Financial Benefits for Employees

Monetary compensation has been hit hard for employees across the Globe over the last couple of years and most employees are not expecting things to return to normal for some time. Employers on the other hand, especially in Australia, realise that good years are coming and that the “war for talent” will be back before we can blink.

Benefits will no doubt play a major part in securing great talent, however most organisations offer standard perks. An area that is severely lacking is the provision of Financial Services – not just an alliance with a bank or a broker, but a benefit that helps employees build a sound financial base.

Why is this important for Employers? The Global Financial Crisis (‘GFC’) has highlighted numerous examples of employee hardship. Interestingly the hardships would not have been as prominent had basic financial skills been apparent. Studies have found that 25% of employees left statements from Superannuation Funds unopened. Of those that read the statements, 75% spent less than 3 minutes reviewing the statements.

This “head in the sand” approach to managing financial affairs is indicative of a severe lack of financial education. Few schools offer courses on managing finances and most of us learn finances from parents – some of this advice is good, some is not. However, as per the experiences of the GFC, what is clear is the levels of stress endured by families when economies turn down is extreme.

Australia has weathered the GFC very well, however the actions employers can take to help their employees through these periods is enormous and need not cost the organisation. A financially educated employee is a stable employee - they will have a safety net and this directly translates to less stress for the family and the employee.

An employer who has the foresight to equip their staff with such skills will engender loyalty as well. When the tough times come (and they will), a reduction in monetary compensation will be manageable (if not desired). This keeps the employee focused on their work and not the unmanageable bills caused through a lack of financial education.

The financial downturn has no doubt increased employees awareness of managing their household finances, including budgeting, insurance (including unemployment insurance), rainy day savings and generally tightening the belt. Unfortunately for some this has come too late, however employers are now seeing Financial Services education as a way to provide great benefits to their employees without increasing their monetary compensation.

For example, a well-designed benefits program can be a strategic investment in meeting employee needs (security, fulfilment, relevance) while achieving key business goals (employee attraction, retention, productivity).

Two key areas should form the basis of your Benefits Program::

1. Foster financial security

Employers should consider creating a workplace culture that actively promotes and supports a shift in employees' mindset from passive recipients of financial benefits to taking personal responsibility and control of their financial futures.

Through their resources, employers can provide employees with access to financial guidance, educational tools and resources, and may sponsor a range of products and services to help employees build income protection and retirement security. In return, employers may see increased employee satisfaction and loyalty.

2. Craft an unparalleled employee experience

Simply offering benefits does not mean that employees will be aware of them and take advantage of them, which might decrease the potential ROI. As part of the benefit offering, it is also important to create employee awareness and provide education to help with their decision-making and benefits utilisation. This user experience is important in other consumer environments and is equally as important for employees as the end users of benefits programs.

How employees receive their benefits information (push communications) is just as important as having information in likely places that they will reach out to find the information themselves (pull communications). If it is easy for employees to educate themselves on benefits choices appropriate for their personal situations and easy to enrol, participation rates are likely to increase. Employees who are participating are more likely to recognise the value of working for an employer who provides them with an array of benefits options. Employers who make an effort to enhance the employee experience are more likely to achieve a higher return.