Namibian Employers Federation Namibia
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Vision: To be THE representative of all employers in Namibia

Mission: A catalyst for socio-economic growth and sustainable employment

Slogan: The voice of employers in service of employers

For info on how to implement a Wellness Program or HIV/AIDs Policy and Programme please contact nefosh@nef.com.na

HIV/Aids & Wellness

The question of whether or not employers should be involved in the fight against HIV/AIDS is a crucial one for employers worldwide. Employers everywhere are asking themselves whether HIV/AIDS has a negative impact on business. The answer is YES. HIV/AIDS is a pandemic that has far-reaching effects. Not only is it a public health challenge intertwined with complex social issues, AIDS is also a looming economic disaster. In an increasingly globalized world, multinational enterprises and small and medium-sized enterprises (SMEs) feel the economic impact of HIV/AIDS equally. For employers, HIV/AIDS has a negative impact on both the business environment (macroeconomic impact) and on the enterprise directly (microeconomic impact).

Impact of HIV/Aids on a company

Impact of Aids on business

Macroeconomic impact: HIV/AIDS effect on the business environment

According to significant research focused on the AIDS pandemic in sub-Saharan Africa, the virus generally targets the working-age population. Affecting people in their most productive years of life, it leads to reduced earnings, as well as increased care demands, higher expenditure on health care and premature death. Savings and disposable income decline. In the long term, the consumer market is reduced, leading to a drop in resources available for production and investment. Reduced consumer demand, resources and investment possibilities directly affect economic growth. By the year 2020, the World Bank estimates that the macroeconomic impact of HIV/AIDS may be significant enough to reduce the growth of national income by up to a third in countries with adult prevalence rates of 10% or over. (Namibia's prevalence rate as at 2009 is 13.1, see link for full map).

In developing countries, where skilled physical capital is often low, human capital represents one of the most important economic assets. HIV/AIDS thus has profound effects on the dependency ratio and further implications on the labour force. Many of those infected with HIV/AIDS are experienced and skilled workers in both managerial and non-managerial employment.

The loss of workers to AIDS creates a generation of orphans. These children will put further strain on an economy that lacks a social safety net. This implies that even those who escape the virus will be adversely affected, since extended families, friends and communities will need to fill in for deceased parents. The loss of skilled workers, together with the entry into the labour market of orphaned children who have to support themselves, may lower both the average working age and the skill level. This may lead to widespread use of child labour, with its inevitable consequences.

Business relies on the education sector for its future workers, managers and business leaders. The education sector is severely affected by HIV/AIDS. It suffers from a loss of experienced teachers due to AIDS-related death and illness. For example, research carried out in Zambia showed that teachers were dying at a faster rate than new ones could be trained. In addition, there are fewer children attending school. This is due to many factors, such as lower household income. But children also spend more time caring for sick family members, rearing younger siblings, or even struggling with HIV infection themselves.

Declining productivity

Declining levels of productivity lead to declining profits when production costs are not declining at an equal or higher rate, as in the presence of HIV/AIDS. Additionally, with declining and fluctuating productivity, the ability to meet supply demands from consumers and buyers (reliability) decreases. This has impacts on the present and future reputation of the company and thus on future profitability. The principal areas in which HIV/AIDS impacts on productivity are increased absenteeism and increased organisational disruption.

Increased absenteeism

Increasing absenteeism is one of the primary drivers of rising visible costs and declining productivity in businesses as a consequence of HIV/AIDS. This is affected through the disruption of the production cycle, the under-utilisation of equipment and the use of temporary staff.

Employees becoming ill due to HIV and its associated opportunistic infections
Increased demands of caring for family who are ill
Need to attend funerals

Increased organisational disruption

The high rates of morbidity and mortality from HIV/AIDS generate increasing disorganisation within the workforce as a result of rising staff turnover, loss of skills, loss of tacit knowledge (gained from experience of both the work and company environment) and declining morale. Transmission of skills and knowledge becomes more difficult with high levels of staff turnover, and morale can be severely affected by the loss of colleagues, discrimination against people living with HIV/AIDS and the disruption of work activities. These less visible organisational factors are built up over longer time frames and are critical for a more efficient, effective and ultimately productive workforce

Increased costs

Rising production costs for business not only have the effect of directly impacting on current profit margins but also on future profits by reducing the investment capacity for increasing productivity, expansion, research and development, and workforce training and support.

Recruitment and training

Demand for recruitment and training rises as a result of increased staff turnover and loss of skills. This may include employing extra labour to cope with staff fluctuations and losses, widening the skills base through multi-skilling In addition, within a situation of scarcity of skilled labour this not only increases training costs but also may result in demands for higher wages.

Insurance cover and pensions:

Company life insurance premiums and pension fund commitments will rise as a result of early retirement or death.

Health management:

Where health care is provided these costs can increase significantly with rising HIV/AIDS rates. These increasing costs may ultimately affect the level of benefits that a business is able to provide for its workforce. However, the provision of health care is not just a cost but is also an investment, preventing or limiting sickness/absenteeism and controlling workforce health risks. This is particularly relevant in countries where public health care provision is limited and private health care expensive.

Funeral costs:

Considerable costs can be added where businesses provide for the funeral costs of employees. This practice is particularly prevalent in many parts of sub-Saharan Africa. These increased funeral costs are primarily a result of the high mortality rate of HIV/AIDS, particularly in developing countries.













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Southern Industrial Area
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E-mail: enquiries@nef.com.na
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