HR teams may get headaches administering their company’s superannuation arrangements, but used creatively, corporate superannuation can become a central core to building engaged relationships with high value employees, writes Alex Dunnin
Employers can have a love-hate relationship with superannuation. They know superannuation is the fundamental building block for Australia’s retirement savings plans, it’s just they sometimes wonder why the burden for administering it has to fall on them.
To handle this some employers opt for a minimalist solution: focus on their core obligations, pay superannuation contributions equivalent only to the superannuation guarantee rate, choose a nondescript complying MySuper product as their company default and provide only basic superannuation support for their staff.
After all, company finance and human resource teams have enough on their plate running their businesses navigating already excessively complex regulatory and compliance priorities. Even worse, none of these executives want to expose their companies to unintended liability risks by trying to become superannuation, personal tax structuring and managed investment experts to their staff no matter how well-meaning their intentions.
Anyway, superannuation is a vanilla workforce-wide entitlement that is no longer a company differentiator so why put more resources into it than absolutely necessary especially when most employees aren’t too engaged with their superannuation anyway.
But is this approach a missed opportunity? What if employers could use their employer superannuation to deepen their relationship with employees, especially the high value employees who will drive the company’s future success? In a time when attracting quality staff and building staff loyalty is so difficult and training costs are so high, it’s a proposition worth exploring.
To do this it’s first necessary to challenge the notion that people aren’t interested in superannuation. Sure they may feign disinterest and be uncomfortable openly discussing it but hardly a day goes by now without superannuation being in the news. Federal elections turn on it and for global knowledge worker employees looking for remuneration flexibility in their late forties, fifties and sixties it’s one of the most important aspects of their financial lives.
In these circumstances an employer able to demonstrate they have chosen a trustworthy and reliable superannuation partner might be able to creatively leverage this into their corporate relationships – especially if there is something about this superannuation partner other employers may not be able to offer.
Central to this is of course choosing the right superannuation partner. Today there are 130 superannuation funds authorised to act as default MySuper products that operate in the employer superannuation market. But it’s the range of other choices around this core default MySuper offering that makes these funds different from each other.
Some prefer to focus on the simplicity of a single investment and choice and basic standard insurance cover, some offer investment flexibility that could even include access to direct investments and highly tailorable insurances, some specialize in servicing particular home industries.
Others meanwhile offer a range of services purpose-built for employers themselves such as online and personal financial advice for staff, company information briefings and clearing houses.
The human resources
department has a unique birds-eye view of industry career arks, which allows it to see trends that an individual, engrossed in the career moment, might miss. A well chosen superannuation provider, in this context, is a gesture of thoughtfulness and engagement with employee priorities.
A superannuation fund’s primary task will always be delivering reliable investment returns for reasonable fees but it’s how these are packaged, presented to company employees and how employers are supported that can make the difference between a seamless, calm superannuation experience and one that is an administrative headache for even the most professional payroll team.
Rainmaker SelectingSuper has been researching superannuation and super funds in Australia since 1992. Alex Dunnin is their director of research.