WEALTH at work recently carried out a poll and found that 90% of employers thought that employees save more when workplace savings options (such as workplace ISAs, SAYE/SIP schemes and pensions) are offered.
In light of this, Jonathan Watts-Lay, director, WEALTH at work, discusses why looking after an employee’s financial wellbeing can be in a company’s best interest and what employers can do to engage the workforce with their savings options.
For employers, a relevant and well communicated benefits package not only helps recruit the most talented individuals but it can also help retain a happy and committed workforce.
After all, debt and money worries can be linked with lower productivity and staff absences. This is why many employers are now recognising that there is a commercial cost to people having financial worries and why a good financial wellbeing strategy is in a company’s best interest.
A significant part of the modern benefits package includes savings incentives to help improve an employee’s financial wellbeing. But is the workplace financial benefits package fit for the 21st century?
First, it is imperative that employers understand the needs of their employees before implementing any savings vehicle. After all, they will each have individual circumstances that are likely to result in different savings priorities. Hence why a ‘one-size-fits-all’ approach doesn’t work.
People tend to think about their personal finances with a short-, medium- and long-term view, for example, saving for a holiday (short term), saving for a first home (usually medium term) and saving for retirement (long term).
Employers must therefore think about what these timescales mean to their employees, and deliver savings vehicles that appeal to a broad range of individuals, at different life stages and with different saving priorities.
For example, savings vehicles such as cash ISAs or share schemes such as Save as You Earn, could appeal to those looking to meet short-term needs; equity ISAs and share incentive plans could appeal to those who fall into the medium category; and pensions are traditionally suited to those who are saving for the long term.
The best way to then switch employees on to how they can save through the various options available in the workplace is via financial education. It is our experience that online support tools on their own, do not have the same level of impact. We have educated over 100,000 employees and find the most effective way is face-to-face through seminars or one-to-one sessions, albeit online support tools are important once employees are engaged in the subject.