Employee Financial Confidence Report€¦ · GEN X BABY BOOMERS . 8%. GEN Z . CURRENT FAMILY COMPOSITION Married with kids . Single, living alone Other. ... emotional, social and

Employee Financial Confidence ReportAustralia Edition

Published January 2020© 2020 Arthur J. Gallagher & Co.

GALLAGHER

GALLAGHERBENEFITS.COM.AU

3

Table of ContentsSURVEY OVERVIEW ................................................................................................................................................................................................................................4

INSIGHTS & IMPLICATIONS SUMMARY ...........................................................................................................................................................................................6

PERSONAL FINANCIAL CONFIDENCE .............................................................................................................................................................................................8

RETIREMENT ............................................................................................................................................................................................................................................. 16

FINANCIAL WELLBEING AS A BENEFITS FOCUS .................................................................................................................................................................... 20

FINAL REMARKS .................................................................................................................................................................................................................................... 29

CONTRIBUTORS ...................................................................................................................................................................................................................................... 30

ABOUT GALLAGHER ..............................................................................................................................................................................................................................31

https://gallagherbenefits.com.au/

4 AUSTRALIA EDITIONEMPLOYEE FINANCIAL CONFIDENCE REPORT

Survey OverviewThe importance of mental health has captured the attention of Australians in recent years, with this once-taboo topic now being discussed openly. And a keener awareness could not have come at a better time. With the line between work and life becoming increasingly blurred, more employees feel they’re managing stress almost 24/7.

Health and wellbeing have become top of mind for many employers too, but they may not realise just how much anxiety amongst employees is caused by personal financial stress. Findings from Gallagher’s first Employee Financial Confidence Report show that employers would be equally well-served to pay closer attention to the financial health of their employees. In a fast-changing world that can bring new uncertainties and challenges at an unprecedented pace, helping employees manage their financial futures is a sensible investment in future of the organisation.

Over 1,000 employees across Australia participated in the survey, representing a spectrum of job roles, income levels and generations, and their responses reveal that no group is immune to financial stress. Concluded in September 2019, the research dug into key elements of financial confidence, including the causes of financial stress and its impact on employees individually and the workforce as a whole — as well as employer initiatives and resources that can help alleviate these effects.

A smaller 2019 Gallagher survey of Australian employers uncovered additional insights on this topic. One discovery is that key gaps exist in organisations’ perceptions about their employees’ actual circumstances and needs. A better understanding of these contradictions is useful in identifying key opportunities to more closely align initiatives and benefits with workforce preferences.

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JOB ROLES

GENDERGENERATIONS*

*Due to rounding, percentages do not total 100%

PARTICIPANT PROFILE

50%

2%

FEMALE

UNDISCLOSED

48%MALE

47%

34% 12%

MILLENNIALS

GEN X BABY BOOMERS

8%GEN Z

CURRENT FAMILY COMPOSITION

Married with kids

Single, living alone

Other

Married without kids

De facto

Single, living in a shared space

14%

44%

13%

11%

11%

7%

ANNUAL HOUSEHOLD INCOME (BEFORE TAX)*

$50,000 or less

$151,000–$200,000

Undisclosed

$51,000–$100,000

$101,00–$150,000

$201,000 or more

33%

9%

24%

14%

14%

7%

3% 75% 16% 4% 2%

ENTRY LEVEL STAFF MANAGER DIRECTOR EXECUTIVE




Insights & Implications Summary Financial stress affects workforce wellbeing, engagement and performance, creating high stakes for employees and employers alike. In particular, escalating costs are associated with a low investment in employee financial health.

When physical and emotional health declines, the potential for increased absenteeism rates and insurance claims rises. It’s an adverse relationship that should not be left unchecked. This particular type of stress also adds a shared cost to the balance sheets of Australian employers that’s estimated at an astounding $47 billion — greater than the annual Australian Defence Force budget.*, 1

Employers’ identification of financial stressors and employees’ actual experiences are mismatched. Organisations rank credit card debt along with mortgage qualification and payoff as the top culprits. But from their employees’ point of view, unexpected costs and having sufficient savings and living expenses cause the most distress.

A complacent attitude towards financial security influenced by a strong economy, record-low interest rates, and a well-established superannuation and aged pension system may help explain the employer outlook. Yet there's a distinct need to include financial health as part of an integrated approach to employees’ whole health, which also centres on the physical, emotional, social and career aspects. Strategic investments in wellbeing benefits energise employees and inspire better work — supporting better organisational performance by serving as a catalyst for growth and profitability.

The power of two-way employee communication

Largely due to rising property values, the average net worth of Australians has increased significantly between 2005–2006 and 2017–2018 — but average disposable household income (HHI) has risen only $44 per week.¹ Spending power also remains relatively stagnant despite strong labour competition.

Communications that underscore the value of available financial benefits provide an opportunity for employers looking to attract and retain employees without increasing wages. In addition, surveying employees on their preferences for financial confidence support shows respect for their opinions — and may give them a voice in decision-making. The surveys themselves can even serve as a reminder of available benefits that influences greater participation.

Improving awareness of employee needs

Over the years, formal schooling has focused less on personal financial management. This shift away from educating students on a critical life skill may contribute to lower levels of financial confidence, especially among younger employees. In addition, a recession-free period of 28 years has spared many employees from an experience that often makes a compelling case for constructing a financial safety net.

Employers should consider conducting a workforce evaluation to expose a wide spectrum of near-term financial stressors that are frequently under-addressed, if not entirely overlooked. For instance, results may point to unexpected events such as a family death or self-driven funds mismanagement like overspending. Regardless, employees at all ages and income levels face challenges that require better tools and programs, including education.

*The impact of $47 billion is based on the number of work hours spent focused on personal financial matters each week, multiplied by the average hourly wage for a 46-week work year. Data source: Australian Bureau of Statistics.

$47BESTIMATED ANNUAL IMPACT OF EMPLOYEE FINANCIAL

STRESS ON AUSTRALIAN EMPLOYERS*,1

$44AVERAGE INCREASE IN WEEKLY HHI OVER THE PAST DECADE1

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Understanding and acting on employees’ financial protection priorities

As they near traditional retirement age, employees are more likely to overextend their period of employment if they’ve struggled with obstacles to adequate savings. Solutions for helping them build financial security often target individual outcomes, including retirement readiness. However, regular evaluation of retirement plan design is essential to optimising employer spending in alignment with workforce needs and organisational objectives.

Employees overwhelmingly expressed a moderate to extreme interest in employer-paid insurance — naming it the most important financial confidence initiative (82%). But for employers, group insurance didn’t make their top three. Organisations may be underestimating the value this benefit holds for their workforce. By increasing employee engagement through the super fund and insurance options, they turn an employer obligation into a valuable employee benefit. Offering additional resources like financial coaching sessions and literacy education would also encourage employees to acquire retirement planning and saving skills.

Prioritising financial wellbeing — with the support of direct communications, educational opportunities and other resources — helps employees reduce their financial stress by altering their near-term spending habits. Long-term saving can then follow, improving financial confidence as well as on-time retirement and real-time business outcomes.

¹Australian Bureau of Statistics, “6523.0 - Household Income and Wealth, Australia, 2017-18,” July 2019

82%PLACE MODERATE TO EXTREME IMPORTANCE ON COMPANY-PAID INSURANCE AS A FINANCIAL CONFIDENCE INITIATIVE


https://www.abs.gov.au/ausstats/[email protected]/Lookup/by%20Subject/6523.0~2017-18~Media%20Release~Average%20household%20wealth%20tops%20$1%20million%20(Media%20Release)~21



*Due to rounding, percentages do not total 100%

Personal Financial ConfidenceRegardless of their job role, income or generation, many employees are somewhat uneasy about their current or future financial wellbeing, or both. The levels and specific sources of stress vary, but concerns about money matters tend to be persistent or recurring. And they can be pervasive — often accompanying employees to work and sometimes affecting their health. Most employees are making an effort to manage their finances, but they’re going it alone.

Defining financial confidence

In describing what financial confidence means to them, most employees emphasise adequate finances to enjoy life (36%), enough savings to cover unexpected expenses (25%) or freedom from financial stress (21%). Less than 10% highlight debt elimination (7%) and the abilities to retire on time (6%) or meet expenses (4%).

Baby boomers are 8 to 12 points more likely than other generations to consider the ability to leave the workforce — by their targeted date — a hallmark of financial confidence. And generally, as employees get older, they’re less apt to define confidence as having enough savings to cover unexpected expenses.

Almost three-quarters (73%) of employees classify their level of financial confidence as slight or moderate — and 22% aren’t at all confident, while just 4% are highly confident. Overall, confidence was lowest among Gen Z, who are relative newcomers to the workforce, and employees with income below $150,000. Baby boomers and workforce members whose HHI exceeds $150,000 felt the most secure.

Factors that define financial confidence for employees

Category BaseNo

financial stress

Enough savings to cover unexpected expenses

Freedom from debt

Adequate finances to enjoy

life

Ability to meet day-to-day and monthly expenses

Ability to retire at

the desired time

Other

All 1,019 21% 25% 7% 36% 4% 6% 0%

Intern/Entry Level/Staff 799 22% 27% 7% 33% 5% 5% 0%

Manager/Director/Executive 219 18% 19% 8% 46% 2% 7% 0%

Gen Z 77 22% 31% 6% 35% 3% 3% 0%

Gen Y or Millennials 474 25% 27% 6% 35% 4% 3% 0%

Gen X 341 19% 25% 7% 35% 6% 7% 1%

Baby Boomers 124 13% 16% 13% 40% 2% 15% 1%

HHI ≤ $150,000 672 21% 28% 8% 31% 6% 6% 0%

HHI > $150,000 278 23% 19% 6% 46% 1% 6% 0%

LEVELS OF EMPLOYEE FINANCIAL CONFIDENCE*

4% 37% 36% 22%

Slight NoneModerateExtreme

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Level of financial confidence Category Base Extremely confident Moderately confident Slightly confident Not at all confident

All 1,018 4% 37% 36% 22%

Intern/Entry Level/Staff 798 4% 35% 37% 24%

Manager/Director/Executive 219 6% 46% 33% 15%

Gen Z 77 3% 31% 38% 29%

Gen Y or Millennials 473 4% 35% 40% 21%

Gen X 341 4% 41% 33% 23%

Baby Boomers 124 7% 40% 31% 23%

HHI ≤ $150,000 672 2% 31% 40% 27%

HHI > $150,000 278 9% 49% 29% 13%

Making goals and seeking support

Most employees (81%) have put thought and effort into financial planning — having set either somewhat (50%) or clearly (31%) defined goals. Gen Z have spent the least amount of time accumulating earnings, yet they tend to outnumber other generations in developing clear financial goals (44%). Aspirations like paying off study loans, travelling and saving for their first home are likely among their motivators.

When making financial decisions, nearly three-quarters (74%) of employees don’t look for any help, while 23% seek professional validation. Just 3% rely on specific advice from professionals to help guide their decisions. An encouraging outcome of recent legislative reforms is a reduction in low-quality adviser guidance.

The activities of the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry, formed in December 2017 to investigate and report on misconduct, amplified the national conversation about potential mismanagement. This also increased public awareness — prompting more people to review their personal finances. Although the Royal Commission’s discoveries reduced employees’ trust of major banks (27%) and financial professionals such as advisers (18%), they also had a balancing effect. Some employees became more interested in understanding (15%) or proactively managing (15%) their personal finances, and 4% were encouraged to seek professional financial help.

Have clearly defined financial goals Category Base Yes Somewhat Not really Not at all

All 1,019 31% 50% 17% 2%



Gen Z 77 44% 43% 13% 0%


Gen X 341 29% 48% 19% 4%

Baby Boomers 124 37% 46% 16% 1%

HHI ≤ $150,000 672 30% 48% 19% 2%

HHI > $150,000 278 32% 52% 13% 2%

Level of professional assistance sought when making personal finance decisions

Category Base Entirely self-guided - no help

Self-guided - with professional validation

Professionally guided - based on specific advice Other

All 1,018 74% 23% 3% 1%



Gen Z 76 87% 11% 1% 1%


Gen X 341 67% 30% 2% 1%

Baby Boomers 124 69% 29% 2% 0%

HHI ≤ $150,000 671 78% 19% 2% 1%

HHI > $150,000 278 67% 29% 3% 1%




Effect of the Financial Services Royal Commission on employees

Category Base No effect

Less trust of major banks

Less trust of financial professionals (e.g.,

advisers)

Increased interest in understanding the personal impacts

Increased interest in taking a more

proactive approach to personal finances

Increased interest in seeking

professional help Other

All 1,017 45% 27% 18% 15% 15% 4% 6%

Intern/Entry Level/Staff 797 46% 27% 17% 14% 14% 3% 6%

Manager/Director/Executive 219 39% 27% 20% 18% 17% 5% 5%

Gen Z 76 58% 21% 5% 9% 8% 1% 9%

Gen Y or Millennials 473 48% 25% 15% 16% 13% 3% 6%

Gen X 341 41% 30% 22% 13% 17% 4% 5%

Baby Boomers 124 35% 31% 24% 19% 23% 7% 3%

HHI ≤ $150,000 671 46% 27% 18% 14% 15% 4% 5%

HHI > $150,000 278 43% 27% 19% 15% 15% 4% 6%

The business case for reducing financial stress

Reducing financial stress is good for the business because the pressure can distract employees — negatively affecting their wellbeing, decreasing productivity and impacting organisational wellbeing. Findings show how past and present financial stress affects employees in different areas of their lives.

The most common experiences include a negative influence on mood and demeanour (63%) and the ability to meet home or family commitments (44%). In nearly equal measure, monetary stressors also create health (37%) and relationship (36%) challenges. Internal strife caused by compounded financial woes often accompanies employees to their worksite, where it can lead to increased absenteeism as well as reduced productivity.

Most employees spend time thinking about or dealing with personal finance concerns while at work (70%). On a weekly basis, 43% spend less than 2 hours, and 28% spend 2 hours or more. Those on the longer end of the preoccupation spectrum spend 2 to 4 (15%) or more than 4 hours (5%) — and a surprising number constantly think about their personal finances (8%).

It’s tempting to assume that financial worries are largely a consequence of lower pay — but this type of stress permeates all workforce groups. In fact, 20% of employees with an HHI above $150,000 and 21% of managers, directors and executives mull over or address their personal finances at work for 2 hours or more per week. Monetary pressures can also increase work absences. Some employees say their attendance has suffered (7%) or they’ve had to take time off work specifically to resolve issues (12%).

Life priorities and commitments affected by stress now or in the past

Category Base Health Relationships Productivity at work

Attendance at work

Home and/or family

Overall mood and

demeanour Not applicable Other

All 1,014 37% 36% 22% 7% 44% 63% 12% 3%

Intern/Entry Level/Staff 794 40% 37% 23% 8% 45% 63% 12% 3%

Manager/Director/Executive 219 30% 34% 19% 5% 40% 66% 14% 0%

Gen Z 75 36% 33% 27% 12% 49% 59% 19% 3%

Gen Y or Millennials 473 38% 39% 24% 7% 42% 66% 11% 2%

Gen X 340 37% 38% 19% 8% 47% 65% 10% 3%

Baby Boomers 123 37% 25% 17% 3% 40% 53% 19% 2%

HHI ≤ $150,000 668 41% 38% 25% 8% 45% 66% 11% 3%

HHI > $150,000 277 30% 36% 15% 4% 43% 59% 16% 2%

7 in 10 EMPLOYEES SPEND TIME AT WORK ON

PERSONAL FINANCE CONCERNS EVERY WEEK

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Average time spent each week thinking about or dealing with personal finance concerns while at work Category Base None Less than 2 hours 2-4 hours 4 hours or more Constant

All 1,019 30% 43% 15% 5% 8%

Intern/Entry Level/Staff 799 30% 42% 15% 5% 9%

Manager/Director/Executive 219 31% 47% 13% 5% 3%

Gen Z 77 39% 31% 12% 6% 12%

Gen Y or Millennials 474 24% 48% 17% 4% 6%

Gen X 341 30% 45% 11% 5% 8%

Baby Boomers 124 45% 28% 15% 4% 8%

HHI ≤ $150,000 672 28% 40% 16% 6% 10%

HHI > $150,000 278 33% 48% 13% 4% 3%

Have taken time off work to deal with financial issues Category Base Yes No Don't know

All 1,018 12% 84% 4%

Intern/Entry Level/Staff 798 13% 84% 4%

Manager/Director/Executive 219 12% 86% 2%

Gen Z 77 13% 77% 10%

Gen Y or Millennials 474 9% 88% 3%

Gen X 340 16% 81% 3%

Baby Boomers 124 14% 85% 2%

HHI ≤ $150,000 671 14% 82% 4%

HHI > $150,000 278 12% 87% 1%

Sources of employee financial stress

Employees experience moderate, high or extreme stress from a multitude of sources. Unexpected costs (64%), inadequate savings (62%) and living expenses (57%) are the most common — echoing other research that suggests more than half of Australians wouldn’t be able to afford a sudden $5,000 cost.² Because employees understand that life comes with uncertainties, many want to prepare for the most important “what ifs.”

Securing sufficient superannuation and retirement funds is also troubling for many (54%). As may be expected, stress about this particular need increases with age (68% for baby boomers).

Superannuation is one of the most substantial and important benefits provided by an employer, but employees who lack financial confidence frequently don’t take advantage of this opportunity, which only increases their anxiety.

Rounding out the top five contributors to moderate, high or extreme levels of financial stress are concerns about budgeting and lifestyle affordability — each identified by 51% of employees. Recently conducted research found that about 1 in 4 Australians (27%) don’t have a budget for tracking their expenses.³

TOP SOURCES OF MODERATE TO EXTREME FINANCIAL STRESS

1Unexpected costs

and expenses

2Savings

3Living expenses

4Superannuation and

retirement

5Budget and

lifestyle (tied)




Less common stressors in the same range of intensity are more situational, and typically relate to debt. They include paying off a mortgage (34%), investment concerns (32%), qualifying for a mortgage (31%), other loans and debt (28%), and credit card issues (25%).

When the focus is narrowed to high and extreme stress levels, employee rankings of sources remain about the same with two notable exceptions — increases in mortgage qualification and decreases in budget concerns. Despite low interest rates, bank policies still make it challenging to qualify for new mortgages, and even more difficult to start investing in property.

Level of stress caused by financial issues

UNEXPECTED COSTS AND EXPENSES

Category Base Extreme High Moderate Slight None Not applicable

All 1,010 16% 23% 25% 25% 10% 0%

Intern/Entry Level/Staff 792 19% 24% 26% 22% 9% 1%

Manager/Director/Executive 217 7% 21% 20% 35% 17% 0%

Gen Z 76 24% 24% 24% 20% 9% 0%

Gen Y or Millennials 472 15% 28% 24% 23% 9% 0%

Gen X 335 15% 21% 27% 24% 13% 0%

Baby Boomers 124 19% 15% 22% 33% 10% 2%

HHI ≤ $150,000 668 22% 25% 25% 21% 7% 0%

HHI > $150,000 274 5% 19% 26% 33% 16% 0%

SAVINGS Category Base Extreme High Moderate Slight None Not applicable

All 1,006 13% 22% 27% 26% 11% 2%



Gen Z 75 19% 25% 21% 15% 19% 1%


Gen X 334 12% 22% 29% 25% 10% 2%

Baby Boomers 122 10% 18% 29% 25% 16% 3%

HHI ≤ $150,000 664 16% 24% 27% 22% 9% 2%

HHI > $150,000 275 7% 18% 28% 33% 14% 0%

LIVING EXPENSES


All 1,011 9% 18% 30% 27% 15% 0%



Gen Z 76 8% 33% 20% 24% 16% 0%


Gen X 336 9% 18% 31% 27% 16% 0%

Baby Boomers 124 9% 12% 31% 30% 17% 2%

HHI ≤ $150,000 668 12% 21% 30% 26% 11% 0%

HHI > $150,000 275 1% 14% 30% 32% 23% 0%

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Level of stress caused by financial issues (cont.)

SUPERANNUATION AND RETIREMENT


All 1,010 9% 16% 29% 25% 18% 2%



Gen Z 75 5% 17% 13% 28% 31% 5%


Gen X 339 9% 22% 33% 21% 14% 1%

Baby Boomers 124 23% 14% 31% 21% 10% 2%

HHI ≤ $150,000 664 11% 17% 28% 24% 17% 3%

HHI > $150,000 277 6% 16% 33% 27% 18% 0%

BUDGET


All 1,003 8% 11% 32% 27% 19% 3%



Gen Z 77 12% 16% 27% 30% 13% 3%


Gen X 331 8% 10% 31% 26% 22% 2%

Baby Boomers 122 3% 10% 27% 32% 22% 6%

HHI ≤ $150,000 666 10% 14% 33% 26% 15% 3%

HHI > $150,000 269 4% 9% 29% 29% 28% 2%

LIFESTYLE (E.G., HOLIDAYS)


All 1,009 7% 14% 30% 29% 17% 3%



Gen Z 76 9% 13% 34% 26% 16% 1%


Gen X 335 6% 14% 32% 28% 16% 4%

Baby Boomers 123 5% 12% 26% 32% 20% 5%

HHI ≤ $150,000 666 9% 15% 31% 29% 12% 4%

HHI > $150,000 275 3% 12% 28% 31% 26% 0%

PAYING OFF MORTGAGE


All 1,008 7% 10% 17% 16% 12% 38%



Gen Z 77 1% 9% 4% 3% 1% 82%


Gen X 336 8% 13% 19% 21% 15% 24%

Baby Boomers 123 10% 10% 20% 15% 15% 31%

HHI ≤ $150,000 665 7% 9% 16% 12% 8% 47%

HHI > $150,000 274 5% 10% 22% 22% 21% 21%




QUALIFYING FOR MORTGAGE


All 976 12% 9% 10% 8% 8% 53%



Gen Z 77 21% 17% 14% 16% 3% 30%


Gen X 320 9% 6% 6% 5% 12% 62%

Baby Boomers 113 3% 4% 5% 4% 8% 77%

HHI ≤ $150,000 645 15% 11% 13% 8% 7% 47%

HHI > $150,000 265 5% 3% 6% 7% 12% 66%

Level of stress caused by financial issues (cont.)

INVESTING


All 1,001 5% 10% 17% 24% 18% 25%



Gen Z 74 9% 11% 15% 23% 16% 26%


Gen X 333 2% 10% 21% 23% 18% 26%

Baby Boomers 122 3% 6% 13% 26% 25% 26%

HHI ≤ $150,000 660 6% 10% 15% 20% 17% 32%

HHI > $150,000 275 3% 11% 21% 34% 20% 12%

OTHER LOANS AND DEBT


All 1,002 6% 7% 15% 18% 26% 29%



Gen Z 76 1% 14% 25% 18% 16% 25%


Gen X 336 6% 6% 15% 16% 27% 30%

Baby Boomers 119 3% 7% 12% 12% 29% 37%

HHI ≤ $150,000 659 7% 9% 16% 18% 20% 30%

HHI > $150,000 276 4% 4% 10% 17% 39% 26%

CREDIT CARDS


All 1,013 6% 8% 11% 20% 33% 22%



Gen Z 77 4% 1% 5% 6% 27% 56%


Gen X 338 9% 7% 14% 23% 34% 14%

Baby Boomers 122 6% 13% 8% 21% 39% 12%

HHI ≤ $150,000 667 8% 8% 12% 18% 28% 26%

HHI > $150,000 278 3% 9% 8% 22% 45% 13%

15GALLAGHER

Key Takeaways

Most employees are slightly or moderately confident about their personal finances. In other words, they feel they have adequate funds to enjoy life, enough savings to cover unexpected expenses and/or no financial stress. And while the vast majority are working to meet their financial goals, nearly all take a self-guided approach. This finding suggests that connecting employees to helpful resources will promote their success.

It may be true that some employees aren’t experiencing financial stress, but quite a few others — across all roles, generations and income levels — say this condition has affected their physical health. Among those who worry about or deal with money-related issues at work every week, several are consumed by these concerns for two or more hours.

Covering unexpected costs, meeting living expenses and building savings are top contributors to employees’ financial stress. Other financial anxiety triggers include superannuation and retirement, which tend to increase their stress as they get closer to retirement.

Financial education tools and personalised benefits are often effective resources for improving financial wellbeing. They help employees make better sense of what can seem like conflicting or confusing information, and put the focus squarely on adopting healthy, lifelong spending and saving habits. Investing in financial confidence also makes business sense because it helps increase workforce engagement, productivity and on-time retirements.

²Finder AU, “Could you afford a $5,000 emergency expense?” May 2019 ³MyState Bank Limited, “Five ways to fast-track your savings in a low interest rate world,” July 2019


https://www.finder.com.au/would-you-afford-a-5000-emergency-expense

https://www.mystate.com.au/about-us/our-company/latest-news/details/articleid/294/five-ways-to-fast-track-your-savings-in-a-low-interest-rate-world



RetirementEven though most employees have set financial goals and are working towards them, relatively few know how much money they need to comfortably retire. And the majority are uncertain if their progress in creating a financial cushion makes their targeted retirement date realistic. More engagement in their super and guidance from finance professionals through their employer are needed.

Retirement readiness

Helping employees prepare for retirement is a bedrock component of the social contract between employers and their workforce — and serves the financial interests and future opportunities of both. About 1 in 3 employees (34%) have estimated how much money they’ll need to comfortably retire, and the likelihood of completing this assessment increases with age. However, even among baby boomers who are closest to retirement, only 6 in 10 (60%) have evaluated their retirement needs.

34%HAVE ASSESSED THE AMOUNT OF MONEY NEEDED

TO COMFORTABLY RETIRE

Roughly a third (35%) of employees are moderately (26%) or highly (9%) confident they’re on track to retire at their planned retirement age with the assets they desire. Among the rest, 29% have either low or no confidence that their progress towards realising these targets is enough — and 37% have no idea when retirement is reasonable and how much to save. While the low-confidence segment (21%) have not taken any steps in the right direction, they plan to break that inertia. Those with no confidence (8%) have not taken any steps or their actions failed to produce the intended results.

A workforce evaluation can shed light on a lack of retirement readiness within a specific demographic and helps to identify particular stressors among that population. For example, nearly half of homeowners aged 55 to 64 are still paying off a mortgage in 2019 compared to 14% three decades earlier.⁴ And within this same age range, the likelihood that pre-retirees with mortgage debt will stay in the workforce increases by 18% for every $100,000 owed.⁵ These findings suggest that customised outreach programs and communications — that more precisely target employees based on their needs — could be effective solutions for increasing financial confidence.

Employees have assessed how much money they need to retire comfortably

Category Base Yes No

All 1,011 34% 66%

Intern/Entry Level/Staff 792 30% 70%

Manager/Director/Executive 218 48% 52%

Gen Z 75 15% 85%

Gen Y or Millennials 472 25% 75%

Gen X 338 40% 60%

Baby Boomers 123 60% 40%

HHI ≤ $150,000 667 28% 72%

HHI > $150,000 277 44% 56%

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Employees’ level of confidence that they’re on track for their planned retirement age and assets

Category Base High - all is going well

Moderate - actively taking steps to get closer

Low - haven't taken any steps but plan to do so

No idea - don't know how much to save or when

retirement is reasonable

None - haven't taken any steps or those actions are failing

All 1,019 9% 26% 21% 37% 8%



Gen Z 77 3% 9% 8% 70% 10%


Gen X 341 12% 31% 24% 25% 9%

Baby Boomers 124 17% 40% 15% 18% 10%

HHI ≤ $150,000 672 6% 21% 21% 41% 11%

HHI > $150,000 278 14% 35% 17% 29% 4%

Retirement goals and superannuation (super) status

Nearly 9 in 10 employees ranked the attainment of four common financial goals for retirement as highly or extremely important. They include the affordability of unexpected expenses (93%), coverage of day-to-day costs (91%), property ownership (88%) and coverage of healthcare costs (88%). Comparatively, 63% assigned the same degree of importance to the affordability of leisure and lifestyle expenses, such as travel.

Despite a widely shared and strong emphasis on attaining a financially comfortable retirement, most employees aren’t proactively monitoring their super status to ensure their goals remain realistic. They typically check on this status a couple of times a year (41%), but a sizeable number (31%) forgo active involvement in building their savings altogether — opting to “set it and forget it.”

For the most part, there’s little difference in super fund involvement based on income or role. One exception applies to those whose HHI is more than $150,000. They’re 10 percentage points less likely to set and forget their super status, and 10 points more likely to check it. The tendency to set and forget decreases along the generational strata from Gen Z (44%) to baby boomers (17%). Even when employees are participating in a default plan, they need to adjust their individual accounts to suit changes in their personal circumstances and goals. Those who take a passive approach may not be aware of their risk and opportunity costs.

Level of importance placed on meeting common retirement goals

AFFORDABILITY OF UNEXPECTED EXPENSES

Category Base Extreme High Moderate Slight None

All 1,017 60% 33% 5% 1% 0%



Gen Z 77 74% 19% 5% 1% 0%


Gen X 340 58% 34% 6% 2% 0%

Baby Boomers 124 58% 33% 7% 1% 1%

HHI ≤ $150,000 672 60% 33% 5% 2% 0%

HHI > $150,000 277 60% 35% 5% 0% 0%

31% TAKE A "SET IT AND FORGET IT" APPROACH

TO THEIR SUPER




Level of importance placed on meeting common retirement goals (cont.)

COVERAGE OF DAY-TO-DAY COSTS


All 1,016 61% 30% 8% 1% 0%



Gen Z 77 69% 23% 6% 1% 0%


Gen X 341 59% 33% 7% 1% 0%

Baby Boomers 124 56% 33% 9% 1% 1%

HHI ≤ $150,000 670 61% 30% 9% 0% 0%

HHI > $150,000 278 62% 31% 6% 1% 0%

PROPERTY OWNERSHIP


All 1,017 68% 20% 7% 3% 2%



Gen Z 77 71% 19% 8% 1% 0%


Gen X 341 65% 22% 9% 4% 1%

Baby Boomers 124 69% 15% 4% 3% 8%

HHI ≤ $150,000 671 67% 20% 7% 3% 3%

HHI > $150,000 278 69% 21% 6% 2% 1%

COVERAGE OF HEALTHCARE COSTS


All 1,016 61% 27% 9% 2% 0%



Gen Z 77 70% 22% 5% 3% 0%


Gen X 340 58% 29% 9% 3% 0%

Baby Boomers 124 60% 25% 10% 4% 2%

HHI ≤ $150,000 671 61% 27% 9% 3% 0%

HHI > $150,000 277 61% 29% 8% 3% 0%

AFFORDABILITY OF LEISURE AND LIFESTYLE EXPENSES (E.G., TRAVEL)


All 1,015 33% 30% 29% 8% 1%



Gen Z 77 39% 29% 25% 8% 0%


Gen X 339 31% 32% 27% 10% 0%

Baby Boomers 124 35% 25% 31% 8% 2%

HHI ≤ $150,000 669 30% 29% 31% 9% 1%

HHI > $150,000 278 34% 34% 26% 5% 1%

19GALLAGHER

Level of employees’ engagement with their super

Category Base None — set and forget Moderate — check a couple times a year

Active — check every few months High — actively check Not applicable — don’t

know what a super is

All 1,010 31% 41% 18% 9% 2%



Gen Z 77 44% 36% 14% 3% 3%


Gen X 340 28% 41% 21% 9% 1%

Baby Boomers 123 17% 40% 25% 17% 1%

HHI ≤ $150,000 668 35% 41% 16% 6% 2%

HHI > $150,000 274 25% 41% 20% 14% 0%

Key Takeaways

Limited engagement with super funds and minimal use of financial advisers — combined with lower levels of confidence about financial readiness for retirement — suggest that many employees are frozen by uncertainty. Not knowing how to address their financial future, they decide to do little or nothing.

Increasing employees’ confidence and commitment to their financial future requires employers to regularly review plan design, participation and outcomes. Regular evaluation of employer superannuation plans can help ensure an appropriate selection to meet employee needs. Employers should designate individuals or a committee to review the retirement plan and its investment options and determine reasonable plan performance and fees.

In addition, programs are available that periodically measure, score and evaluate superannuation activity for individual employees, and recommend resources to specific populations based on shared needs. Employers can assess the value of their investments over time, and adjust them for better performance as needed.

⁴ABC News, “Mortgage debt causing older Australians distress and worsening mental health,” August 2019 ⁵ABC News, “Australians are working longer so they can pay off their mortgage debt,” June 2017


https://www.abc.net.au/news/2019-08-27/mortgage-debt-causing-older-australians-distress-study-finds/11450958

https://www.abc.net.au/news/2017-06-30/australians-working-longer-to-pay-off-their-growing-mortage-debt/8667672



Financial Wellbeing As a Benefits FocusPersonal financial health affects physical and emotional health — and the focus and energy employees invest in their jobs every day. It’s an essential part of their total wellbeing that drives the sustained wellbeing of the organisation. For this reason, cost-effectively cultivating employee financial confidence is an investment in a better future for all.

Taking an integrated approach to meeting employee needs and preferences

About two-thirds (67%) of Australian employees are quite satisfied with their current jobs — characterising their happiness as either moderate (48%) or extreme (19%). An additional 17% are neither happy nor unhappy, while the 13% with more pronounced misgivings count themselves as moderately (11%) or extremely (2%) unhappy. The inherent challenge of this good news for talent retention is tougher talent attraction.

Yet, this is a situation where an integrated approach to supporting employees’ physical and emotional health, career interests — and financial needs — becomes vital. By making a well-rounded, compelling bid to attract highly qualified talent, employers signal a commitment to providing an exceptional employee experience.

67%REPORT MODERATE TO EXTREME HAPPINESS

WITH THEIR JOB

Level of job satisfaction

Category Base Extremely happy Moderately happy Neither happy nor unhappy Moderately unhappy

Extremely unhappy Prefer not to say

All 996 19% 48% 17% 11% 2% 3%



Gen Z 75 24% 47% 15% 8% 5% 1%


Gen X 336 15% 52% 16% 12% 2% 3%

Baby Boomers 120 28% 39% 18% 10% 3% 3%

HHI ≤ $150,000 657 18% 48% 19% 10% 3% 3%

HHI > $150,000 273 21% 50% 12% 12% 1% 3%

Employee priorities for non-financial aspects of total wellbeing

A greater sense of career wellbeing is tied to stronger employee engagement. Overall, the workforce values employer support for career progression and leadership training and education over other benefits. In fact, 85% and 81%, respectively, rate them as highly or extremely important. Almost all Gen Z employees (94%) assign this priority level to career progression, and rankings gradually decrease as age increases.

Interns, entry-level employees and staff more highly value fitness programs (55%) and other physical wellbeing initiatives than managers and executives do (45%). These benefits are also prized to a greater extent by younger generations compared to their Gen X or baby boomer counterparts.

Overall, more than half (52%) of employees consider access to employer-provided discounts and rewards either highly or extremely important. These popular perks can stretch employee dollars farther at little or no cost to the organisation.

Many organisations see their communities as a significant influence on their business success and their employees’ wellbeing. Likewise, they feel a sense of duty to give back. Overall, 4 in 10 (40%) employees rank community and charity initiatives as highly or extremely important, with millennials (46%) and Gen Z employees (43%) expressing the greatest enthusiasm.

21GALLAGHER

Level of importance placed on employer’s support for confidence initiatives

CAREER PROGRESSION


All 996 54% 31% 9% 3% 3%



Gen Z 75 65% 29% 3% 0% 3%


Gen X 335 44% 39% 11% 4% 2%

Baby Boomers 119 36% 28% 19% 7% 10%

HHI ≤ $150,000 656 57% 29% 9% 3% 2%

HHI > $150,000 273 48% 37% 9% 4% 3%

LEADERSHIP TRAINING AND EDUCATION


All 993 45% 36% 13% 3% 3%



Gen Z 75 45% 40% 12% 1% 1%


Gen X 333 41% 40% 14% 4% 2%

Baby Boomers 120 33% 31% 18% 7% 11%

HHI ≤ $150,000 655 47% 34% 14% 4% 2%

HHI > $150,000 271 42% 41% 11% 3% 3%

MOST DESIRED EMPLOYER SUPPORT

Career progression

Leadership training and development

Access to discounts and rewards

Community and charity initiatives

Subsidised private health

Fitness programs and physical wellbeing

SUBSIDISED PRIVATE HEALTH


All 994 36% 32% 20% 7% 6%



Gen Z 74 35% 30% 20% 11% 4%


Gen X 334 32% 35% 22% 5% 6%

Baby Boomers 120 33% 35% 16% 5% 11%

HHI ≤ $150,000 654 38% 31% 19% 6% 5%

HHI > $150,000 272 31% 35% 21% 8% 6%




Level of importance placed on employer’s support for confidence initiatives (cont.)

FITNESS PROGRAMS AND PHYSICAL WELLBEING


All 994 22% 30% 30% 11% 6%



Gen Z 74 30% 31% 22% 12% 5%


Gen X 335 15% 30% 38% 11% 6%

Baby Boomers 120 16% 28% 32% 13% 12%

HHI ≤ $150,000 654 24% 31% 28% 11% 6%

HHI > $150,000 272 19% 30% 35% 11% 6%

ACCESS TO DISCOUNTS AND REWARDS


All 993 28% 24% 26% 13% 9%



Gen Z 74 28% 32% 22% 15% 3%


Gen X 333 22% 24% 31% 14% 10%

Baby Boomers 120 24% 25% 23% 21% 8%

HHI ≤ $150,000 654 31% 23% 26% 12% 8%

HHI > $150,000 271 20% 25% 27% 17% 10%

COMMUNITY AND CHARITY INITIATIVES


All 989 14% 26% 33% 19% 7%



Gen Z 74 15% 28% 31% 20% 5%


Gen X 334 10% 26% 37% 20% 7%

Baby Boomers 119 8% 19% 37% 23% 13%

HHI ≤ $150,000 652 15% 25% 35% 18% 8%

HHI > $150,000 271 10% 32% 30% 23% 6%

23GALLAGHER

Awareness of financial wellbeing initiatives

When employees compare the value of financial confidence benefits across organisations, they view their own as equal to or greater than others (17%) and less than others (19%) at similar rates. Yet most (65%) don’t know how they differ. This finding underscores the need to broadly communicate and effectively convey to employees the lasting value of education and other financial confidence opportunities.

Relatively low-cost educational programs and other resources can help employees develop skills that become trusted tools for building long-term financial wellbeing. Employers often evaluate the competitive strength of their financial confidence benefits using external benchmarks. However, best practices for getting the greatest return on investment include tracking and measuring results, and then making adjustments based on findings. Employee feedback should be factored in as part of this process.

Most employees (53%) recognise their company’s super fund as an employer financial wellbeing initiative. Knowledge of other financial confidence benefits, and possibly their availability, appears to be considerably lower.

Few employees report access to company-paid insurance (11%), one-to-one consultations (9%), a super engagement plan (8%), financial literacy programs (7%), executive personal advice (3%) or budgeting tools (2%). Notably, 47% confirmed they aren’t aware of the financial wellbeing initiatives their employer offers.

Almost three-quarters (74%) of employees say their employer’s financial confidence initiatives did not produce any improvements in personal finances. Low rates of better outcomes were reported for retirement preparation (9%), a greater feeling of security and protection from insurance (6%), increased savings towards major goals (5%), debt payoff (4%), better investment and asset management (3%), and spending control (3%).

Perceived strength of financial confidence initiatives compared to other organisations

Category Base High - better than others Even - on par with others Low - below others, but do offer some value

Extremely low - below others, and don't offer anything of value Don't know

All 994 6% 11% 10% 9% 65%



Gen Z 74 8% 8% 4% 9% 70%


Gen X 335 5% 13% 10% 8% 63%

Baby Boomers 120 5% 8% 4% 11% 72%

HHI ≤ $150,000 655 5% 10% 8% 8% 69%

HHI > $150,000 272 8% 12% 13% 10% 57%

47%AREN’T AWARE OF THEIR EMPLOYER’S FINANCIAL

WELLBEING INITIATIVES

Financial wellbeing initiatives available through the employer

Category Base Company super fund

Company paid

insurances

Executive personal

advice

Financial literacy programs (e.g.,

seminars on basic finance)

Budgeting tools (e.g.,

apps or calculators)

Super engagement

plan

One-to-one consultations Other Don't

know

All 985 53% 11% 3% 7% 2% 8% 9% 3% 47%

Intern/Entry Level/Staff 778 52% 9% 3% 7% 2% 7% 7% 3% 50%

Manager/Director/Executive 206 57% 17% 3% 9% 2% 11% 15% 5% 36%

Gen Z 75 44% 5% 4% 1% 1% 5% 4% 1% 65%

Gen Y or Millennials 456 52% 11% 4% 7% 2% 6% 8% 3% 50%

Gen X 332 52% 12% 3% 9% 3% 11% 11% 4% 43%

Baby Boomers 119 66% 8% 0% 5% 1% 8% 9% 3% 37%

HHI ≤ $150,000 651 53% 9% 3% 6% 2% 7% 7% 3% 49%

HHI > $150,000 266 53% 16% 4% 11% 2% 11% 15% 3% 44%




Financial improvements employees have experienced related to their employer’s confidence initiatives

Category BaseBetter

spending control

Retirement preparation

Debt payoff

Increased savings towards achieving

major goals

Better investment and asset

management

Increased feeling of security and protection

from insuranceOther None

All 979 3% 9% 4% 5% 3% 6% 3% 74%

Intern/Entry Level/Staff 769 4% 9% 4% 6% 3% 5% 4% 74%

Manager/Director/Executive 209 1% 9% 4% 4% 4% 8% 2% 76%

Gen Z 117 0% 11% 2% 3% 3% 5% 2% 80%

Gen Y or Millennials 327 2% 11% 3% 3% 2% 6% 2% 76%

Gen X 460 5% 8% 5% 7% 4% 6% 3% 72%

Baby Boomers 73 8% 7% 10% 10% 3% 5% 8% 70%

HHI ≤ $150,000 648 4% 9% 5% 6% 3% 4% 3% 75%

HHI > $150,000 266 2% 12% 3% 5% 4% 9% 2% 74%

Interest in employer-supported financial initiatives

Just 28% of employees believe their employer supports the development of their financial confidence. This segment includes 9% with access to specific resources, and 19% who would like improvements to the basic help that’s already available. Among the nearly three-quarters (72%) who don’t think their employer assists them with financial confidence development, 33% don’t expect this support but 39% would find it worthwhile.

Overall, more than a third of employees regard the financial wellbeing initiatives surveyed as extremely or highly important. And that segment nearly doubles when combined with the number of employees who have a moderate interest. Benefits that align with the interests of specific populations will resonate the most.

Believe their employer supports them in developing financial confidence Category Base No - and it's not expected No - but it would be helpful Yes - there's basic help but more would be better Yes - initiatives are in place

All 993 33% 39% 19% 9%



Gen Z 74 35% 36% 16% 12%


Gen X 335 34% 39% 18% 10%

Baby Boomers 118 39% 41% 16% 4%

HHI ≤ $150,000 653 32% 44% 18% 7%

HHI > $150,000 274 34% 29% 23% 14%

58%SAY MORE SUPPORT FROM THEIR

EMPLOYER WOULD BE HELPFUL IN DEVELOPING THEIR FINANCIAL CONFIDENCE

25GALLAGHER

Emphasis on insurance and super plans

Company-paid insurance is the most important benefit to all generations (60%) — which may surprise some employers. In a recent survey, only 29% of employers ranked this type of financial protection among their employee’s top preferences.⁶

Changes to tax rules have all but eliminated employer-sponsored insurance coverage for death and permanent disability, apart from corporate super funds. And employees who have left their fund at a previous employer may not recognise the value they’re losing. Financial education that focuses on the advantages of employee participation in the corporate super fund can increase enrolment — facilitating access to more discounts and superior insurance.

Engaging employees with a self-managed super fund is another opportunity for employers. These employees, especially high income earners, may be drawn to the enhanced flexibility this option provides — but they miss out on insurance offered through corporate plans. They also often incur greater expenses. However, income protection that’s subsidised or paid by the employer can be offered outside of super funds. And organisations are free to make these plans widely available to their workforce, even including employees whose super funds were left with their previous employer.

Company super funds rank second overall among the financial wellbeing programs that employees value the most (49%). Predictably, their importance among the workforce increases with age. Gen X and baby boomer employees set this priority at number two, while Gen Z places it at number seven.

Younger employees and those in staff-level roles are more interested in education and other resources that help them manage their daily spending effectively. Roughly half of Gen Z (54%), millennial (49%) and entry-level or staff employees (47%) are highly or extremely interested in improving their personal finance knowledge and skills. Budgeting tools like apps or calculators fall within this range of elevated importance for 37% overall — especially Gen Z (50%), employees whose HHI is below $150,000 (41%), and those in an entry-level or staff position (39%).

Level of importance placed on financial confidence initiatives

COMPANY-PAID INSURANCE


All 968 28% 32% 22% 10% 9%



Gen Z 72 21% 36% 22% 13% 8%


Gen X 327 25% 34% 24% 10% 8%

Baby Boomers 114 32% 35% 14% 7% 12%

HHI ≤ $150,000 639 28% 33% 22% 9% 7%

HHI > $150,000 266 27% 28% 22% 13% 11%

COMPANY SUPER FUND


All 977 27% 22% 21% 11% 19%



Gen Z 74 19% 20% 30% 16% 15%


Gen X 326 26% 26% 19% 10% 17%

Baby Boomers 118 43% 21% 14% 8% 13%

HHI ≤ $150,000 640 28% 24% 23% 10% 16%

HHI > $150,000 270 22% 21% 20% 11% 26%

Better education on different aspects of finance3

Company super fund2

Company-paid insurance1

MOST DESIRED FINANCIAL CONFIDENCE INITIATIVES

Access to financial technology

Super engagement plan

5

4




Level of importance placed on financial confidence initiatives (cont.)

BETTER EDUCATION ON DIFFERENT ASPECTS OF FINANCE


All 971 16% 30% 28% 16% 10%



Gen Z 74 20% 34% 22% 16% 8%


Gen X 325 11% 31% 29% 19% 10%

Baby Boomers 113 12% 24% 28% 20% 15%

HHI ≤ $150,000 639 17% 30% 29% 15% 9%

HHI > $150,000 267 12% 30% 26% 20% 12%

SUPER ENGAGEMENT PLAN


All 968 15% 31% 30% 14% 10%



Gen Z 73 12% 29% 33% 21% 5%


Gen X 321 14% 31% 32% 13% 9%

Baby Boomers 115 15% 32% 23% 15% 16%

HHI ≤ $150,000 638 16% 32% 31% 13% 9%

HHI > $150,000 265 13% 29% 31% 15% 13%

ACCESS TO FINANCIAL TECHNOLOGY


All 962 14% 28% 31% 16% 11%



Gen Z 73 16% 27% 30% 16% 10%


Gen X 322 11% 27% 34% 17% 11%

Baby Boomers 112 13% 25% 28% 19% 16%

HHI ≤ $150,000 630 15% 27% 34% 15% 9%

HHI > $150,000 267 9% 30% 26% 21% 14%

27GALLAGHER


ONE-ON-ONE CONSULTATIONS


All 974 14% 26% 29% 18% 14%



Gen Z 74 14% 20% 31% 26% 9%


Gen X 322 11% 30% 30% 16% 13%

Baby Boomers 118 14% 29% 22% 16% 19%

HHI ≤ $150,000 639 16% 25% 28% 19% 13%

HHI > $150,000 268 10% 27% 31% 16% 16%

FINANCIAL LITERACY PROGRAMS (E.G., SEMINARS ON BASIC FINANCE)


All 970 13% 26% 29% 20% 13%



Gen Z 74 20% 27% 27% 22% 4%


Gen X 323 9% 26% 31% 20% 14%

Baby Boomers 114 9% 31% 22% 25% 14%

HHI ≤ $150,000 637 14% 26% 29% 19% 11%

HHI > $150,000 268 9% 27% 28% 22% 15%

BUDGETING TOOLS (E.G., APPS OR CALCULATORS)


All 969 13% 24% 29% 20% 14%



Gen Z 74 19% 31% 24% 15% 11%


Gen X 325 10% 22% 31% 21% 15%

Baby Boomers 112 9% 25% 27% 19% 21%

HHI ≤ $150,000 638 13% 28% 29% 18% 12%

HHI > $150,000 266 11% 18% 29% 21% 21%





REGULAR UPDATES ON FINANCIAL TRENDS AND NEWS


All 966 12% 23% 29% 21% 15%



Gen Z 73 16% 23% 22% 25% 14%


Gen X 324 9% 25% 29% 22% 15%

Baby Boomers 114 15% 25% 22% 25% 13%

HHI ≤ $150,000 636 14% 23% 29% 20% 14%

HHI > $150,000 265 8% 22% 30% 24% 15%

EXECUTIVE PERSONAL ADVICE


All 962 10% 23% 31% 18% 18%



Gen Z 73 12% 22% 34% 19% 12%


Gen X 320 8% 24% 32% 17% 19%

Baby Boomers 113 5% 25% 26% 19% 25%

HHI ≤ $150,000 630 10% 24% 32% 17% 16%

HHI > $150,000 267 10% 22% 30% 19% 19%

Key Takeaways

Providing resources for financial literacy lays the groundwork for better financial decisions, wellbeing and resiliency. When employees have made poor financial decisions in the past, they may struggle to do better in the present and future. Many don’t have the knowledge needed to make astute choices about spending, saving and debt management.

Financial confidence initiatives have great potential to produce meaningful advantages for employees. Research shows that employees who were repeat users of related workplace programs had higher overall financial wellbeing, were better prepared for retirement, managed their cash flow more effectively and were more comfortable with their debt levels.⁷

⁶Gallagher research on employer financial confidence, September 2019 ⁷Forbes, “The 6 Best Ways To Use Your Financial Wellness Benefit At Work,” April 2017

https://www.forbes.com/sites/financialfinesse/2017/04/06/he-6-best-ways-to-use-your-financial-wellness-benefit-at-work/

29GALLAGHER

Final RemarksSimple ideas can make a big difference when it comes to engaging employees in financial confidence initiatives. Enlisting employees to serve as ambassadors who explain and endorse the potential value of available programs and other resources often reduces reluctance to participation — and strengthens receptivity to related communication.

Program examples include short sessions addressing a variety of financial literacy elements, such as wills and estate planning, insurance benefits, superannuation fund status, and taking out a mortgage. These topic introductions may provide just enough information and motivation for employees to schedule time with a professional for personalised advice.

Another opportunity is making access to financial professionals easier, possibly at the worksite during working hours. Employers can also capitalise on current events to capture attention. For instance, the legislated tax cuts will generate additional refunds for nearly 10 million Australians. Employees may be interested in options to better utilise these funds.

Education on the safety net and specific value provided by financial confidence programs and services is essential for motivating employees to participate. They need to understand that their organisation’s super, insurance coverage and discounted support options are powerful assets for creating risk protection — and stretching the value of their earnings.

In general, education is a powerful change agent that succeeds on the effectiveness of employee communication. Employees aren’t always aware of the learning options that are available to them, but multiple tools, including advanced technologies for evaluating the workforce, can help employers assess and address any gaps. Expanding workforce communication touchpoints may be required to meet saturation targets.

Offering a variety of resources that cover a range of needs and interests not only boosts employees’ financial confidence, but also the competitive strength of the entire compensation and benefits package. By better engaging employees, these solutions also help mitigate the cost of productivity losses.




ContributorsSOLUTIONS ADVISORY AND DEVELOPMENT

James Allen, BPsycSc, Ph.D.

Founder and Director

Effectus Consulting

Tapel Cafer

Head of Personal Solutions

Gallagher Australia

[email protected]

Graham Campbell

Chief Executive Officer

Gallagher Australia

[email protected]

Jamie Levitt

Corporate Solutions Manager

Gallagher Australia

[email protected]

SURVEY DESIGN, ANALYSIS AND REPORTING

Michelle Barrett

Senior Survey Analyst

Gallagher Research & Insights

[email protected]

Stephanie Bauman

Senior Vice President


[email protected]

Thomas Cummins, CCP

Managing Director


[email protected]

Stacy Silkaitis

Director, Global Publications


[email protected]

Cindy Stearns

Senior Editor, Global Publications


[email protected]

mailto:[email protected]

31GALLAGHER

About GallagherBetter. It’s something all companies strive for. Better outcomes from better performance. But how do you get there?

You start by building a better workplace. One that attracts, engages and retains top talent. What does that look like? It’s a workplace where people feel they belong — where there’s a sense of developing a career instead of punching a clock. And a culture of opportunity that draws new talent because it inspires employees to deliver their personal and professional best.

Gallagher Better WorksSM — a comprehensive approach to benefits, compensation, retirement, employee communication and workplace culture — aligns your human capital strategy with your overall business goals. It centres on the full spectrum of organisational wellbeing, strategically investing in your people’s health, talent, financial security and career growth. And developing benefit and HR programs at the right cost structures to support a multigenerational workforce.

From evaluating the demographics of your workforce to surveying and analysing competitor trends, Gallagher helps you gather new insights and apply best practices that promote productivity and growth. A data-driven focus allows you to continually improve. That’s what it means to create a better workplace culture. It’s about never being content to rest each time you reach your best. Your better is never finished.

As you develop and sustain this destination workplace culture, your people can thrive and perform at a higher level — optimising your annual talent investment and mitigating organisational risk to maximise your profitability. Best of all, you gain confidence in your organisation's future with a competitive advantage as a workplace that simply works better.

Arthur J. Gallagher & Co. (NYSE: AJG), an international insurance brokerage and risk management services firm, is headquartered in Rolling Meadows, Illinois, has operations in 48 countries and offers client-service capabilities in more than 150 countries around the world through a network of correspondent brokers and consultants.



Terms of Use

The intent of this Survey is to provide you with general information regarding current practice within the employee benefits environment. The data does not constitute recommendations or other advice regarding employee benefit programs, and the user is in no way obligated to accept or implement any information for use within their organisation(s). The decision to utilise any information provided rests solely with the user, and application of the data contained does not guarantee compliance with applicable laws or regulations regarding employee benefits. Information provided by the Survey, even if generally applicable, cannot possibly take into account all of the various factors that may affect a specific individual or situation. Additionally, practices described within the Survey should not be construed as, nor are they intended to provide, legal advice.

The Web Site and the Content do not constitute accounting, consulting, investment, insurance, legal, tax or any other type of professional advice, and should be used only in conjunction with the services of a Gallagher consultant and any other appropriate professional advisers who have full knowledge of the user’s situation.

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Documents

Employee Financial Confidence Report€¦ · GEN X BABY BOOMERS . 8%. GEN Z . CURRENT FAMILY COMPOSITION Married with kids . Single, living alone Other. ... emotional, social and