Guy Chennells |
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Head of Product, Discovery Employee Benefits |
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guyc@discovery.co.za |
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www.discovery.co.za |
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@Discovery_SA |
As the world shifts into a post-pandemic reality, companies are having to contend with immense changes that are redefining relationships with employees.
Both the great resignation* and the future of work** continue to revolutionise how work is done while, concurrently, retirement systems across the globe are under immense strain as societies age and life expectancy levels continue to increase.
“As competition to attract and retain top talent intensifies, many employers have renewed focus on providing superior employee packages to attract and retain best-in-class talent,” says Guy Chennells, head of product at Discovery Employee Benefits.
He unpacks a few key trends and ideas that HR practitioners may want to consider when it comes to enhancing employee benefits.
A Flexible Future
One of the defining characteristics of the changes underway in the new world of work is a profound shift to flexibility.
In a post-Covid world, technologically super-powered employees want greater freedom of choice where it comes where, when, and how they perform their duties.
“A positive outcome of this renewed need for individual autonomy seems to be that employees are better able to find harmony between work and life,” says Chennells. “Should they succeed, both staff and employers stand to benefit from gains in areas such as mental and physical wellbeing, as well as improvements in creativity, productivity, job satisfaction and engagement.”
Chennells adds that from an employer perspective, enhancing flexibility does not only have to do with accommodating novel working arrangements.
“There is growing pressure on companies to allow for lower minimum levels of retirement savings,” he says. “This will be a disaster for employees if they opt down and never increase it again. Finding a way to give that flexibility responsibly is crucial.”
Age is but a number?
Alongside the transitions taking place in the world of work, the global longevity revolution is seeing populations across the world enjoy dramatically longer average lifespans than ever before.
Although a wonderful problem to solve, when combined with economic realities such as slower equity market growth and inflation, population ageing is placing immense pressure on retirement systems across the world.
Globally, researchers and governments are converging on the realisation that the most direct approach to solving for the emerging retirement crisis is simply to increase the standard age of retirement.
“In South Africa, a legislated reform of the retirement age does not yet appear to be on the cards with current debate centred much more on the preservation of savings,” says Chennells. “Still, a growing number of employers are beginning to recognise that people are not only living longer but are living healthier lives as well.”
He advises that in addition to, once again, highlighting the growing importance of the relationship between physical and financial wellbeing, improving societal health spans allows for yet more opportunity for flexibility as companies may consider updating their retirement guidelines.
“Increasingly, employers are saying to their staff: ‘If you are still able to work, to be productive and if your health is good, you no longer need to retire at 65’,” he says.
And Chennells adds that the clear benefit for employers, here, is holding onto experienced talent.
“From an employee’s perspective, work may fulfil a sense of purpose while proving a powerful tool to alleviate retirement savings pressures,” continues Chennells. “You will be surprised as to how many people do elect to carry on working. And in many cases, this is not only a financial decision, but an emotional one too.”
Thinking Out of the Box
Chennells explains that the broad shift to flexibility has been widely welcomed by employees and offers promise to employers despite the increased strain placed on administration systems and processes.
It does, however, introduce concerns that many may fall victim to of some of humanity’s well documented cognitive biases – opting for instant gratification over future gain, for instance.
This may lead to the temptation among staff to opt for whichever is the cheapest option when it comes to group risk and retirement.
“A lot of people reach halfway through retirement and realise ‘oh my gosh I haven’t saved enough’,” cautions Chennells “As such, there’s a huge drive in South Africa, and globally, to encourage employees to save more for retirement.”
To achieve this, one option may be for employers to consider establishing retirement and career counselling functionalities to help their staff emotionally and financially prepare for retirement. Another is to harness the incredible power of personalised technology. It’s possible to show someone visually what sort of income they are on track for in retirement and to have this respond dynamically to changes to their savings level. Even more than that, it is possible to give them a personal increase plan that will slowly but surely edge their savings rate up to the right level. That deals creatively with the tension between flexibility and responsibility. Employers can then enable the savings rate flexibility knowing that it has built-in ability to guide employees to responsible outcomes.
Chennells explains that, as always, incentives are another proven means to help keep employees on track and combat some of those biases. He says that the shared-value model offered to employers, for instance, provides ‘boosts’ to employees’ savings when they adopt improved physical and financial behaviours. The boosts only vest at retirement, helping employees keep their eyes on the prize.
“These days employees expect their employers to consider them holistically and flexibly. Employers with the drive to compete for the best talent have much that they can access to improve staff retention and attraction and to inspire employees to stay healthy, stay protected, and stay on track to reach their retirement goals,” concludes Chennells. “It’s an exciting time to be alive and building great organisations that are great places to work.”
*The Great Resignation – The World Economic Forum describes The Great Resignation is an idea proposed by Professor Anthony Klotz of Texas A&M University that predicts a large number of people leaving their jobs after the COVID pandemic ends and life returns to “normal.” Managers are now navigating the ripple effects from the pandemic, as employees re-evaluate their careers and leave their jobs in record numbers.
**Future of Work – According to SHRM the future of work is a projection of how work, workers and the workplace will evolve in the years ahead. It’s a topic that keeps many CEOs up at night as they make decisions that enable their organisations to thrive today while they prepare for the future.
