Everyone gains when staff are engaged with their benefits, says Ann Flynn, head of marketing communications, corporate pensions at Scottish Widows
The recession is still at the forefront of all our minds. With low pay rises and little or no bonus for many, workers are feeling the pinch. Employers are under pressure to attract and retain the best staff to drive their business forward, but can no longer afford to do so by offering high salaries or increasing their benefit spend.
But despite the lack of significant pay rises, people do still want to save. Scottish Widows UK pensions report 2009 showed a rise in the savings index to 54%, up 3% on the previous year and indicative of the trend of the past three years. Overall, workers are feeling worse off than they did five years ago and for some, saving for the short term has become the priority. One-fifth of the population is not saving at all, however.
Despite short-term saving being a focus for some, workers do want help in making the right decisions about their longterm financial management. Scottish Widows workplace research 2008 showed that access to financial education, guidance and advice is their number one need.
The population’s trust in financial services has been shaken by the recession, with doubts cast on the security of their savings and the industry’s integrity damaged by the banker’s bonus scandals. Employers are well placed to help staff fulfil these needs because they are still trusted by their workforce. The Scottish Widows UK pensions report 2009 showed that workers trust their employers and many enjoy access to employer sponsored savings, seeing these as a major incentive to save.
A quality company pension scheme is a key factor for just under half of workers moving jobs and 54% of staff say their workplace pension scheme is an incentive to stay with their current employer. We know employers are concerned about employees not appreciating or making use of the benefits they are offered despite being stressed by money worries.
Value of good pensions
So if workers are attracted by, and value, the provision of good pensions, why do employers still have the problem of their staff not fully making use of, or valuing, the benefits they are offered?
The answer is effective worker engagement. If an employer can put in place a compelling programme to engage workers with the benefits they offer, then both parties stand to benefit. But what is the key to success? Employers have publicised their benefits offer for some time, but can still experience low takeup.
The key is perhaps empowering workers to take control of their own finances. That means giving them access to the financial guidance, information and tools they need to make the right decisions about their long-term financial management and doing so in a way that makes it convenient for them to access. For most (87%), online access is the perferred route; workers want to be able to see and manage their savings online. Some employers we spoke to for the Scottish Widows workplace communication research October 2009 have advocated allowing staff time at work to manage their finances.
Providing needs-based information can make it easier for staff to identify how best to use the benefits that are available to them.
Once employees feel they are making better-informed decisions about how to use their benefit package, the value of those benefits becomes more obvious.
Employers also benefit because that value their workforce places on their reward package will increase without needing to increase the benefits spend. So, if executed correctly, a worker engagement programme could produce a win-win situation for both workers and employers.