How pension provision can secure new talent and help retain staff
The quality and extent of pension provision has always been an important factor for British workers when choosing a new role and organisation.
And I believe it will become an increasingly important tool for employers to attract and retain the best talent over the next few years by improving their employer brand.
Towers Watson’s Global Workforce Study shows that retirement benefits rank quite highly as an influence on people’s decision to join an organisation. Some 18% of those surveyed stated it was a factor and overall it ranks tenth out of twenty-six different factors that influence people when choosing a job.
The research reveals that the quality of retirement benefits offered also affects 17% of people’s decision to leave an organisation. So a company that fails to offer suitable retirement benefits to employees will suffer a loss of talent.
Furthermore as organisations compete more and more to attract talent in future – especially in areas with skills shortages in the UK such as engineering and IT – offering a comprehensive benefits package that includes a good quality pension provision is key.
If you look at the major socio-economic trends affecting the UK, the influence of retirement benefits on recruitment and retention is only likely to become greater.
The UK has an ageing population. 3.5 million baby boomers will reach their mid 50s within the next decade, so concerns about pension provision are likely to grow for workers in their 40s and 50s.
Perhaps what is more surprising however is that the younger generation is showing a much greater awareness and interest in saving for the future than you’d expect. Our latest research shows that the 18-24 age group are those that are most interested in saving. This is despite a common perception that people of this age have traditionally been less concerned about saving for the future rather than living for the moment.
Perhaps the requirement to pay for studies out of their own pocket combined with the austerity experienced over the last few years has created a more savings-conscious, responsible generation.
Whatever the causes, it is clear that many workers of all ages are interested in savings and retirement. It is those forward-thinking employers that can cater for this growing demand from an increasingly competitive workforce that will be one step ahead in the battle to attract and retain top talent.
So how should employers use pensions to attract and retain talent?
Potential solutions to help HR professionals address this challenge can be found in the Government’s latest pension reforms. These reforms are all about providing greater flexibility and choice to workers regarding their pensions. But in giving workers greater freedom to choose, it is critical that they understand what options are available to them.
According to our research, the majority of UK employees have little awareness of what the new pension rules mean to them. What is also worrying is that most admit they don’t talk about pensions enough and yet many would like to learn more.
This is where employers – working closely with pension providers and other experts – can step in. By helping workers to understand the importance of saving for retirement and supporting them to make informed decisions about their options, companies can differentiate themselves as an employer of choice when it comes to pension benefits.
Organisations that provide employees with good quality, well-communicated, flexible pension schemes will attract and retain talent, reduce reputational and financial risk and enhance the public perception of their brand as a good employer.
Companies should also encourage debate, forums and educational sessions to get their workforce talking more openly about pensions.
This will help them retain the best staff in the future – a significant advantage in an increasingly competitive, globalised workforce and economy.