Provided by Mercer: 11/12/08
Nearly three-quarters of Australians have experienced financial difficulty. Is it the problem of their employer, should employers help and what’s in it for them if they do?
They’re questions raised in Mercer’s 2008 Benefits Outside the Square study, based on a survey of 600 employees and 150 employers.
One of the key findings of the report is the disconnect between the benefits employees want and those employers think they want. Employers, for instance, put parental leave as the top ranking benefit but employees put it well down their own list at equal 14th (on a par with a social club program).
For most employees aged 50 and over, the issue of parental leave is likely to fall well behind priorities such as preparedness for retirement.
Benefits Outside the Square found that over 40% of these employees are unsure how much they will need in retirement, and that many want their employers to help them prepare for and transition to retirement. Employers say they see the value of doing so – when researchers asked how they could best help older employees, the top ranking responses focused on provision of planning for retirement programs and financial advice, and flexible working arrangements. Yet most aren’t doing anything about it - less than one in three (28%) employers currently offered or facilitated access to financial advice as an employee benefit.
One company that has done something is Ericsson Australia.
Recently Ericsson ran a targeted education program for employees aged over 50. Designed to educate employees about transition to retirement superannuation changes, the program garnered great interest and was attended by approximately 70% of Ericsson’s employees over 50. Many of the attendees were inspired to seek out financial advice afterwards and take greater control of their financial futures.
“We see the provision of financial education and, where appropriate, financial planning as one process that is vital for our employees to have the knowledge to make life choices.”
Colin Pritchard, Manager – Performance and Reward
Ericsson Australia Human Resources
In considering whether employers have a broad responsibility to help employees secure their long-term financial security and well being, there are a couple of things to consider:
- Personal problems can have a serious knock-on effect into the workplace.
- Providing access to financial advice – through financial education programs or advisers - may be a way to help employees.
- It’s not just for older employees and, in fact, the younger, the better. A study by RiceWarner1 found that, when comparing the return on cost of advice, young families were among the top two groups surveyed to gain the greatest financial return.
Speak to your employees and find out if they could benefit from the inclusion of financial education or advice as an employee benefit. In the words of Paul Clitheroe, Chairman of the Financial Literacy Foundation:
“Your people are the most important asset a company has and when people feel more financially secure they will be less stressed and more productive in the workplace.”
More information
Download 2008 Benefits Outside the Square studyFind out more about Mercer's education seminar programs
1 Value of Advice, Prepared for the Financial Planning Association by Michael Rice, February 2008
This information has been prepared by Mercer (Australia) Pty Ltd ABN 32 005 315 917 for general information only. The information does not take into account your personal objectives, financial situation or needs. Therefore, you should not act on this information if you have not considered the appropriateness of this information to your personal objectives, financial situation and needs. You should consult a licensed or appropriately authorised financial adviser before making any investment decision.
