Friday, January 20, 2012
[IWS] Towers Watson (UK): Money problems affect performance for one in ten workers [11 January 2012]
IWS Documented News Service
Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
Towers Watson (UK)
Press Release 11 January 2012
Money problems affect performance for one in ten workers
Towers Watson releases research about the future of workplace savings
London, January 11, 2012 - One in ten private sector employees have money worries which prevent them from doing their best work, which rises to one in five for those earning £20,000 - £30,000 according to Towers Watson research. The research entitled, the future of workplace savings, also shows that over 86% of employees now have less trust in their company pension than 15 years ago, up from 74% in 2008, when the company first produced this research. In addition, the study shows that only one in three companies believe they are getting value from their current benefit spend.
Philip Percival, senior consultant at Towers Watson, said: “These results should be a wake up call for employers and are a indication that the traditional method of benefit provision may not best fit today’s workplace. Clearly there is a need to rebuild trust in pensions which has been damaged by the pace of change in the private sector during the past decade. In spite of these pension changes, employers still spend significant sums on benefits and so it is disappointing to see it is not always felt to be delivering value.”
According to the research, corporate savings platforms are seen as a potential solution for the employee benefit market with 75% of them intending to offer access to other savings products in the next five years, compared to only 6% that do currently. Furthermore, almost two-thirds of employers intend to offer access to a wealth management platform in the next five years (only 2% do so already) and almost 80% of employers think it would improve employee perceptions of their benefits programme.
Philip Percival said: “These findings show strong support for the concept of corporate savings, provided it is supported by financial education and financial planning. Employers have clearly made the link between greater savings choice and the need to educate employees.”
The report advises employers to think carefully about what their workforce really needs with regards platforms, given the profusion of options in the marketplace, and that this can be achieved by understanding the profile and financial aspirations of their workforce. The survey also found that the level employee engagement around DC plans is often very low, although this is coupled with employers reporting they plan to take a broader, more active role in assisting their employees with their finances.
Phil Percival said: “There is a real need to rebuild trust in savings in the workplace given the reputational damage pensions in the private sector have suffered during the past decade and the key to solving this is to educate employees about their financial planning."
Note to editors
This research forms part of Towers Watson’s Work, Life and Money initiative which helps employers redesign their benefits package to support changes in employees’ financial priorities as well as educate and support them to manage and growth their wealth more effectively. At its core is a new way of designing and delivering savings through the workplace backed up by an effective communication strategy.
This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.