For employers, a relevant and well communicated benefits package not only helps recruit the most talented individuals but also aids in the retention of a happy and committed workforce.
One of the key elements of a good benefits package is to provide a range of saving vehicles to cater for employees with various financial goals, whether they are putting something aside for a new car, their first home or retirement.
However, before any saving initiatives are implemented, it is imperative that employers understand the needs of their employees. Each member of staff will have individual circumstances which are likely to result in different savings priorities; therefore, a ‘one size fits all’ approach does not work.
The key to this is undertaking research to understand employees’ saving priorities and how best to aid in reaching them.
The first step involves assessing the various cohorts that comprise the employee population; for example, younger groups may want to save for a deposit for a first home, whereas for an older group that may not be a priority, but a pension will be high on the list. It helps to segment the workforce and look into what these different groups may want and need.
Next, research should be carried out which aims to understand trends in the data relating to the current employee population; namely, why employees are, or are not, taking advantage of certain benefits and whether any gaps are due to a lack of appetite or an issue with understanding.
Finally, it helps to carry out an examination of the broader landscape. This means looking at what competing organisations are offering that others might not be, asking why these differences exist, and deciding if these benefits would be good for the employee base in question.
From here, employers can start considering what savings vehicles suit the various needs of their own workforce.
It helps to take a short, medium and long term view.
For short term goals, such as saving for a car or wedding, cash individual savings accounts (Isas) or share schemes like Save As You Earn can be useful. In the medium term, for goals such as buying a first home, the Lifetime ISA (Lisa) can help, as it provides a guaranteed 25% uplift as part of the government bonus. Equity ISAs and share incentive plans night also appeal to those with medium term needs. When taking the long term view on things like retirement, pensions offer the most tax-advantageous way of saving.
On the back of this understanding, it is possible to start building out a benefits provision which appeals to a broad range of employees at different life stages and with different saving priorities.
But it does not end there. To truly engage employees and get them making the most of any saving vehicles available, they first need to understand the benefits on offer, including the advantages and disadvantages of each.
The best way to switch employees onto this is via financial education, taking care to understand that online support tools on their own may not have the desired level of impact. The most effective method is face-to-face, through seminars or one-to-one sessions, but online support tools are important once employees are engaged.
Proactive and interactive financial education can not only help develop understanding and encourage engagement, but is also a catalyst for behavioural change and action, resulting in added value for both employers and employees.