This industry forum is supplied by Friends Life
Corporate platforms help employers stand out from the crowd and give employees greater control over how they save, says Martin Palmer
Corporate platforms have been a buzzword in workplace savings for a while now. What is so good about them is they give employees access to a range of financial benefits and investment options – such as pensions, Isas and investment accounts. The very concept of the platform revolves around giving members greater choice and control over their workplace savings.
It is important to underline that the platform gives employers a choice too: what savings vehicles do you include and which members of staff will be offered the platform? It enables employers to differentiate their benefit offerings, both compared to their competitors and internally by providing, for example, high earners or graduate talent with an enhanced reward package. Employers can also tailor reward packages to different generations of employees to optimise their return on benefit spend. This tailoring of reward packages can take account of age and length of service and includes not only Isas but also investment accounts and personal pensions.
In our experience, employers choosing corporate platforms are often looking to build a benefit package that helps to distinguish them in their market. They want to offer more attractive savings and benefits propositions, targeted at each age or demographic group in their workforce. For the baby boomers, it’s an opportunity to take greater control of their benefits in the last years before they retire; for Generation X, it allows the flexibility to save in different ways, to suit family life or other priorities; and for Generation Y it allows some money to be more accessible in the short and medium term, rather than it all being focused on saving for the distant future.
For employers to reap the benefits of a corporate platform in terms of retention and recruitment, the challenge is to communicate successfully the level of flexibility and control on offer. If that can be done, you’ll see a huge boost in take-up of all savings products and engagement on the platform. It is therefore essential that any corporate platform is backed up with a range of tools and education that empower members to take control. That not only means high-tech, high-spec forecasters that allow advanced scenario modelling, but also links to, say, up-to-date tax threshold information so members can make sure they’re using allowances to the best effect. It also means looking at process. There is no point providing detailed analysis of why one saving option offers a return x% higher if the member then has to jump through multiple hoops to move their investment.
Research shows employees like to learn about the financial workplace benefits available to them in a variety of ways, from face to face through literature to online, and it is important to facilitate this. It is also important to use a variety of methods to encourage younger workers to engage with their benefits through: case studies that enable individuals to compare their financial decisions to their peer group; interactive tools – for example, the Friends Life corporate platform offers five interactive tools (workplace savings selector, calculator, risk profiler, investment analysis tools and forecasters); and through proactive alerts – sent by the platform based on employee behaviour to help drive take-up.
The key here is that a corporate platform really puts the employee in control of how they save. Instead of locking everything away until retirement, they can use different products to fit their individual needs. We have seen the corporate platform market pick up over the last couple of months, and we expect that momentum to increase as employers review their workplace savings benefits ahead of auto-enrolment. It is up to us to translate this buzz into a sustainable change in workplace savings that engages members and helps them to a secure future.
Martin Palmer is head of corporate benefits marketing at Friends Life
Read more from the Workplace Savings Quarterly