The board of Sanlam Kenya has approved the commencement of a Voluntary Early Retirement (VER) scheme as part of the ongoing organisational turnaround strategies.
The VER will provide an opportunity for permanent and pensionable staff members to apply as part of the company’s efforts to align its human resource base with prevailing business needs.
According to Sanlam Kenya Group CEO, Dr Patrick Tumbo, the VER offer will be open to employees aged over 50 years. The offer, Tumbo said will close on October 4 with employees who accept the offer set to be released from the company’s employment effective October 31.
The firm said in a statement that its cost trajectory has been growing over the last 4 years from Sh1.4 billion in 2015 to the current Sh2 Billion in 2018 representing an 8 per cent compounded annual growth rate while normalised revenue remained flat over the same period.
Alongside the VER, management actions on business turnaround expected to provide more than Sh200million savings, including cost containment and aggressively growing revenue moving forward in the short and medium-term. Staff costs at Sanlam Kenya stood at Sh943 million in 2018 up from Sh746 million incurred the previous year representing a 26 per cent growth.
A reduction on operating costs through adoption of digital systems among other options, Tumbo said, will have a positive effect on the company’s operations. “The VER scheme is one of the strategies we are deploying as part of our efforts to trim our total operating costs while gearing the company for enhanced operational efficiencies and agility,”
Under the VER terms, the non-bank financial services firm is offering a severance pay equivalent to one (1) month’s salary for every 3 years of service.
The firm will also offer to the successful applicants’ compensation for unused leave days and in addition to this, the insurer is offering a 30 per cent loan rebate on the balance of any outstanding in-house staff loans. The exiting employees will receive pension benefits in accordance with organisational Pension Scheme Trust rules and Retirement Benefits Authority (RBA) regulations.
Sanlam Kenya, recently bounced back to profitability in its half-year trading results, confirming the viability of its turnaround strategy. The Nairobi Securities Exchange (NSE) listed firm posted a Sh639.7 million after-tax profit for the six-month period ending June 2019, a complete turnaround from last year’s Sh1.5 billion after-tax loss.
