Employment Benefits & an ageing workforce

But besides the shift in the underlying demographics there have been other changes that are affecting that profile, not least the economy. With zero to minimal growth and the value of pensions schemes having been slashed over the years, people are far less inclined or able to leave work and enjoy life’s ‘longest holiday’ as it’s sometimes termed. Added to this we have seen the removal of the Default Retirement Age (DRA), giving employees the right to work beyond the current state retirement age.

So as business leaders what do you do with an ageing workforce? Should you still consider them when thinking about your employee benefits? After all one of the big draws for many benefits is the ability to attract and retain your most talented people. Is that still relevant to older members of your workforce?

As an employee benefit consultancy, we believe the answer is unreservedly yes and there are number of reasons why we believe this.

Most older employees are likely to be more experienced than their younger peers. They have greater professional- as well as, life experience, with a greater depth of understanding about your business and more often than not, are in more senior roles.
These people are important to you and your business so it’s important that you keep them engaged, committed and motivated to supporting your business for as long as they or you intend them to be there.

There is sufficient evidence that engaged workers are more supportive of their company and its activities, helping to drive up productivity, increase top- and bottom line and also manage costs effectively; and employee engagement is a growing topic in boardrooms across the UK and it’s at least as important to older workers as younger employees, so is something that shouldn’t be dismissed.

Fitness, across the board
Health and wellbeing is vital for progressive companies that not only want to improve their employee engagement but improve the health of their people. With the right support, companies of almost any size can develop and implement wellbeing programmes that will make strides to achieve that goal, and age is no longer the barrier it once was.

Whilst it’s accepted that as we age we are more likely to need some form of medical support, and for benefits such as private healthcare, more claims can increase premiums making the cost prohibitive for some, insurers and other providers are expanding their remit to provide specific information and advice for conditions and issues that are relevant to older workers.

Flexing the range
More employers are beginning to think logically and laterally when it comes to their benefits and the profile of their workforce.
Now, it’s important to note that employers still have the right to pick and chose what benefits they offer and some of these choices still retain an age ‘trigger’, such as group life insurance or income protection, but in the main all benefits can remain in place if the employer wishes to do so. The key is how relevant these benefits are for the employee profile.

Younger employees are generally more focused on salary. Cash is definitely king. But older workers are more likely to have children that have left home, they have smaller or no mortgage and increased disposable income. That income can be invested in a number of more relevant and richer benefits than just retaining existing levels of salary. Healthcare, risk and wellbeing products and services are important for this group of employees and they are willing to exchange salary to access them.

Access to such benefits can be accommodated through the implementation of flexible benefits programmes, where employees can pick and choose the benefits they want to match their life stage or situation. These benefits don’t necessarily have to be fully or partially funded by the employer, they can be funded entirely by the employee. Some companies make conscious decisions to remove employer funding from some benefits and redirect them into others. For example moving from group Life to a Pension top-up. The impact on the company remains neutral but the impact on the employee is a positive one and not just in the financial sense. The change is a refection of the employers’ recognition of the employee and of the responsibility they feel to protecting that employee beyond their working life.

A question of pensions
As employees get closer to retirement there is a twofold imperative.

Firstly increasing the value of the pensions pot and secondly ensuring the employee is well informed about what retirement means and the choices they can and should make to manage personal finances in retirement.

In the past employers perhaps thought the only thing they could do was support the former, but now many companies offer excellent services to support the latter. Retirement seminars, executive financial coaching are all available now to companies who see their responsibilities as stretching indirectly, beyond the day employees leave the company.

Employees really need to understand the full and increasing range of options available to them with regard to their retirement savings, and more employers are now looking to make this information and guidance available from some years prior to the targeted retirement date.

Retirement and financial planning can be a complex and for some an apparently impenetrable world, so employers are well advised to ensure that employees have full access to information and advice in this area.