Employers that offer retirement savings benefits report higher levels of employee productivity over the past year and have greater optimism for the future, according to the Canadian Employer Pension Survey, a survey of 845 Canadian employers by HOOPP and Maru/Matchbox.
In addition, employers that offer retirement savings benefits believe it is very important to recruitment, retention and helping employees manage stress.
“The survey found that a majority of employers see a connection between reducing employees’ financial stress and productivity,” said Steven McCormick, SVP, Plan Operations, HOOPP. “And a majority also agree that it’s important to offer retirement benefits to reduce stress.”
Top HR Technology News: beqom Declares Improvements In Compensation Management Capabilities
He added: “Employers value the various benefits that they offer, but there appears to be a positive association between offering retirement benefits and improved productivity.”
Specific findings included:
- 73% of employers agree that employees feeling financial stress are less productive. 76% agree it is important to offer benefits that will reduce employees’ financial stress.
- The vast majority of employers who offer retirement benefits say they are very or extremely important to recruitment (83%), retention (86%) and the stress management of employees (85%).
- Among companies offering any sort of retirement benefits, 44% say employee productivity has been better than normal over the past year. This was significantly better than among companies not offering retirement benefits, of whom 29% say productivity improved.
- The more robust the retirement savings program, the more likely employers were to report improved productivity. Of those offering the most robust type of plan – a defined benefit pension – a net 38% reported higher productivity. (The net figure is based on the number of employers who reported higher productivity, 51%, minus those who reported reduced productivity, 13%.)
- For those offering defined contribution plans, a net +31% (47% – 16%) reported higher productivity. For those offering group RRSPs, the net figure was +21% (36% – 15%). And for those not offering any retirement benefit, the net figure was +7% (29% – 22%).
These findings from Canadian employers mirror findings from another recent study, in which 2,500 Canadians were asked about the same issues. That third annual Canadian Retirement Survey from HOOPP and Abacus Data, released on June 17, found working Canadians share very similar views:
- Two-thirds of employees with pensions said pensions are important for keeping them at their current job (71%), making a new job seem attractive (73%), reducing stress at work (71%), and keeping [them] focused and productive (69%).
- Those who don’t have pensions also see the value in them – among all workers (not just those with pensions), the vast majority (79%) say pensions are important to making a job seem attractive.
The employer study from Maru/Matchbox also found 66% of all employers expect revenue growth in 2021 over 2020, and 47% expect to increase their employee base in the year ahead. Eight in 10 (85%) said they are optimistic they will be successful beyond 2021.
Top HR Technology News: Hybrid Workforce Boosts Apple Adoption in the Enterprise, New Research Reveals
“Taken together, these two separate studies paint a clear picture on how valuable retirement savings benefits are for both Canadian employers and employees,” said McCormick. “While the pandemic has been difficult for many Canadian employers, those who have been able to weather the storm are optimistic about the post-COVID future and half plan to hire. In this context, where employers will find themselves competing for talent, it is notable how important retirement savings benefits are for both attracting and retaining staff as well as increasing productivity.”
The studies also found consensus on the future of retirement in Canada, and it is not an optimistic view. The Abacus survey found 67% of Canadians believe there is an emerging retirement crisis and, in the recent study, 70% of employers said the same.
Further, both sides agree that employers play an important role. More than three-in-four Canadians (77%) say that employers have a responsibility to offer a pension plan so that employees can have adequate retirement income, and 56% of employers say it is their responsibility to help set employees up for success in retirement.
Employers also see value in portability, which allows workers to transfer their retirement savings from their current workplace retirement plan to a new employer. Most employers (58%) say portability of retirement benefits is at least very important, while just 4% prefer non-portability. And 70% believe that governments should incent the creation of scalable and portable retirement benefits for employees.
Today’s release is the second of three retirement research projects from HOOPP this year. The third, slated for November, will make the employer case for offering workplace retirement savings, including considerations for how all stakeholders, including employers and government, can make it easier for Canadians to save for retirement.
“HOOPP conducts this research because we believe it is important that our members and wider stakeholders understand the value of a good pension as well as the overall state of retirement security in Canada,” said McCormick. “Everyone benefits – employees, employers, governments and the economy as a whole – when Canadians have retirement security.”
Top HR Technology News: Smart WFM Accelerates Global Expansion Underpinned by Modern Operating Model
To share your insights with us, please write to sghosh@martechseries.com