Taking chances on new technology is not a priority for human resource executives. They strive to achieve various objectives around recruitment, retention, and productivity, but not on adopting innovation. However, achieving these objectives may be dramatically accelerated by the intelligent use of technology. Today's blog focuses on the best practices related to pension planning for employees, and how a cooperation between the corporate human resources and financial functions leads to your employees’ confidence in tomorrow.
Retirement/pension planning is an essential element of achieving high levels of employee satisfaction. Your workforce devotes their energy, creativity, and expertise to working for your business, and a responsible employer should provide them with practical guidance about their financial situation after they retire. The accounting department arranges this crucial element of the employment experience, but it is often out of the scope of their expertise to communicate all the benefits and options of the employees’ retirement/pension planning. Here is where we suggest you take over. Helping your employees achieve peace of mind about their golden years will help them cope with the economic uncertainty and help you build a brand attracting the best talent on the market.
Promoting your company as a desirable workplace is made possible by differentiating your offering to employees. The accounting department would define the total compensation as salary, bonus, commissions, stock awards, the imputed value of health insurance, other benefits and the company's contribution to the pension planning scheme. However, promoting pension planning guidance as a unique benefit to staff is an option few companies have pursued. Instead of promoting the "Pension Provider or Bank X Scheme", you could encourage the employees to be proactive about their retirement choices as part of an overall strategy of encouraging their financial well-being.
Rather than directing an employee to an external website displaying the static pension balance, your organization could offer an interactive tool helping them visualize and take control of their pension planning. In collaboration with the accounting department, you can update your accounting system with OutRank® to inform employees whether they could request the employer to invest more of their tax-deductible income into their pensions and how such a decision would impact their financial position in the future.
With OutRank®, your accounting system can offer different forecasts of pension savings based on various assumptions, making it simple and intuitive for employees to understand the power of pension planning. You will see the positive impact of a user-friendly customer interface on employee loyalty and retention. Thereby, you can use pension planning as part of your employer branding strategy.
Educating employees about pension savings can be undertaken with communications targeted at different cohorts. For new joiners, you can present the information about enrollment into the pension planning scheme with an interactive demo of how choosing their monthly contribution could impact their lives in the distant future. For people in prime earning years 30-50, the topic of pension planning may be lower on the priority list than buying a home, paying school fees or planning holidays. However, with personalized data simulations, you can engage employees with relevant information about the value of their pension within the context of their overall financial planning process. For older employees closer to retirement, you can present pension planning information in the context of a comprehensive "financial check-up". For example, a digital quiz integrated into the intranet could help employees understand whether their risk appetite corresponds to the financial product they use for their pension planning. They could then be encouraged to speak to a financial advisor who could help address any discrepancies regarding risk, reward and longevity to create a diversified portfolio.
The workplace experience lasts way beyond retirement, providing your employees with a sizeable part of their income after they exit the workforce. Although the accounting departments usually make the arrangements regarding the employees’ retirement, raising awareness about pension planning is rarely considered a means of improving employee satisfaction levels. Still, high-quality pension counselling could be a turning point for your employees planning their lifestyle at retirement and for being able to take timely action to adjust the pension scheme for themselves.
Do not hesitate to contact us to learn more!