The unprecedented times we’re currently going through means that many employees will be facing some sort of organisational change; whether they’re being furloughed or in some cases facing redundancy. It’s a tough and frightening time for employees to be faced with these prospects, and no doubt, you as an employer will be feeling the strain just as much when it comes to making hard hitting decisions and handling employee concerns.
As such, it’s unlikely that retirement planning is the first thing on employees’ minds. Employees faced with redundancy and job uncertainty will be more worried about their immediate circumstances and keeping their heads above water.
Our research, carried out before the Covid-19 pandemic found that over 40% of employees aged 55 and over, indicated that saving for retirement was their biggest financial concern. However, for millennials, less than 10% were concerned about retirement[1]. If we asked about financial concerns in the here and now, that 40% would probably be considerably less.
What does this mean for employers?
Retirement savings are important for everyone regardless of age. And we all know the younger you start saving, the easier it is to build up a decent retirement pot.
But they need to be part of a bigger workplace savings solution. Not only because they don’t address the main financial concerns of younger employees; over 25% of millennials cited buying their first home as their biggest financial concern, followed closely by how to save consistently (25%) and managing debt (17%)[2]. But also, because when unprecedented events such as COVID-19 cause ongoing uncertainty, employees no matter their age, need to feel reassurance and security when it comes to the workplace. Helping your employees build financial resilience is vital.
Financial resilience
When there’s any kind of organisational change or uncertainty, employees are naturally going to worry, especially if there is a risk of redundancy. How will they pay their bills and support their families? What about their retirement plans? Perhaps buying their first home now needs to go on hold?
But for those with accessible savings, the future probably looks a little less bleak. It at least provides stability and the reassurance that they can cover the basic cost of living. As an employer, you’re in a position to help employees save. You provide their income and other benefits that help them to save money – including retirement savings – so why not offer a way to grow their savings, encourage regular saving and help build their financial resilience? So that when the unprecedented occurs, you have a workforce who are in control of their finances and are therefore just as productive when faced with uncertainty and are better equipped to deal with risk of redundancy.
The perfect time to save?
No one can say how events will play out, but while non-essential shops and facilities are closed and many of us stay at home, employees may find they’re actually able to save during this time. Giving them an easy way to save, especially if it’s direct from pay, can really help your employees take control of their financial futures.
[1] Realigning the workplace savings offering to meet the needs of millennials – May 2018
[2] Realigning the workplace savings offering to meet the needs of millennials – May 2018