Is it true that employers have more challenges managing their workforce nowadays compared to 50 years ago? Are the demands on employers more onerous today than they previously were? Are managers nowadays well equipped with the skills to manage a diverse workforce in a more complicated and economically challenging world?
The internet arrived in the 1990s and became more prevalent as a modern-day tool in the early 2000s, developing the means for everyone globally to share opinions. Consequently, a noticeable difference in attitude to employment can be seen between people in their forties and fifties compared to younger generations.
The internet is not the only factor at play. The two-party democratic system of government tends to lead to rules changing in one direction or another every four years, impacting conditions of employment and the payment of rewards for work effort.
Compulsory super arrived in the same decade as the internet, yet unlike the internet, it has not really changed or evolved much over successive decades, and many employers still manage this employer-funded employee entitlement in much the same way as they did back in the nineties.
The Dominant Market Model
While employers are accountable for funding super as an employee benefit, whether this benefit is optimised usually gets left with the individual employee.
What is misunderstood by most people is that choosing a super product is only part of the equation. Super products do not generally provide individual employees with the necessary service and personalised advice to help them optimise their super benefit effectively over the long term.
Employers are missing a major opportunity to help employees improve their long-term financial situation by providing access to appropriate tools and resources to help them optimise their super benefit. Every employee will want an idea of how their super is doing versus what it could be doing and what they need to do to get there.
One would argue that this sounds like a statement of need by the employee in the circumstances, which, given the vital role of super in generating income after work, is significant. Most employees are typically short of the technical skills required to optimise their super asset and future lifestyle in retirement.
Employer help is obviously needed and would be valued.
Most people in financial services companies talk about financial education or financial wellness, but the term financial awareness is far more appropriate in these circumstances.
If someone wants to manage their super themselves, the financial skills required to decide how to access investment markets, what asset allocation is appropriate, to examine the global economy and then understand what geographies are good to invest in or not are easily classed as a highly skilled service.
From an employer perspective, the resource engaged to optimise super at an individual account level must be able to provide advisory services to the whole workforce and not just to members of the employer default super plan. The opportunity to become more financially aware of how to optimise super over the long term is something all employees should receive.
Before making any changes or introducing new initiatives in managing super as an employer-funded employee entitlement and consequentially as a superior remuneration benefit, it is essential to engage with the workforce. A Consultation Team should ideally be formed, including no more than two appropriate managers and between 8 and 12 employees made up of plan members and employees who have selected their own product.
Essential elements for participants to gain awareness of as a result of discussions within the Consultation Team forum are:
- The platform service model – employees in the employer super default plan.
- The choice service model – Where the employee selects a personal product.
- The common mistakes embedded in the product service models.
- The personal service model.
- How to optimise super as a personal asset.
- Using a client portal to obtain super optimisation advice and service at an affordable price.
Once the Consultation Team understand the merits of optimising super at an individual account level, planning can take place around how best to introduce it to the entire workforce, with results monitored and managed through the Consultation Team.
For more information on how to manage super as a superior remuneration benefit, call 1800 467467 and ask to speak with Richard Matsinger or Ryan Teo, email firstname.lastname@example.org or visit our website www.axisfg.com.au