Even the term ‘Millennial’ evokes images of youthful, fun-loving folk who prefer good times over prudence any day of the week. But Employee Pension Plans are considered important amongst Millennials and employers that offer them are more attractive propositions.
Statistics show that Millennials are far from the carefree bunch they were once seen as. While they remain committed to defining ideals like career development and happy working environments, a growing number now have one eye firmly fixed on their futures too.
Perhaps more surprising, however, is the fact that employers are missing this factual nugget when recruiting. Remuneration and employee well-being are frequently highlighted, but even employers who do offer Employee Pension Plans fail to recognise retirement as even being on a Millennial’s radar.
The reality is that Millennials are no longer the youngest working generation. Born between 1981 and 1991, most are now heading fast towards 40, making the issue of their long-term financial wellbeing something much more serious.
Are Employee Pension Plans Really That Important?
The short answer is yes. According to a study from HSBC, ‘Future of Retirement 2017’, 65% of Millennials are more likely than the previous generations to cut back on other expenses in order to put more away.
A little as six years ago, in 2012, fewer than 50% of employees in the UK were able to save for retirement, with the gap between the cost of living and wages too wide. The most recent figures, however, show that over 71% of full-time employees are enrolled in a pension plan of some kind.
Admittedly, this dramatic reversal has been helped greatly by the introduction of Automatic Enrolment, legislation requiring employers to automatically enroll their employees in a pension plan. Under the terms of Automatic Enrolment, employers are required to put 2% of an employee’s salary into a private pension plan, and contribute a further 3% themselves.
A detailed survey carried out by Prudential revealed that 24% of UK Millennials have no pension at all, and 23% of those who do believe current contributions are inadequate.
Do Employers Need To Pay Attention?
Once again, the short answer is yes – and it is as true when it comes to employee retention as it does to recruitment.
A report from The People’s Pension showed that 83% of employees greatly value their workplace pension, suggesting they are happy to remain with their current employer if it means a better financial position in the long run. An impressive 69% of job seekers now actively look for pensions as a job benefit before deciding on a job.
Offering financial advice is also recognised as an important workplace benefit. Prudential’s survey reported that over 50% of Millennials want their employer to do more to explain pensions and benefits, with a further 28% admitting to being unconfident with financial matters.
Pensions as a Recruitment Benefit
Despite the evidence, many employers have still not realized how important Employee Pension Plans are to Millennials and are not actively promoted their own workplace pensions as a recruitment benefit.
In fact, other statistics from The People’s Pension make for grim reading:
- 46% of employers do not currently promote their workplace pension in the recruitment process
- 57% of employers think the amount they contribute makes no difference to employee recruitment
- 18% of employers intend promoting their pension scheme to existing staff in the next 12 months
- 15% of employers intend increasing promotion of their pension scheme in the recruitment process in the next 12 months
However, since Employee Pension Plans are not so high on employee priorities, promoting this single long-term employee benefit could be the key to attracting the top-quality recruits your organization is looking for.