What happens when there’s a death in a small business?

In a small business, your employees are like family. And just like losing a family member is extremely traumatic for the person involved, so too a death in a small business impacts the company and its people directly. Depending on how close-knit your SME team is, the impact can be felt across the business, whether the person who passed away was a staff member, or even the loved one of an employee.

But why does a death and the resulting funeral, typically affect a small business so dramatically? Here are a few things that typically occur when a member of your SME 'family' dies, which can have a knock-on effect on overall finances, productivity and morale:

1. The people involved, or affected, may need time off work

Whether it’s an employee who passes away or one of their close family members, it's likely that a number of your staff will need time off work and not be available to do their jobs. If they’re arranging a funeral, this can take up a lot of their time, so you’ll need to organise a replacement resource to do their tasks. This is not only expensive, but also time consuming, and can affect business productivity as the new person will probably work slower and need guidance to complete the tasks.

2. The affected employees may need to borrow money

Funerals are very expensive. Between arranging transport, booking a venue, paying for a headstone and a casket, and catering for guests, organising a funeral can end up costing the loved ones of the deceased tens of thousands of Rands. To add to this financial pressure, most funeral directors require full payment upfront. Very few people have this amount of money saved up, or put aside, so if an employee of yours doesn't have funeral cover, they will likely turn to you for financial assistance. This can affect your cash flow, and impact on other vital business functions like paying people’s salaries or your business overheads. Fortunately, there's a simple and inexpensive way to avoid this situation completely - which is to offer your employees funeral cover that pays out a lump sum they can use to cover any funeral costs they incur due to the death of a loved one.

3. The affected employees or loved ones could lose income

If your employee passes away and they’re the primary breadwinner, their remaining family members can be left in a severely stressed financial position. The same is true if your employee loses a partner who brings in an income. They will suddenly be left with much less income to cover all of their expenses. This is where life insurance is so valuable, as it can pay out a benefit to the remaining family members, providing them with a financial buffer to make up for the regular income that’s been lost. Offering life cover to your employees is also beneficial to your business as it ensures that you aren't faced with financial shocks when employees or their surviving loved ones approach you for financial help.

4. Survivors will need emotional support

After a death, it’s going to be tough for your employee, or the colleagues of a deceased employee, to resume their normal work functions and deliver on their required outputs. Everyone responds differently to grief, and while some may throw themselves into work tasks as a distraction, others may find it difficult to focus on work responsibilities. It’s important to keep the channels of communication open with affected employees and do whatever you can to help them deal with their grief. This might include being understanding about their needs and challenges, or even provide them with access to a grief counsellor or therapist if possible. It can also be helpful to speak to their colleagues and ask them to be supportive and keep an eye on the grieving individual(s) for any signs of depression or anxiety.

Your employees really are your most important and valuable business assets.  As such, they deserve your support and assistance, especially during difficult times like the death of a loved one or colleague.

A great way to show you care, and ensure that a death in your business doesn't have severe financial repercussions for you or your employees, is by offering your staff death, disability and funeral cover. Old Mutual SME StaffCover underwritten by Old Mutual Alternative Risk Transfer Limited makes it easy and affordable - in fact it only takes about 10 minutes to cover your employees. Visit www.oldmutualstaffcover.co.za to get a quote, or leave your details and we'll contact you.

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