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Protecting your key assets
Employees becoming seriously ill or injured and having to be off work for an extended period is a complex problem.
- Do you continue to support them past their statutory entitlements? If you do, for how long? What about setting a precedent that may not be appropriate for all staff?
- Should you terminate them at the end of the statutory entitlements period? Does this create an equally difficult problem with the remaining employees?
- If the person who is ill is key to your business, could you afford the risk of them recovering and returning to work for someone else?
All of the above are real problems that happen every day. The conflicts involve financial responsibility, maintaining staff moral and retaining key skills
in the business.
The reality is that Australians assume there will be support from their employer should the worst occur. This is evidenced in the massive divide in the
purchase rate of disability insurance cover between employees and the self-employed.
It is this mismatch between expectations and reality that causes so many problems for employers.
An alternative strategy that many employers are turning to is implementing their own salary continuance program. This is a key solution to minimise business
distraction and financial obligations.
This is an insurance policy that covers all the staff and management against loss of income due to illness or injury.
Because such programs are purchased on a group insurance basis they are extremely cost effective with effective solutions available for less than 1% of
The importance of the right cover hit home recently. A senior staff member (8 years with the business) suffered a debilitating illness and was not be able
to return to work. The Salary Continuance Insurer responded and was able to quickly ensure the staff member received their weekly benefit entitlements
soon after their leave expired. Later, the Insurer was able to process a lump sum payment covering the staff member until retirement age. The CFO was
thrilled to deliver the good news to the staff member. Fortunately, that business had the appropriate level of cover in place to properly assist that
employee. It would have been a very difficult discussion for the CFO had the cover been inadequate, or even worse, not responded at all.
Speak to GSA’s Daniel Orrell for more information.