughout the region for low-risk, long-term pension products with secure and reasonable returns," Takaud acting chief executive Eric Van Biesen told the Gulf Daily News, our sister publication.
"Bahrain is where we are doing our research and product development for the entire region," he stated.
Van Biesen was speaking at a meeting at the Gulf Hotel yesterday on the findings of a survey of Bahrain's employers over what effect saving and investment habits of employees had on their businesses.
Research done by Takaud earlier had shown that an alarming 75 per cent of participants were not saving enough to support themselves and their families in later years.
As many as 64 per cent of GCC citizens save less than a fifth of their monthly income and 84 per cent of GCC residents believe that their savings are not adequate for their future.
Building on this research, Takaud completed the survey this month.
"The implications of this non-existent 'savings culture' with an average life expectancy of 85 years is the creation of a savings 'time bomb' for the region which will have major repercussions," he said.
More than 90pc of the sample of companies surveyed understood the importance of being involved in not just the welfare of their employees but their families too, the survey found.
Employers that support their staff and their families will always generate more 'fierce' loyalty than employers who do not.
"Key techniques such as employer savings schemes have shown consistently time and again that they help retain a company's employees for longer, reduce aligned staff turnover costs and in turn boost both business performance levels and wider profitability," he added.
Another key finding was 71 per cent of respondents advanced salaries to employees, or otherwise loaned them money.
"The cost of advancing salaries to staff is a significant expense for a company and it is a non-productive use of their working capital and financial resources.
"Moreover, it suggests that employees in Bahrain have few places to turn to when managing their finances.
"The long-term answer is for employees to build up their own financial buffer - and from there achieve financial independence," he said.
With little existing savings, the only way forward is to prompt staff to get into the habit of saving through employee savings schemes regularly.
The survey also found that 93pc of companies understand that employee savings schemes are important to strengthen employee motivation in the workplace.
"Unmotivated employees are less productive and change jobs more often," he said.
"The cost of replacing an experienced employee for example can be an additional 90 per cent to 150 per cent of their annual salary when one factors in the loss of revenue, aligned advertising and training costs for the recruitment of each new employee," he added.
As many as 73 per cent of companies surveyed agreed that companies should contribute towards staff savings programmes.
"This would also provide employers with the ability to recruit, reward and retain valuable staff, which are needed to grow their business," he noted.
"Currently the average employee in the Mena region changes jobs every 5.2 years, less than half the time in the job compared with France, Germany and the Netherlands, where employees remain in jobs on average 11.7, 11.2 and 10.6 years respectively," stated Van Biesen.-TradeArabia News Service