Where does super fit?
Well first of all super is an employer funded employee entitlement of very high value and any company’s super proposition is as important as what an employee receives as a wage or salary to manage their current cash flow. All employees have a current lifestyle to fund but all employees also need to set up their future lifestyle in retirement once work is over.
There are many research papers about what causes absence from work, and one of the major causes is financial stress. Roughly speaking, 80% of most workforces are under age 50 and most of them are learning from life experience how better to manage themselves. Most employees would benefit from some improved understanding of cash management and wealth creation.
In talking to many individuals about their super, I have personally asked an employee what is the biggest determinant of their target super balance at the point of retirement. So far no one has the right answer and most do not know their target balance. Salary and career are the biggest determinants of your future wealth from super as an employee benefit. Most employees spend their first twenty years of their working life indiscreetly complaining about management when career wisdom says they should be managing their approach to work as a career and not as a job.
The missed opportunity
Employers first have to consider their own current approach to super as a remuneration benefit and the rationale around the product they are using and are they comfortable with the services being provided. All product providers have a very well developed capability to win your business and then retain your business. Historically there is a fairly high proportion of employers who have been compromised by their product provider, as a consequence of a banking relationship or the existence of some reciprocal trade.
Every employer has a duty of care to ensure they not only have a justifiable reason in terms of their super provider but they also need to prove they have a methodology in monitoring the delivery of value to their workforce.
In general, all relationships in life involve an appropriate and visible expression of care as to why the other party in the relationship is important to them. So when we put our own personal brand in front of a potential employer, what sense of benefit do we get of the employer’s brand and how future situations might be managed. If the employer is vague on their own brand, they have already lost their ability to attract, retain and motivate their own staff, a factor that only increases costs and decreases overall staff efficiencies.
Super as a motivator
There are many choices of product that can be made in selecting a corporate super plan but there are only a few that will optimise super as an employee benefit.
Traditionally the financial services industry is well known for its complexity and then the existence of too many conflicted relationships around product. So understand what you need to learn and then how you find a service provider of quality to help you manage super as a superior remuneration benefit.
Here are the steps to be taken in managing super as a superior remuneration benefit:
- My advice to any employer is to first find a source of knowledge around super, partly to gain an education of product options and most importantly to examine the facts upon which they can make an informed decision about the management of super as a remuneration benefit.
- Examine what you currently have as a corporate super plan and consider how the existing arrangement is perceived by the employees. Examine what you might do to significantly improve employee perception of your efforts.
- Having identified the room for improvement, ensure you engage a consultant like AXIS with over 25 years experience in examining the comparable benefits of different service models presented by the financial services industry.
- Commence a change management program to improve the value delivered and also decide how you want to promote your super arrangement as a superior benefit to your workforce.
Within the above process, every employer needs to examine how much is being paid for the delivery of what can too frequently be described as a false display of value delivered. In motivating your workforce, it is important that every employer takes advantage of the opportunity to express a high level of care around an employee benefit as valuable as super.
This document was prepared and issued by AXIS Financial Group (ABN 21 092 889 579, AFSL 233680). The information contained within it is not advice. It provides general information only and does not take into account your individual objectives, financial situation or needs. You should assess whether the information is appropriate for you and consider talking with your financial adviser before making an investment decision. Information in this publication, which is taken from sources other than AXIS Financial Group, is believed to be accurate. However, subject to any contrary provision in any applicable law, neither AXIS Financial Group, nor its employees and directors, provide any warranty of accuracy or reliability in relation to such information or accepts any liability to any person who relies on it.