Reimagining Benefits to Engage More Holistically

Employee benefits and incentives to increase superannuation have always played a key role in helping support employees’ lives outside of the workplace — minimising expenses, providing a financial safety net, and enabling people to enjoy their retirement.

The vast majority of employers — 81% — say that benefits play an important role in building and sustaining workplace culture, which we know is critical in driving a sense of balance.

As employees are bringing more of themselves to work, they are expecting more from their employers. They see their employers as responsible for supporting their overall well-being — inside and outside of work. Much of that support can come in the form of benefits.

The ‘must have’ benefits that Australian employees expect to receive are flexible work arrangements (47%), training and development (41%) and additional annual leave (32%).

These benefits are often treated as individual products and communicated in a way that focuses primarily on plan details and payouts — which misses an opportunity to effectively demonstrate both how benefits can work together as a whole package and the role they play in employees’ lives.

Additionally, we found that the personal view of many employers is that the company offer benefits that err on the side of being cost-effective for the business rather than offering what is best for their staff.

If we look at benefits more holistically, we can start to see benefit packages as suites of products that employees can choose from to meet their individual needs.

Traditional benefits — such as additional superannuation contributions, health insurance and additional paid parental leave — are highly valued by employees, and help manage common needs and expenses.

They — along with supplemental benefits, such as life (death) insurance, and Total and Permanent Disability (TPD) insurance — provide a financial safety net that cansupport employees’ diverse needs. However, some employees do not realise they need it.

Many employees believe their private health insurance alone will cover all health-related situations and don’t plan for out-of-pocket costs (such as an insurance excess or unexpected accidents and disabilities) or the impact those costs can have on daily life.

Our qualitative research reveals that younger generations, in particular, believe that they will be looked after by family or covered financially via government bodies should the unthinkable occur. Offering a range of traditional and supplemental benefits — and providing education on how they complement each other — can provide employees a solid foundation of protection.

Life insurances such as TPD, Trauma or income protection (IP) are highly desirable for employees, but only around 60% of employees understand how the benefit works; meaning there is an opportunity for employers to better communicate, if they do offer such benefits.

Numerous studies have shown Australians are increasingly anxious about their finances or facing financial stress. While many of the benefits we have discussed help employees manage expensive, unexpected life events, there is more that employers can to do to assist their employees with overall financial acumen to allevieate the day-to-day stressors.

Because personal finances is employees’ top concern, helping them better manage short-term and long-term financial situations will help prevent burnout and enhance worklife enrichment.

And while today’s employees feel confident in their finances, the data actually shows that the reality of their situations is not aligned to this confidence.

Nearly two thirds (63%) of people say they are confident in their finances, but more than half (55%) of employees feel stressed at work, with finances being the number 1 cause of stress and retirement being the main driver of that stress. Therefore some people’s confidence is ill-founded.