Share plans: the (not so) secret ingredient to improving financial wellbeing
Pension savings are central to traditional employee benefit offerings; but that will be of little immediate use to a workforce dominated by millennials and Gen Zs, who are struggling to try and build a financial safety net, take initial steps to buy their first house, or make any progress towards their life goals and ambitions.
But is the answer to helping employees build greater financial resilience staring us in the face?
Working alongside retirement savings, share plans are a fantastic vehicle to help people with their financial aspirations that might be three or five years away. Both Share Incentive Plan (SIP) and Save As You Earn (SAYE) schemes are incredibly popular, with £470 million in income tax and National Insurance (NI) relief delivered to employees in the 2018-19 tax year alone. What’s even better is the flexibility added in 2018 whereby employees could take a 12-month break from savings without cancelling their plans; no doubt this would have come in very handy for some since March last year when the focus has been cash in the bank. Add in workplace ISAs and we have the perfect trilogy with the short-term covered too.
A common challenge is that share plans can be perceived as complex by employees, making engagement difficult. And although companies may be offering fantastic savings options through ISAs, pensions or share schemes, they’re not connecting them in a way that makes sense to their employees.
Clear, well thought out, and integrated communication is key. For example, often, communications relating to pensions and share plans are sent separately (both topics that require explaining), sometimes by different teams in a business. If the company isn’t joining the dots, how will employees manage to do it? By simply communicating in a more effective way, suddenly employees can see how the right combination of savings options can help them achieve their broader financial goals.
The role of technology
Technology obviously has a major role to play in engagement and effective communication. Your people are using digitally-enabled solutions multiple times every day for every aspect of their lives. So a great, technology-driven experience that allows individuals to access information to enable easy decision-making will be part of your strategy’s overall success.
Employees must be able to digest information and transact on their share plans on a platform that’s available to them when and how it suits them. If it integrates neatly with any technology that enables them to view and engage with their wider reward provision, it adds even greater value. As HR increasingly relies on technology solutions to enhance the employee experience of reward, it’s more critical than ever that your share plan platform is integrated so that employees can easily see how all the pieces fit together.
But a slick platform isn’t the answer to all of your problems; digitally enabled communication channels such as snappy video content, backed up by speaking to a real person, delivers a rounded experience leaving your people in a happy and confident place to make decisions.
So, what next?
The answer will be different depending on your business. However, consider this: according to research from Oxford University, happy employees are 13% more productive. If your financially resilient employees are happier and 13% more productive, what factor do you apply to that when they’re united behind the common cause of improving business performance? If your employees have solutions that meet their needs, whatever their financial goals, your business has happy people contributing more to its performance. A win-win result for everyone.
The author is Tim Lowe, head of share plans at Buck.
This article is provided by Buck.
In partnership with Buck
Buck is a global, integrated HR consulting, benefits administration & technology services provider.