This archive report was first published on 26 September 2019.
Sanlam Kenya, a non-bank financial services firm listed on the Nairobi Securities Exchange (NSE), has announced the commencement of a Voluntary Early Retirement (VER) scheme as part of its organisational turnaround strategies.
According to Sanlam Kenya Group CEO, Dr Patrick Tumbo, the VER offer will be open to employees aged over 50 years and will close on October 4, with employees who accept the offer set to be released from the company's employment effective October 31.
Sanlam Kenya's 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. Normalised revenue, however, remained flat over the same period.
Alongside the VER, management actions on business turnaround are expected to provide more than Sh200million savings, including cost containment and aggressively growing revenue 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 will have a positive effect on the company's operations, according to Tumbo.
Under the VER terms, Sanlam Kenya is offering a severance pay equivalent to one (1) month's salary for every 3 years of service, as well as compensation for unused leave days and 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 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.
Published on September 26, 2019, at 2:51 PM.
