How financial wellbeing programmes boost productivity

Transcription

1 How financial wellbeing programmes boost productivity

2 What will we cover? A little bit about Admiral and me What does financial well being mean? Why is financial wellbeing important? What are the effects of poor financial wellbeing? Who is likely to feel financial distress? Admiral s approach Why does this kind of programme impact performance? Any questions? Slide 2

3 Admiral launch Bell & Diamond Insurance launched Elephant.co.uk launched Admiral floated at 2.75 on the London Stock Exchange Home Insurance On the 18th December, Admiral starting selling household insurance in the UK Jan 1993 Oct 1995 Jan 1993 Oct 1995 Jun 1997 Jun 1997 Nov 1999 Nov 1999 Aug 2000 Aug 2000 Mar 2002 Mar 2002 Sept 2004 Sept 2004 Dec 2005 Dec 2009 Dec 2009 Dec 2012 Dec 2012 Present Nov 2014 On the internet Admiral's website went live, making it the first UK direct insurer with an internet presence Management buy- out of the Admiral Group from the Brockbank Group Confused.com launched Group turnover topped the 1 billion mark We now have 8000 staff working across 16 brands and 7 countries worldwide

4 Admiral Group We now have 8,466 staff working across 16 brands and 7 countries worldwide.

5 What does financial wellbeing mean? Being and feeling financially healthy and secure, today and for the future (Barclays, Financial Well- being: The Last Taboo in the Workplace?, May 2014) High propensity to debt /Low propensity to debt (Employment Studies, 1999) Lack of control over one s finances: checks and controls, plannning Financial wellbeing is where one feels in control over one s finances and not carry the weight of debt Slide 5

6 Why is financial well being important? 22% of employees cite money worries as a cause of stress (CIPD, 2016) 20% of young people said that their debt made them feel depressed (Go Compare Generations Debt Report, 2015) Just under 40% of people don t think they are saving enough for retirement (lovemoney.com, 2016) 1 in 5 employees would value broader financial guidance, debt management and counselling if they were in financial hardship (Barclays, Financial Well- being: The Last Taboo in the Workplace?, 2014) 1 in 5 employees lose sleep worry about their finances (Barlcays, 2014) 3 in 5 employees are stressed about their financial future (Bank of America Merrill Lynch Workplace Benefits Report, 2016) Evolution from a nice to have to a must have in the employee value proposition: 47% in 2013, 69% in 2015 (BofA ML, 2016) 38% said that they would move to a company that puts financial wellbeing as a priority (Barclays, 2014) Slide 6

7 Why is financial well being important to us? People who like what they do, do it better Managing money is an essential skill generational challenges Financially health employees reduce risk to the business Employee welfare is important to us Creates a sense of belonging by being cared for Removes barriers to delivering excellent customer service It s an employee benefit and becoming an expectation from candidates/employees Slide 7

8 What are the effects of poor financial wellbeing? Escapism from the stresses: Substance abuse Alcohol abuse Poor behaviours and bad habits Distractions at work leading to poor performance Estimated productivity effect from 4% - 20% reduction Absenteeism incidental and long term Presenteeism because can t afford to be off, quality of work suffering Risky behaviours Slide 8

9 Who is likely to feel financial distress? People on low income Lower or no savings Age Gender Children Single parents People with sandwich responsibilities People renting People who experience life events - eg new child, university, death, marriage, divorce Anyone? Slide 9

10 Admiral s approach - then We have always liked to take a paternal approach it s part of our culture relaxed and informal Wanted to create good habits: We have offered a pension since very early on We began to match contributions in around 1999 in response to employee feedback An onsite Financial Advisor was also available as part of this service and whilst they mainly dealt with pension related issues, they were available for anything We have had a work place savings scheme since 2001, which was initially known as the Christmas Club. We wanted to educate by providing on site Financial Education talks from time to time Slide 10

11 Admiral s approach now Developed over a period of time Turning point for us when we were actively considering auto- enrolment because we reviewed our offering as a whole We had already appointed a Benefits Administrator with strong inter- personal skills to engage employees We also appointed a new Financial Advisor Our main focus in terms of financial wellbeing was to boost the contractual pension joiners which we did. We doubled our pension membership between 2012 & 2013 This was important to us because it drove the right kind of behaviours encouraging employees to plan for the future. There was also a strong link between those in the pension and those who stayed in employment (this has changed with AE, though) Slide 11

12 Admiral s approach now - pension Pension a cornerstone of our employee benefits and good financial behaviours: - 82% of our overall employee population are in the pension (Group Personal Pension) - Our pension scheme is contributory and we pay into it as well - AE and contractual joiners have the same terms (it s not a two tier system) - Contributions are a percentage of salary so they automatically increase or decrease with pay changes - We actively encourage members to review their contributions at scheme renewal time Slide 12

13 Admiral s approach now good habits Christmas Club is considered an Admiral tradition More relaxed rules Too much money was being saved for us to be comfortable with Started to look for other options to continue encouraging this kind of behaviour Linked with Cardiff and Vale Credit Union and also with Barclays Membership has reduced feedback from employees was that they liked that we did it and weren t happy it was now more formal Promoting membership over the next four months Slide 13

14 Admiral s approach now - education Education sessions in the last year for employees: Pensions 121s and presentations Know your benefits sessions Help to buy sessions BUPA presentations Credit Union Savings promotions FA provides life after work advice Education in the future: Financial planning - how to prioritise your money, improving your credit report Debt management - helpful hints to clear debts, the drawbacks of IVAs etc Short and long term savings - what's an isa, pensions, regular savings Moving house - rental, buying process etc Financial planning when having a baby (and other life events) Slide 14

15 Admiral s approach now share schemes Admiral s Share Schemes All Employee Share Incentive Plan (SIP) up to 3600 per year Vests after three years and is subject to Tax and NI Vest after five years and is Tax and NI free Dividends are payable Discretionary Free Share Scheme (DFSS) Discretionary shares awarded to key roles Discretionary shares awarded to star performers Discretionary shares awarded for length of service (15 years plus) Importance of long term good behaviours cannot be under estimated: - Long term commitment to the business and its performance to reap rewards - People own part of the company and this drives performance Slide 15

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18 Admiral s approach now practical help Spending diaries Employee Assistance Programme includes financial management help from planning to debt Home moving salary advance Telephone advice available to all members from our FA as part of our service Onsite services: legal clinic, mortgage and financial advice Giving people the time to attend these meetings Tax efficient benefits: Cycle to work schemes, season ticket loans, childcare vouchers, pension Specially negotiated discounts local and country- wide retailers Discount on our own products Early overtime payments Personal accountability Slide 18

19 Admiral s approach - effective reward strategies Financial wellbeing isn t just linked to education, it s linked to rewarding people in the right way as well Drive the right behaviours in people Recognise the standard and quality of service offered to customers to ensure a long term career at Admiral Basic and variable pay this is important to us at Admiral people should be rewarded for the work they do Organisational change can affect people s pay revisions of incentive structures Short and long term rewards monthly variable pay, long term share schemes Recognition is important as well thanking people as well as paying people is important to create a sense of belonging Voluntary benefits should form part of this strategy Slide 19

20 Why does this kind of programme impact performance? Creates the right kind of culture Open and honest people can raise issues and know where to go for help in and out of work Personal responsibility Preventative It stops people getting into (too much) trouble on site support is easily accessible - Calls to our EAP in the last year have only seen nine people contact them about financial issues two of those were about financial/tax issues and seven about financial/debt issues indicates that our programme is working - Managers are aware so they can raise concerns and identify risks - Minimises risks - Progressive - Employee needs change and so approach and content needs to change as well - Improves organisational performance, not just individual performance - Employees can focus on the job at hand and minimal time is taken up elsewhere Slide 20

21 Any questions? Insert title here Slide 21