Over two in five, 42 per cent, of businesses state that their ability to recruit and retain staff has been improved by their pension scheme, it has been reported.
According to a new survey by the Confederation of British Industry (CBI) and Aegon, while pensions have been a key component to recruiting and fostering employee loyalty, greater engagement and the provision of advice may be needed to guide awareness of the benefits.
The report noted that at present, 92 per cent of surveyed firms are contributing above the statutory minimum level for auto-enrolment schemes. However, there is more to be done by firms to help businesses to realise the value of pensions in the recruitment process and continue the retention of staff, Aegon and the CBI said.
Considering the results of the study, which surveyed businesses of all sizes, Aegon Workplace Investing managing director Paul Bucksey stated that “there are more employers than ever considering adding advice to their offering”, to assist with employee engagement.
Of the surveyed firms, nine in 10 said they felt a responsibility to better engage employees with their pension schemes and over 50 per cent said that they have a strategy in place to achieve better pensions engagement.
Nonetheless, firms have realised that more needs to be done. A much lesser 12 per cent of respondents said they are happy with current employee engagement levels.
CBI managing director Neil Carberry, said: “While many businesses rightly recognise the positive effect that their investment in pensions can have on recruiting and retaining staff, others need to open their eyes to grasp the opportunities in front of them. Engaging better with your workforce on pensions is not a ‘nice-to-have’ but absolutely fundamental to the success of workplace pensions schemes and well-funded retirements for workers.
Reasons for lack of engagement, as reported by the employers, included diverting money from pensions to other financial responsibilities (59 per cent), a lack of awareness among employees of the importance of saving for retirement and having insufficient resources within the business to engage with employees (24 per cent). In addition to this, some employers explained that they were uncertain about where to find high-quality advice for staff.
“Although many firms do a great job, there’s an awful lot more that can be done to get staff engaged in their financial futures…Many younger workers, those on lower incomes and employees who have been at a business for a short period are not getting the support they need to get to grips with issues that will help determine a successful path to when they retire,” Carberry added.
Of the survey participants, 63 per cent said that pensions play a part of an employees’ induction process, 60 per cent said they provide guidance from an external provider and 54 per cent also direct staff to publicly available pension guidance. Further advancements such as the use of technology including digital information portals was used by 51 per cent of businesses.
From these engagement processes, 44 per cent said it would lead to them being able to better retain staff.
Bucksey added: “Engagement is the key to changing behaviours and helping employees achieve long term financial security. When an employer gets behind their scheme and encourages the workforce to take action, engagement levels rise.
“Some employers are already going the extra mile to support their workforce in getting their pensions on the right track. But what remains clear is that whether you choose to hold roadshows, workshops or webinars, offer online financial planning tools or workplace financial advice, you need to do it regularly, as part of a wider financial awareness strategy.
“From recruitment to retirement, long-term planning and regular action will help your employees reach a point where they can afford to retire.”
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