One size has never fitted all

A lot has changed over the years and the future of employee benefits will likely incorporate different levels of product flexibility for different needs.

With this in mind, FAnews, in partnership with Momentum Corporate, hosted a breakfast discussion at the Hyatt Regency in Rosebank where changing workforce trends and the power of social media on business success were discussed.

A generational filter

“Few South African employers have adapted to the ever-shifting landscape, with many offering the same benefits to employees today that they did five years ago,” said Nashalin Portrag, Marketing Actuary at Momentum Corporate.

Findings from Momentum Corporate’s research and data analytics, based on employees who have employer-provided benefits with Momentum Corporate, reveal a few interesting trends in the employee benefits space. 

“We used a generational filter to segment employees and to understand behaviours, preferences, priorities and decision-making. The current workforce is representative of five generations; the Silent Generation (1928 – 1945), Baby Boomers (1946 – 1964), Generation X (1965 – 1980), Generation Y (Millennials) born between 1981 to 1996 and Generation Z, born after 1996,” continued Portrag. 

Trends in the EB space

“In 2013, 39% of our members consisted of Millennials. Five years later, this number has grown to 52% Millennials. Generation Z has now entered the workforce. It is expected that by 2020, Generations Z will make up 24% of the workforce. The average number of dependants per employee has also doubled over the past five years. This highlights the important role financial advisers play in ensuring EB solutions are appropriate for a diverse workforce,” said Portrag.

“When looking at salaries, Gen Z salary increases are highest at 20.9% per annum. This could be due to an improvement in the level of skills this generation has, resulting in higher starting salaries. The average salary of Gen Z exceeds that of the Silent Generation,” he added.

According to Portrag, employee benefits have not changed. “There is a slight increase in death benefits, but largely still the same employee benefits. How can employers, trustees and advisers respond to the changing demographics of employees?” asked Portrag.

Into the psyche of consumers

According to the Momentum/Unisa Consumer Financial Vulnerability Index (CFVI), changes in tax, inflation, fuel and interest rates negatively influence consumers’ financial situation and their financial vulnerability.

“This research revealed that debt repayments make up a cardinal part of monthly household expenses. Although savings is recognised as being important, many do not save because they do not have enough cash left to save, are not making ends meet, and do not have funds left at the end of each month,” added Portrag.

“Most employees struggle to balance their long-term and short-term needs. Their take home pay is more important than benefits. This creates insurance and retirement gaps which just shifts their vulnerabilities into the future,” continued Portrag.

“Employees also do not anticipate becoming disabled and the financial implication that comes with being disabled. Based on our member base, life cover and funeral cover is the most common type insurance bought. People also don’t see their retirement savings as an investment, for most employed South Africans it is their only investment,” he added.

Understand employees’ needs

“The main objective is to understand employees’ needs at each major life event that influences their journey to success. Millennials, for example, change jobs every three years compared to the silent generation that are more likely to have one employer throughout their career. All of these influences and factors impact the needs of employees,” he added.

“Financial services providers and advisers have to partner to find a balance between the stability of products and remaining relevant to the needs of a workforce who are living their lives in a substantially different way. One size has never fitted all, and it definitely is not going to in future. Tackle low engagement levels head on by educating clients about the future, keep it relevant and to the point, make it inspiring and fun, give choices, make it easy, simplify the language, make it unique and personal,” concluded Portrag.

Engaging and building relationships

Speaking of engagement, Tim Slatter, Director of timslatter.com talked about the power of social media to build relationships and how to strategically leverage off the spaces available to you.

“Branding is all about creating a perception that is reinforced by an experience of value. For financial advisers, prospects will first encounter their personal brand through their current clients (word of mouth referrals) and then their online brand - this is where their perceptions of the adviser will begin. They will, upon being advised to contact the adviser, go onto Google, Facebook and LinkedIn. They will embark on the journey that I call 'know, like & trust' - they will try to get to know as much about this financial adviser as possible to start to form an opinion about whether they know enough to start liking them. If they decide to start liking the adviser, they will get in touch,” said Slatter.

“This is when the experience of value is either reinforced or destroyed forever. If there is a misalignment of the perception of value, and the experience of value, the personal brand of the financial adviser will be a poor one and both the growth and sustainability of their practice will be compromised. This is why personal branding is so important,” he emphasised.

Tips for advisers in the EB space

“In the EB space, an adviser can leverage his or her online brand and communication strategy to help each and every one of those clients feel acknowledged and engage with their own personal financial plan,” continued Slatter.

“Our experience has shown that financial advisers who have a monthly newsletter that is personalised (addressed to each individual client), offers several points of clickable value (blogs and website) and openly communicates the adviser's availability and approachability, significantly adds to the sustainability of their practice and enhances the value of word-of-mouth referrals,” he said.

“Of all the social media platforms available, once your website, blogs and newsletter are in place, LinkedIn is the number one place to engage and be active,” he added.

“The next step is to improve your value proposition by having deeper conversations  (and asking better questions) with your clients. When an adviser is able to access deeper levels of trust with their clients, their personal brand and the value experienced by their clients increases exponentially,” concluded Slatter. 

Editor’s Thoughts:
Behaviours, preferences, priorities and decision making differs significantly across generations, so it is critical that employee benefits providers understand the differences between generations and deliver service experiences and engagement that creates value in the eyes of these clients. Please comment below, interact with us on Twitter at @fanews_online or email me your thoughts mailto:myra@fanews.co.za.