In a recent study conducted by consultancy firm Morneau Shepell, just 24 per cent of employees said they would not be financially prepared for retirement – a figure which sharply contrasts the 51 per cent of employers who said the same.
“The gap between employers and employees is more of a knowledge and tool gap than anything else,” says Paula Allen, vice president of research and integrative solutions for Morneau Shepell.
Allen told HRM that employers should be invested in educating their employees and ensuring they’re financially prepared for retirement – not only for the benefit of workers, but also for the sake of the company.
“It makes sense for employers to be active in this education for two reasons,” she stressed. “One is fiduciary responsibility when the employee-employer responsibility is changing or dissolving, along with the associated supports, as it does at the point of retirement.”
The second, she says, comes down to corporate reputation.
“No employer would want people who identify themselves as retirees of their company to be in dire straits,” she told HRM. “It is not a good message for current and potential employees or corporate reputation in the community.”
Employers are particularly concerned about how workers will be able to deal with a health crisis in retirement and 96 per cent agreed it is important for employees to know that health costs will impact retirement income.
Despite this, almost a third (29 per cent) don’t provide retirement-related financial information to employees and many of those who do run purely voluntary programs – an approach that Allen says is simply falling short.
“Much of the current education is passive and positioned as voluntary,” she told HRM. “Employers might consider something more structured for retirement as they do for on-boarding.
“Also, education is rarely enough,” she warned. “Tools are critical. Consider how effective it is to tell someone to lose weight by eating and exercising, versus giving them calorie calculators, a scale and scheduling exercise sessions at the start of each day.”
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A recent study has revealed Canadian employers are doubtful about just how well their workers will be prepared for retirement – worryingly, it seems employees are far more optimistic.