The days of the “lifer” employees are numbered. More and more firms are competing over a limited number of qualified star performers for any role. With the growth in the recruitment and head hunting industries (there were more than 103,000 people working in the industry to place 634,000 candidates in 2014/15 in the UK alone https://www.rec.uk.com/news-and-policy/help-and-advice/research/latest-research/recruitment-industry-trends-2014-2015) more employees are doing shorter stints of employment.
The cost of this to a business is huge. Not only in the fees to the same recruitment companies that have created this need by placing your staff elsewhere but also the time that must be invested in their replacement. Companies need to put in place contingencies for key staff leaving and to also consider how they can reduce the chance of it. Historically this has been achieved by increasing the direct benefits (remuneration) and indirect benefits (days of sick leave, etc.) with each year of their employment. The challenge there is that that is money going out of the business today that may just defer the challenge rather than confront it. Those self-same increases may also become required to stave off real and imagined competitors from poaching your staff.
So how can a business protect itself and encourage its staff to work there for longer without dramatically growing its wage bill? It is here that a corporate pension comes in.
Pensions are an arrangement between the employer and employee where the former puts money aside for the latter to enjoy once they reach a certain age and have stopped fulltime work. The longer that the employee works for the employer the more money that goes into their pension which encourages them to work for you for longer. A number of companies provide this type of benefit by invitation only or once an employee meets certain requirements.
Governments around the world seek to encourage individuals to save for their retirement and to encourage more saving by providing tax breaks to those businesses that fund pensions on behalf of their employees. So not only can you reduce your staff attrition rate you can also reduce your tax bill. Corporate pensions should form a cornerstone of a corporate talent retention plan.
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