Mercer | The secret to happy employee

Is this the secret to happy and engaged employee? Mercer 2018

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Is this the secret to happy and engaged employee?
Calendar16 January 2018

By Renee McGowan 

This article appeared originally on 10 January on weforum.org as part of the World Economic Forum Annual Meeting.

We all spend a lot of time worrying about personal finances. It is distracting and stressful. Much of this time spent worrying is while we are at work; as many as 13 hours per month for the average employee, according to Mercer’s Inside Employees’ Minds research.

An increasing responsibility on the individual to manage their short and long-term savings (including for retirement) by themselves is adding to their burden. Such a heavy load makes employees less confident to take financial action.

Meanwhile, business leaders say that attracting, managing and retaining a skilled workforce is their number one business challenge in the next five years.

Mercer’s latest research has investigated employer and employee beliefs, perceptions and behaviours around financial security across wealth, health and careers. It surveyed 7,000 individuals and 600 senior decision-makers from both the private sector and government in 11 developed and developing countries.

Better benefits, more accessible savings plans and guidance and technology tailored to individual needs would have a very positive impact on a workforce, the research showed. Improved benefits or access to savings plans would make 86% of employees more satisfied and more committed to their jobs. This means a significant boost in employee engagement. 

If Your Employer Was to Provide Access to or to Improve the Overall Benefits of the Pension Plan Available to you, What Impact Would That Have?

 

Employees place an extremely high degree of trust in their employers’ advice, the research revealed, with nearly 80% reporting they trust their employer for sound financial advice. They are also seeking information and secure, easy-to-use technology to help them manage their personal finances. Older populations have just as great a desire for online tools, with 90% of adults under the age of 35 and 85% of all adults reporting they want digital help.

We believe this provides a unique opportunity for employers around the world to deliver on this trust and help individuals reach their long-term and short-term savings goals. In return, employers are not only making their employees more engaged and productive, but also helping future generations. 

Customized communication and solutions are also critical, particularly since our financial needs vary significantly across age, gender or the stage in our career. For instance, millennials, who comprise the largest segment of the global workforce, switch jobs more often than any other age group. Employers should explore solutions to address millennials’ specific needs, such as portable savings plans, financial coaching, student loan repayment plans and budgeting tools. Their millennial employees will be more engaged and more likely to stay in their organization.

At the other end of the spectrum, older workers also have unique needs, primarily around increased longevity and working later in life. Men’s average retirement age across OECD member states has continued to increase over the last 15 years, for example. It is now at 65.8, compared to 64.3 two years ago.

The ageing workforce will disrupt the status quo of what it has traditionally meant to retire in the mid-60s. Employers are already facing this challenge. It will require more flexible and innovative work solutions, including offering part-time work options for those nearing retirement; lifetime education programmes; health initiatives so that employees are able to work as long as they need; and guidance on their options for when to take social security benefits.  

Women also face a gender gap in wages and career continuity, as they earn less on average and have longer periods out of the workforce. As a result, their retirement balances are typically 30-40% lower than those of men. Compounding the problem, women live longer than men on average and so require their savings to last longer. To ensure their female workforce is empowered, engaged and financially secure, organizations must examine the communications and investment solutions they offer to women.

Stress, access to the right tools and solutions, affordability and confidence all affect an individual’s ability to save and invest. A person’s age, gender, and career stage makes a difference too. Employers who prioritize their employees’ financial security needs and goals will make themselves the trusted adviser that every employee is looking for.

People want and need smart saving tools and guidance on how to use them. They also trust their employers. This means organizations have a unique opportunity to transform their employees’ financial security, making their workforce more engaged in doing so. Moreover, when organizations show how important they consider their people’s long-term well-being, they will find it easier to achieve their biggest challenge - attracting and retaining top talent.