If you read nothing else, read this…
- Broader societal trends are impacting employees and concerning employers.
- The cost of living is a particular issue, with 51% of staff concerned about their finances.
- Employers are increasingly helping employees save money for deposits on houses, and even to get access to mortgages.
- Some organisations are now offering tailored health screening programmes to protect against particular conditions.
Today, staff must juggle a much more fluid labour market with other wider societal trends, including trying to get on the housing ladder, paying off debt and saving for the future, at the same time as safeguarding their own physical and mental health.
A step onto the property market
For many, getting onto or moving up the housing ladder is a priority. There are measures employers can take here that would help. John Harding, pay, performance and risk partner at PricewaterhouseCoopers (PWC), highlights the ability to offer employees tax-advantageous loans of up to £10,000, which could be used to help build a deposit, as well as the new housing individual savings account (Isa) that will be introduced in October this year.
“Employers could have a role to play as a promoter, making sure their younger employees realise that there is this opportunity to get a large subsidy from the government towards the deposit for a first home,” he says.
This could see large sums built up over time, which people do not notice coming out of their pay each month, he adds.
Health insurance firm Simplyhealth has taken steps to help its own staff save up through its First Home scheme, under which employees can deposit 3–6% of their basic monthly salary into a savings account, which will then be matched by the business. To date, more than 50 employees have saved enough for a deposit in this way, says Corinne Williams, head of HR at Simplyhealth.
Other organisations have developed their own tailored packages, looking not just at the initial deposit but also mortgage availability. KPMG, for instance, has negotiated an arrangement with Clydesdale and Yorkshire Bank under which all its employees have access to a private banking relationship. This means they can get preferential deals offered by the bank, but it also offers the prospect of a greater degree of understanding around potential future earnings, so, in theory, they can borrow more than they would be able to if they walked into a high-street bank.
Sara Flanagan, head of employee benefits and wellbeing at KPMG, says: “We recruit a lot of graduates each year. Their future potential is quite high, but at that early stage in their career when they need the support it’s very difficult for them to get it. We were asking the bank not just to look at them now, but at who they will be in the future.”
The concept has generated interest from new and existing employees. “I get quite a lot of anecdotal feedback from new joiners talking about how unusual it is and asking me to explain it a bit more,” she adds.
Financial worries
For some employees, it is another form of finance that is causing them issues. According to the Financial stress is impacting UK employees research, published by Sodexo in April 2014, more than half (51%) of employees are worried about their finances, with one in five saying this affects their productivity at work.
Employers are also becoming increasingly concerned about staff getting into debt, particularly on credit cards and through payday loans, says Tobin Murphy-Coles, commercial director at Aon Employee Benefits.
“Payday lenders are increasingly recovering debt through attachment-to-earnings orders, so employers are now beginning to see at first hand the scale of this,” he says.
Some are starting to signpost employees to debt support resources or their own employee assistance programmes , but increasingly businesses are also looking at providing financial education in the workplace , to help employees get their finances back on track.
This is particularly effective for lower-paid workers, who are most likely to be affected by high levels of debt and may be able to benefit from some easy solutions. Henry Tapper, director of First Actuarial, says: “Those between the minimum and the living wage are a good target market for this, and these are the people who are currently excluded from any form of advice, because financial advisers won’t go near them.”
There are also some practical measures employers can take, says Gabbi Stopp, head of employee share ownership at IFS Proshare. “Simple things can help immeasurably,” she says. “Paying staff in the middle of the month so that bills can be met, allowing staff to save through payroll deductions and setting up dedicated online portals on [organisations’] websites are such examples of how [employers] are discouraging negative employee behaviours.”
Supporting employees’ health
Providing healthcare or wellbeing assistance is another area to which employers are increasingly finding themselves drawn. According to the Simplyhealth/YouGov Everyday health tracker research, published in June 2015, 44% of staff currently receive some kind of support from their employer, with bikes-for-work schemes and workplace counselling the most common measures.
But the trend towards paying off debt or saving money for house deposits or simply to meet the cost of day-to-day living means there is a growing move by employees to opt out of some health benefits, says Murphy-Coles. In addition, providing private medical insurance to all employees is viewed as unaffordable by most organisations.
Instead, some employers are looking to screen for particular conditions that are more relevant for their own employee base, as well as conditions such as a cancer, says Alistair Dornan, head of health management at Capita Employee Benefits. “A whole-of-workforce approach means [employers] can offer enhanced medical provision to employees at a fraction of the cost of full private medical insurance,” he says.
Nutrition business Danone has developed a tailored health screening programme for more than 600 staff, looking out for particular issues such as vitamin D deficiency and coeliac disease. John Mayor, head of UK reward at Danone, says: “We found that 40% had a vitamin D deficiency, so we now offer free supplements through an oral spray for all the population. Then we had an element of abnormal liver functionality in 32% of people scanned in our dairy business, so this year we’re taking a deeper dive into the potential issues behind it.”
This year, the organisation will also introduce a fitness assessment after a high number of people were found to be overweight.
In the future, the emphasis on health may even need to extend to care of elderly relatives. According to the Employee Benefits/Towers Watson Flexible benefits research 2014, published in April 2014, the provision of emergency eldercare via flexible benefits schemes grew by a huge 142% in 2013.
The emergence of broader societal issues and the impact these can have on employees mean employers will increasingly have to develop strategies to help people cope, whether they like it or not. “Employers need to start thinking about a whole array of new things that they haven’t considered before as part of a benefits package,” says Murphy-Coles. “The challenge is trying to get the cost-benefit analysis right so that the investment and the benefits themselves will help reduce the issue they have got.”
What employees think…
The PricewaterhouseCoopers Employee benefits research of 2,400 UK employees, published in April 2015, revealed how staff view benefits related to the housing market, debt and healthcare:
- The most popular benefit employees would like to see introduced, cited by 44%, was discount shopping vouchers, suggesting the cost of living is a real issue.
- Some 37% of all employees list access to better mortgage rates as a benefit they’d most like to see. This rises to 43% for those in their 30s.
- Healthcare was the third most popular benefit, with 36% saying they would like to see this brought in.
- Two-thirds of employees would not sacrifice take-home pay for any benefits.
Case study: Goodman Masson attracts talent with supportive benefits
Four years ago, financial recruitment firm Goodman Masson reviewed its remuneration package and implemented a number of measures as part of its Benefits Boutique flexible benefits scheme.
A central part of this is its Mortgage Fund, into which staff can contribute as much as 20% of their salary each month for three years, with the firm then adding a further 33% of the total. For staff who also put in their bonus, the employer contribution is even higher, at 50%.
Guy Hayward, chief executive of Goodman Masson, says: “If [an employee] deposited £300 a month and [their] bonus into the fund, then with our top-up it would give a value after three years of more than £40,000, so clearly a sufficient deposit for [their] first property. ”
Thirty-four employees currently use the scheme and three people have already bought a property.
The organisation operates a similar system to help employees pay off student debt, to which the business contributes 50% of the amount paid in after three years.
Hayward believes that its efforts to better engage staff, which have also included designing chill-out zones and various recreational facilities, are already having an impact. “In the year to date, 69% of people that we’ve hired have come to us direct,” he says. “Four years ago it was 25%. Those businesses that are more creative will attract the best talent.”
Guy Hayward will be speaking on ‘How to boost employee engagement with tailor-made benefits’ at Employee Benefits Live on 22 September
Viewpoint: Employers play a vital role in tackling societal issues for staff
Broader societal problems affect a firm’s performance because employees do not leave their personal problems at the door when they enter the workplace. Worries about debt, housing and personal relationships affect how many employees perform at work. This is because difficult personal circumstances affect energy levels, concentration, engagement and, ultimately, the ability to remain in work.
Employers have an important role in facilitating or offering a range of services to help employees address these issues. For example, in a context of high levels of personal debt and the ready availability of pay-day loans, employers may work with respected debt management services to offer impartial and independent advice to employees who may not know where to go to access these services. Other employers may also offer services as part of their recruitment and retention practices. For example, public sector employers may publicise the availability of housing for key workers in areas with a shortage of affordable housing and private sector employers may work with mortgage advisory services.
Offering a wide range of services helps generate a climate of support in which employees feel the use of these services is encouraged and backed by the employer, rather than likely to result in questions relating to their ability to perform in a job.
An important aspect of this support is encouraging open discussion of the issues employees may have and how employers may help them. For example, an increasing number of employees will be required to care for elderly relatives and plan for their own long-term care. It is important that employers understand and support staff in these activities through the provision of flexible-working arrangements and making financial advice available when appropriate.
Employers that offer a wide range of support to employees who encounter housing, debt and caring responsibilities at different times of their lives are likely to attract and motivate the talent required to succeed. They are also likely to help employees perform effectively in their jobs. Such support is also vital for employees to remain in work and improve their quality of life.
Nick Bacon is professor in human resource management at Cass Business School
