As South Africa braces for its first VAT increase in years – rising from 15% to 16% on 1 May – businesses are urgently recalculating operational costs, adjusting margins, and preparing for customer pushback. But according to Andrew Cook, founder of AI-driven employee engagement platform HeadsUp, the real threat to business profitability may not be on the income statement – it’s sitting at desks across the country.
“Businesses are rightly concerned about the 1% VAT increase,” says Cook. “But many are already bleeding far more than that through disengaged employees. Burnout isn’t just a wellness issue anymore – it’s a financial one.”
Recent data from HeadsUp shows that companies failing to track workforce sentiment in real time often experience silent productivity leaks in the form of unplanned absenteeism, presenteeism, and quiet quitting – all of which remain largely invisible until it’s too late.
Cook explains that organisations using real-time engagement tools have reported an average 13% drop in attrition and 15% reduction in unplanned absenteeism. “If you’re not measuring emotional investment the way you measure revenue or tax exposure, you’re missing your biggest risk – and opportunity,” he adds.
Silent losses with loud consequences
The cost of replacing a single disengaged employee can reach up to eight times their monthly salary, not to mention the toll on remaining teams, customer experience, and innovation pipelines.
“In economic terms, disengagement is a compounding tax,” says Cook. “It quietly erodes output, slows decision-making, and triggers a domino effect of inefficiencies. And unlike VAT, it doesn’t need Parliament’s approval to take effect – it’s already happening inside your company.”
From reactive to resilient
Cook urges South African companies to adopt smarter engagement approaches, especially during volatile times. Instead of relying on static annual surveys, which are often outdated before analysis begins, leading employers are shifting to short, more frequent check-ins – offering real-time visibility into employee wellbeing.
“Leaders need to understand that sentiment is a strategic data point,” says Cook. “And in a high-cost economy, ignoring it is simply not an option.”