Millennials are redefining the working environment, placing a bigger emphasis on tech and innovation, flexibility and rewards that aren’t only about remuneration. Experts predict that by 2020, millennials will make up 35% of the global workforce. It makes sense then that business owners consider how their employee benefits need to change in order to attract and retain talent.
A retirement savings option that is efficient, cost-effective and underpinned by technology will be key to attracting millennials in the coming years.
Umbrella funds are a great option for employers who are looking for a retirement savings solution that suits everyone in the office. They club together multiple businesses in a single fund with standardised rules and a single board of trustees, thereby making them an efficient and cost-effective retirement savings solution.
Umbrella funds have traditionally had a reputation for high costs, opaqueness and complexity. But, this is changing, with new market entrants prioritising the use of technology to offer a better, more transparent product and superior service to redefine the South African umbrella fund offering. This is positive news for not only the retirement industry, but also employers.
With millennials being dubbed as more tech-savvy than the ‘baby boomers’, they will begin to look for benefits that will fit into their fast-paced life. Employers that are able to offer a retirement savings benefit that utilises this, will be well placed to attract millennial talent to their workforce.
Millennials value information and options related to their benefits, especially via digital platforms. It is critical therefore that employers look at options that give millennials a more engaging experience. Retirement savings benefits that prioritise employees having access to their own secure online account via portals, as well as fee transparency and regular, clear communication, will become key in the coming years.
Millennials have been touted as being uninterested in workplace benefits that place an emphasis on saving for retirement, but this is not quite accurate.
Data shows that millennials are prioritising retirement savings and are attracted to employers who are able to offer a benefit linked to retirement. A 2016 report by US-based Fidelity Investments found that millennials increased their retirement savings rate from 5.8% to 7.5%, a bigger increase than any other generation, between 2013 and 2015.
Furthermore, an international study conducted with over 19 000 working millennials across 25 countries found that security was the second highest priority at 87% for millennials searching for a job.
A retirement saving benefit that is cost-effective, such as an umbrella fund, is a way of offering security to the millennial employee without breaking the bank – for both employer and employee. As millennials become savvier about saving for retirement and look to employers to offer benefits that match their needs, it is critical that employers look at their employee benefits offering to ensure that they remain relevant in attracting talent, to ensure the continued success of their business.