Data from the World Bank shows that the number of people who are retirement eligible will increase significantly over the next 30 years. Specifically the number of people in the EU over the age of 65 will increase from 98 million in 2015 to 150 million in 2050. Contributor Mark Sullivan, Head of International Benefits Consulting at Fidelity Benefits Consulting.
This quantum of change will undoubtedly place significant challenges on state retirement and healthcare programs and will impact multinationals as they continue to deal with the consequences of inevitable legislative changes and a shift in the needs of the workforce.
Governments are already looking to manage the cost of an expanding retired population prompting changes in statutory retirement ages and the introduction of mandatory retirement plans – for example Denmark, Poland and the UK have all started implementation or extended their auto-enrolment retirement programs. The trend to shift the burden from the State to the private sector is expected to continue, and countries like Germany and Ireland are exploring ways to encourage (or even mandate) greater private retirement provision.
Whilst the retirement issues have often been highlighted in recent years the strain on healthcare systems, of increased demand from an aging population, is also presenting multinationals with challenges. HR is being asked to find solutions on how to maintain productivity when levels of stress and absenteeism are at historic highs. So how are multinational companies dealing with these challenges?
Supporting financial wellness
Increasingly multinationals are providing financial education and support to their employees. Historically this has been focused on retirement planning but there is now wide acceptance that the stress caused by immediate financial needs, such as debt management, is a significant employee and workforce well-being issue. Surveys in the US show that, on average, employees with emergency savings miss 1.5 fewer days of work per year, and that a third of employees spend 3 hours a week dealing with personal financial matters.
There are a range of tools and support materials which multinationals can leverage to support their workforce. These include providing education to employees on key topics ranging from debt management and budgeting through to retirement planning. Education is supplemented by providing employees with access to support where needed, again ranging from modelling tools and FAQ’s through to Employee Assistance Programs and retirement seminars.
Whilst such programs are common in countries like the US and UK we are seeing the same approaches being deployed internationally as multinationals install best practice. The focus is to better support employees in managing financial issues but also to enable planning for retirement which, in turn, supports healthy turnover whilst demonstrating the organisation’s cultural values.
Maintaining a healthy and productive workforce
Well-being programs have been in existence in a handful of countries for the last two decades and were originally built on the back of managing healthcare costs. In recent years the focus has significantly changed as multinationals expand these programs internationally with the focus of supporting a fit and healthy workforce. This deployment has been part of an HR strategy to meet a cultural goal, rather than one purely based on financials.
Examples of structures which have been deployed are often under the banners of:
- Physical Health – provide access to earlier interventions on illness and encourage individuals to understand their health and how they can improve it
- Mental health – providing support to employees to manage stress and deal with anxiety and depression
- Behavioural Health – providing education and encouraging individuals to have more active lifestyles, better nutrition and to tackle sedentary behaviours
Before specific initiatives are deployed internationally, consideration should be given to the need to tailored material or messaging for each country’s culture and employment landscape. Examples of global initiatives which have been deployed include global wellness days, smoking cessation and canteen pricing, which promote healthy options and global activity challenges. These approaches are focused on encouraging a healthy workforce under the banner of a global well-being culture. The consequence for many organisations is a better engaged and more productive workforce and better managed healthcare costs.
With a changing landscape of an ageing population, paired with an ever-evolving legislative landscape and increased pressures on multinationals from the global marketplace, there has never been a greater need for companies to adopt strategies to support the business objectives and manage costs to support attraction and retention of talent.
Developing and tailoring well-being programs can help address the wide range of challenges as part of an HR strategy. Specifically supporting employees through their financial needs can help reduce stress, but also enable them to plan and execute on their retirement plans. Encouraging a healthy workforce also reduces the increased problem of presenteeism, which has obvious business impact.
Studies have shown that well-being programs play a central role in delivering an experience that will attract and engage the workforce of the future and in today’s competitive marketplace for talent that is a critical business objective.