As workers watch their retirement savings and investments dwindle, it has become increasingly important for employers to talk with staff about the economic instability, said a consultant with Watson Wyatt.
“This is an opportunity for everybody to do a better job and to get more information out there rather than thinking, ‘Oh no, I don’t want to say anything because there isn’t anything good I can say,’” said Jacqueline Taggart, a Toronto-based senior communications consultant. “There is still so much good information people can share right now.”
Nearly one-third of full- and part-time workers said they are not satisfied with the amount of money they are saving for retirement, according to Sun Life Financial’s Canadian and American Unretirement Index surveys.
Of the 1,226 workers who responded to the telephone survey in December, one in 11 said they have dipped into their retirement savings in recent months due to the economy.
“The fact that so many Canadians had to withdraw money from their retirement savings so soon into this downturn indicates how challenging it is for some, and signals a concern for the future,” said Dean Connor, president of Sun Life Financial Canada, in a release. “Today’s economic climate has Canadians of all ages looking for investment solutions that will protect their hard-earned retirement savings from worries of market volatility, inflation and outliving their assets.”
To allay fears and keep members of the workforce focused, a communications strategy involving information on both financial planning and workplace issues should be used, said Taggart.
Inviting experts to the workplace to speak with staff is an effective way for employers to help staff navigate personal financial problems — whether retirement-related or not.
“If they want to achieve the most of their staff, keeping them productive, keeping them focused because they feel they have enough to manage the buffeting of the economy that’s going on outside,” then employers should realize the merits of seminars and lunch-and-learn sessions, said Taggart.
It is important, she noted, that employers provide information for employees to make decisions on their own and clearly state they are not giving advice.
Taggart, who met her own financial advisor through a workplace-facilitated session, likened the role an employer plays in an employee’s financial decisions to that of a high school guidance counsellor. Much like employers, counsellors will offer a package of information with all the programs available and requirements, she said. After all the information is given, individuals are then expected to go home and make the choices on their own.
But employers should let employees know some specialists are better than others when advising on financial issues, whether it’s a consulting firm or an accountant.
“A lot of people don’t know the difference between a front-end load and a back-end load investment so they really don’t know what they’re getting into,” said Taggart.
Facilitating information sessions is important because many employees get information from media reports or family members, she said.
“That’s not enough information, especially because it’s all doomsday information,” she added.
An information session also provides a place where employees feel safe to speak with experts without feeling like they are obligated to give them their business, she said.
Despite the positive effects of communications on workplace morale, few organizations plan to deal directly with employees’ economic fears, according to a recent report by Hewitt Associates.
Of 192 companies surveyed across Canada in December, more than 35 per cent said they do not intend to communicate about the economic situation.
“Employer silence at this time may unnecessarily raise employee anxiety,” said Rochelle Morandini, national project leader for organizational health for Hewitt Associates. “This is a perfect opportunity for organizations to reach out to employees to explain their approach, the actions they are taking to cope with the recession and their rationale.”
Organizations interested in communicating more with staff about the impacts of the economic situation on business should start by providing “small bites” of information, said Taggart.
She used the example of a landscaping business employing roughly 50 seasonal staff that hasn’t invested a lot in communications strategies. There is no harm, she said, in addressing questions such as: What does the economy mean for business? What is the outlook for a landscaping business in a depressed economy?
“(These are) little building blocks of information so that they both solidify the position of the organization and give their employees some context because it really is all related,” she said.
“When you’re conscious that there’s more pressure on the service you provide, then you probably make an effort to provide better service so that if the choice has to be made about whether to give business to you or to your competitor, they’re more inclined to put it with you.”
© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.