Understanding the ‘benefit’ of employee benefits…
A few months ago we published some new research into the future of employee benefits. We knew that somewhere in all of that, something would come out of that would sound like a bit like this…
“We need to understand the value of our benefits in order to make the right choices. We need better financial education”
And hey guess what? We weren’t wrong.
That really happened.
The main purpose of our research was to find out what benefits employees want and what they don’t want.
What we also found was there was a whole lot of confusion over the future of pensions (we were under no illusions about that one…), disagreement about whether to invest in a pension or bricks and mortar (or just live each day as it comes and hope for the best!), and that unsurprisingly, the different stages of life that people are at are a huge (the biggest!) indicator of the types of benefits they will see value in and choose.
All that is pretty standard and what we expected but here’s the bit where we move into choppier waters…
Employers clearly are not doing enough to provide financial education in the workplace, which means that people don’t understand the true value of their benefits. If they don’t understand the true value of benefits, then they won’t value the benefit of working for you, other than what you give them as standard ie getting paid every month. So if they don’t see the benefit of working for you, why would they stay loyal to you? Why wouldn’t they go work for someone else who makes the most of all that stuff and can dazzle them with glittering carrots.
That’s the thing. It takes effort to engage the people who work for you and show them the light. It’s such a massive exercise. Engaging, informing (and occasionally entertaining) your staff to keep them from running in the direction of glittering vegetables elsewhere.
There’s always a start point to everything and a point to which you can rewind and take a deep breath and start again. Engagement is the first step (did you read our blog post on that one a couple of weeks ago)? We found that financial education is fundamental.
It’s not easy though is it? And part of the challenge is in the positioning of that phrase itself ‘financial education’. That is (unless you’re a bit like us and like figures), a bit of a turn off for most. If employees were to think of the process of being ‘financially educated’ in terms of ‘Choosing how much they would like to add to their salary each month’, that might help. But it’s not very snappy. It is however what the whole point of employee benefits is. Yes we know it’s to motivate and look after staff but let’s be really, really honest. To employees it’s about being looked after and valued and actually benefitting financially. Sometimes when you strip things apart it’s all so obvious. We get way too caught up in complexity and finding huger, fancier, more ‘now’ words to describe stuff and almost always it is better to say it absolutely like it is and speak person to person. Not ‘load of fluff’ to person.
To employees what they need to know is this:
We think you’re great at what you do. We want to keep you with us. We can offer you XYZ and to help you understand your XYZ, we’ll show you how it can all work to your advantage by giving you the information you need then, you can go fill your boots with XYZ.
To employers (that’s you), here’s what you need to know:
People only see the value in something which is offered to them if it’s explained, put in the context (of their life) and backed up with facts.
Here’s the thing. A lot of people just don’t understand finances or anything to do with money other than what they want to spend it on. Unless you’re in Generation Y, you probably haven’t been taught any of that stuff, and in any case, the world is a different place now.
The financial world is a whole lot different to what it was nine years ago. Amidst the worry of stock market wobbles, the threat of ‘another dip’, the disappointment and acceptance of low savings rates and general uncertainty, we are all actually living longer. The financial crisis did not finish us off. Not completely. What a resilient bunch we are, us humans. Here we are today thinking that while we’ll never get old, (we all think we’re about 20 years younger than we actually are) we’ll actually live forever.
Here’s the other thing, because we’re living longer, that means that we’re going to be old for quite a long time (that’s ok – you’ll still feel young…) and somehow we have to make sure that there’s enough money in the pot so that we can do all the things our 40 year old heads want to do with our 70 year old bodies.
This might be the single most important thing you can tell your employees when talking about benefits because ‘pensions’ is not a sexy word but with the right ‘financial education’ in place before you start showcasing your own carrots, you’ll find that your employees make the right decisions and get the ‘benefit’ out of your benefits.
You might also want to tell them that even glittering carrots wilt!
Have a good day!
The DAM Team