A Business Development Bank of Canada Study – Future-Proof Your Business – identified three significant forces that will reshape the talent landscape in Canada for years to come:
Demographic complexity makes it much more challenging to assist employees in obtaining knowledge and information to help them better understand their current financial situation and gain peace of mind.
In today’s changing financial landscape, managing a workplace financial program – whether the purpose is for retirement or savings – is an important responsibility. It is also undoubtedly difficult to devote the time to with many conflicting priorities vying for attention. Organizations are faced with ongoing volatility, mounting uncertainty and inflationary costs, not to mention the time it takes to manage their programs properly. Combine this with the lingering concerns from the pandemic and its overall impact on the emotional and financial health of their organization, their employees, and their HR teams, it is becoming clear that the compensation picture is becoming more difficult to manage.
With an eye towards the future, here are 3 trends that are we seeing progressive employers explore with respect to their group retirement plan designs.
1. Flexibility, Flexibility, Flexibility Similar to health benefits, employees are looking for flexibility to address various financial needs. These needs may fall outside the immediate scope of retirement but will ultimately play into one’s ability to save over the long term:
2. Women in the workplace The impact that the pandemic has had on women in the workforce is well documented. According to Sun Life’s 2021 Designed for Savings Report, the average account balance for men exceeds women across all industry sectors. The lower savings levels are due to lower on average earnings* and some systemic plan design features.
Plan Design Considerations: Review eligibility rules and leave policies with a female lens
Many retirement programs still have a 12-month waiting period to join the plan. Women also take parental leave more often at which point their ability to save is put on pause. A mother with two children who has had to make 2 job changes over her career to balance the family, could easily have 3 or 4 less years of workplace savings than her male counterpart due to rules that have been in place for generations
3. Designing communication strategies that focuses on the needs of people The standard “one size fits all” communication approach doesn’t really work for employers with today’s multi-generational and multi-cultural workforce. Organizations that approach their communication strategy using demographic data and cultural realities have a greater chance of ensuring employees have opportunities to improve their financial mental health which can become a competitive advantage:
Plan Design Consideration: Design a communication strategy around the four generations in the workforce and those newer to Canada
What are you doing to address these forces and what trends are you seeing?
Thanks to Paul Webber for this guest post! Paul leads the Group Savings and Retirement practice at Green Benefits Group where he brings over 30 years of experience as both a plan sponsor and a consultant. So he knows a thing or two about retirement and savings trends!
If you want to chat more with Paul about this or other things, you can find him on LinkedIn and via the classics:
Gotta cite those stats *In 2018, females aged 25 to 54 earned $0.87 for every dollar earned by men on an hourly basis according to The gender wage gap in Canada: 1998 to 2018. Statistics Canada, October 2019.