A desire to be seen as an employer of choice has driven many organisations to reconsider the benefits they offer their employees. Karalyn Brown considers whether employee benefits packages attract and retain staff and looks at how companies can manage the provision of financial advice within such packages
A desire to be seen as an employer of choice has driven many organisations to reconsider the benefits they offer their employees. Karalyn Brown considers whether employee benefits packages attract and retain staff and looks at how companies can manage the provision of financial advice within such packages
Australians are becoming more financially savvy,” financial planners say. “They’re buying shares and investing in property. And while they read money magazines and watch lifestyle programs, they also look to the workplace for financial advice. And if you want to attract and retain the right staff…”
These statements are more than marketing rhetoric. Share ownership has boomed and the rising property market has made investors of ordinary Australians. We do trust family and friends, colleagues and workplace professionals for all sorts of advice – including the financial sort. And when we start a new role with an exciting new package, we look to our HR professional to recommend, or at the very least, explain our salary and benefit options.
The provision of financial advice in the workplace and who provides that advice is becoming increasingly more critical. HR has been restricted in information they can provide since the introduction of the Financial Services Reform Act (FSRA). Choice of super legislation is also anticipated to create more demands on HR professionals, as employees question their super options and organisations set up fair processes for selecting default super funds.
The competition for skilled staff and the desire to be seen as an employer of choice is driving many organisations to reconsider the ways to attract and retain staff through the benefits they offer. And while there are many advantages for employers who offer competitive packages, this will place more pressure on HR and remuneration professionals who will be required to field more complex questions.
Do benefits attract and retain staff?
Published research provides a level of debate about the importance of benefits to employee satisfaction. Hewitt Associates’ best employers research, for example, shows employees are engaged by high quality leadership, opportunities to develop their talent, reward for their achievements and a clearly defined company direction. If we accept this research, it would appear that while employee benefits may feature in reward and recognition offerings, they don’t seem to be a significant factor in engaging staff. If Hewitt’s best employers are offering employee benefits, not all are promoting them publicly. A scan through their career websites shows that less than half of the best employers list their benefits in detail.
Other research reveals a slightly different picture about the importance of benefits to employers and staff. An AC Nielsen and Inside Story study, commissioned by MLC, showed that employers place a high weighting on the importance of benefits. It revealed that 76 per cent of employers thought that staff benefits could retain people and 52 per cent thought they could attract people to an organisation. The same research showed that employees valued financial benefits highly.
The Edge of Suncorp benefits
With a geographically and functionally diverse business and more than 8,000 staff, financial services giant Suncorp faced significant challenges in developing a benefit package that would satisfy the needs of all their employees. As a result they established a cross business project and adopted an approach that viewed their employees as a separate customer niche.
“We treated our employees as a specific customer group,” says Simon Rumore, manager HR services. “We looked at their demographics… where they are, who they are, their age and from a financial planning lifecycle – what are they looking for.”
‘The Edge’ was launched in November last year. It offers Suncorp employees, their partners and authorised company representatives a range of products from the Suncorp business, including banking, personal and home lending, investing, super, wealth management and insurance. The program was named ‘The Edge’, because it means giving employees “cutting edge products…the edge to get ahead,” Rumore says.
Within the program, financial planning sits with wealth management and super products, Rumore explains. In accordance with the FSRA provisions, employees are given an overview of the product offering and the contact details for an accredited financial adviser. The adviser then consults the individual to identify their needs and, if appropriate, matches a product to suit those needs.
In keeping with current super legislation, Suncorp’s wealth management product makes provisions for employees to put more money into super and select their investment streams. With super choice on the horizon, however, Rumore says “we are conscious of the need to review super arrangements and make sure we are as competitive as can be”.
The Edge was promoted heavily upon its launch, as the take up of any program is partly dependent on the way it’s communicated. “All employees received a pack, product specialists did road shows and product advisers made contact with employees in the cafeteria,” Rumore says. The Edge also has a dedicated website and information is included in induction packs. The results to date are impressive. “We’ve done strong analysis of the take up rate of staff,” Rumore says. “84 per cent of staff have at least one product.”
Rumore views The Edge not specifically as a means to attract and retain staff, but more as one component in an employee benefits framework, where they considered rewards such as fixed pay and bonuses, superannuation, share ownership and reward and recognition programs. Rumore believes that employee benefits such as The Edge are valued by staff as a “non quantifiable benefit”.
Financial benefits: it’s academic
Not all organisations have the resources and knowledge to develop and offer their own employee benefits packages. There are different issues to be considered when using an external supplier. As a private boys school with an academic culture, Trinity Grammar School makes an interesting contrast to Suncorp.
Trinity Grammar School provides all 350 academic and non-academic staff with an employee benefits package through an outsourced provider, AdvantEdge. Initially offered as a means for staff to access advice on salary packaging options, employees now take advantage of travel, entertainment and shopping discounts and lifestyle financial planning. AdvantEdge provides financial advice through their planners either onsite at Trinity Grammar School or offsite as well as in group and one-on-one sessions.
Peter Stiles, Trinity Grammar School’s HR director, believes the employee benefits package has less tangible benefits than attracting and retaining staff. Although Trinity Grammar School is one of the few schools that offer such a package, the package has less to do with attraction, “but more to do with providing extra benefits for staff to feel happy and fulfilled”.
Offering a service as part of a benefit package, which is seen by employees as a benefit of the organisation, yet having limited control over the delivery of that package, can be a challenge for any HR professional.
Stiles believes that “someone needs to take responsibility for the service”. At the start of the year he meets with the AdvantEdge consultant and works out a schedule of seminars and events for the year. Throughout the year he regularly communicates with the consultant and passes on any staff feedback that needs addressing.
The client/supplier relationship is a two way equation. The supplier needs to believe that the client values the relationship and promotes the services of the supplier. Stiles is the one point of contact for AdvantEdge information. He disseminates this at the induction and forwards emails, posters, booklets and brochures.
Although the take up rate is “difficult to quantify”, Stiles says anecdotal feedback has been positive. He believes staff are satisfied and that while “in the private school environment, employee benefits are uncommon … people see [Trinity’s package] as a good thing”.
The benefits of employee benefits
There are many ways to manage the provision of benefits. It’s easy for a financial institution to create and tailor a branded benefit package specifically for their staff and control the quality of the financial advice their employees receive. Other organisations may need to rely fully or in part on the expertise of an outsourced provider.
As financial advice is so personal, Trinity Grammar School’s experience reveals how important it is to manage the external relationship through regular communication to raise issues as they occur. For the relationship to work the employer also needs to actively promote and support the outsourced supplier.
