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Pension schemes don’t exist in isolation - the pension strategy always has to be looked at in the joint contexts of the wider employee benefit and engagement strategies.
‘Better outcomes for pension scheme members’ takes joined up thinking that incorporates the evolving employee experience. The Covid-19 pandemic is the biggest crisis that the UK has had to deal with since World War II, resulting in a seismic impact on the public, government, economy, employment and education. For large sections of the UK workforce, financial confidence has been shaken to its core.
In our own work with employers, Barnett Waddingham approach employee wellbeing based on six key pillars - job security, financial security, health, support, protection and work/life balance – designed to help employers identify their own workforce’s specific issues and priorities.
In the current crisis, job security and financial health are coming into laser sharp focus, and our research shows that the relationship between employers and employees has never been more important.
4me, our digital platform, helps bridge the gap between employers and employees. It provides employees with an easy, interactive way to choose the financial benefits they really need, at a time that suits them, thereby making a positive difference to their lives. In addition, 4me enables employers to communicate with their employees as customers, in an engaging, interactive and relevant manner. In the current climate, as you’ll see below, good communication by employers is crucial.
Lack of confidence in health of finances
Now seems like an apt time to revisit the findings from our survey carried out in April 2020 with a representative selection of over 2,000 UK employees, to understand their situations, how they are feeling and coping and how well they feel supported by their employer.
Of the employees in the group we surveyed we found that many have experienced a sharp drop in confidence in their financial health in light of the Covid-19 pandemic. Comparing how they felt before and after the pandemic, three-fifths (59%) of employees were confident in their finances then, but now that figure has dropped to just over a third (35%).
of workers who have been furloughed have seen the most significant drop in confidence
of employees are getting radio silence from their employer on financial health
of the UK workforce are satisfied with employer communication during Covid-19
- Workers who have been furloughed have seen the most significant drop in confidence, falling from two thirds (65%) to under a quarter (23%)
- Yet big firms are failing to adequately communicate with their employees on financial health, with four in ten employees (42%) getting radio silence from their employer
- Less than half (46%) of the UK workforce say that they are satisfied with the communication from their employer during the Covid-19 pandemic.
Furloughed workers have been hit the hardest by the pandemic. They have experienced the greatest drop in their financial confidence from three-fifths (60%) to under a quarter (24%). The government’s job retention scheme has enabled employees to retain their jobs, but with many living on 80% of their normal salary and with increased anxiety about their job insecurity, it has impacted their sense of financial health. Moreover, a fifth (18%) of employees currently on furlough ultimately expect to be made redundant.
Younger workers, aged 18-24, are the most insecure about their finances at just under a third (32%) now reporting financial confidence, compared to a half (52%) before Covid-19. Men feel more confident than women in their financial health both before and after the pandemic. Men’s financial confidence has dropped from 60% to 36%, versus women’s from 58% to a third (33%) now.
The importance of good communication
A third (34%) of employees say they have received no communication, and a quarter (27%) only a little communication from their employer about financial health.
For furloughed workers, who are more likely to be struggling at this time, almost a third (31%) have heard nothing from their employer to support their financial health, 28% have had a little communication, and almost half (46%) have had no communication regarding their mental health.
Perhaps surprisingly, the biggest firms are falling furthest behind when it comes to communicating with their employees about financial health. Two-fifths (42%) of employees at firms with over 5,000 staff say that they have received no communication from their employer. This compares to just over a quarter (27%) of employees at mid-sized firms with 50-200 staff, and the group who are also most likely to receive ‘too much’ communication.
Good communication from employers is key to maintaining confidence and wellbeing, and this is a critical time to be engaging with employees to help reduce their worries about their financial and mental health. This is where 4me, our digital platform for employees, can help – with clear, engaging and relevant communications.
What do employees think about communications?
Effective and engaging communication is about the balance between quality and quantity, and ironically, there is a very strong correlation in these results between the two:
- Less than half (46%) of the UK workforce say that they are satisfied with the communication they’ve had from their employer to support both their mental and financial health during the Covid-19 pandemic
- Younger employees are the most satisfied with financial health communications but the least satisfied with mental health communications.
- The larger companies that have delivered more effective mental health communications, but the trend is the opposite for financial health communications.
Moving forward - investing in engagement
Our research reveals a concerning lack of satisfaction with employer/employee communication. Even as employers face the significant challenge on business operating models, radio silence is not ok and can only serve to make the task of maintaining pension scheme engagement all the more difficult.
UK employees are obviously deeply concerned about the future and their financial survival. It is essential for them to feel that their current situation is understood.
For more information about this topic, please contact your usual Barnett Waddingham consultant. Or you can get in touch with me below.
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