Aon plc, in partnership with IPSOS, has released a survey that confirms the link between employee wellbeing and company performance. Aon’s 2021 Global Wellbeing Survey found that improvements to employee wellbeing within a company directly impact customer satisfaction and retention.
While wellbeing performance overall has a direct connection to a strong and focused wellbeing strategy, a series of ad-hoc wellbeing initiatives will have less impact.
Company culture the main driver
The top five employee wellbeing issues in Singapore are work-life balance, mental health, culture, burnout and a virtual work environment.
Although 91% of Singapore companies have at least one wellbeing initiative in place, only 51% have a strategy and just 16% fully integrate wellbeing into their business and talent strategy. The survey also found that overall, 27% of wellbeing programmes are performing exceptionally or above average.
Company culture was cited as the number one driver in developing a business case for wellbeing programmes. Beyond financial resources and investment, almost half of Singapore companies (44%) indicated that being able to measure the return on actions being implemented is one of their biggest challenges in starting or expanding wellbeing initiatives.
Leadership can set the tone for culture and wellbeing. Forty-two percent of Singapore companies agreed that the Chief Human Resources Officer (CHRO) is the champion of wellbeing initiatives, followed by the CEO (21%).
The survey also found that globally:
- improving employee wellbeing performance by 3% increases customer satisfaction and retention by 1%;
- organisations that improve employee wellbeing performance by 3.5% see a 1% increase in employee satisfaction and customer acquisition; and
- where employee wellbeing performance improved by 4%, there was a 1% increase in company profit and a 1% decrease in employee turnover.
Tim Dwyer, CEO, Health Solutions, Asia Pacific, Aon, said: “The impact of the global COVID-19 pandemic and a volatile economy has elevated the importance of wellbeing to individuals, organisations and communities in the region. Companies will do well to ensure that there is top leadership support in creating a culture and a wellbeing strategy that is aligned with their business strategy. This will lead to a resilient workforce that moves forward with confidence and certainty driving business performance.”
Retirement support and financial wellbeing other concerns
Another AON report, the 2021 Trends in Retirement & Financial Wellbeing survey for Singapore, revealed that working adults in Singapore ranked retirement planning as their top priority but an alarming 80% underestimate how much they really need to retire.
Additionally, while retirement support from employers is also lacking, further challenges remain around transparency in group retirement plans’ investment offerings and employees foregoing long-term perspectives to seek short-term gains.
Ashley Palmer, Regional Managing Partner, Retirement & Investments, Asia for Aon, said, “”Employers can have a significant impact on how much their employees save by instilling smart habits and healthy money behaviours. The right long-term savings vehicles, effective communications and financial tools will help Singapore’s workforce be more financially resilient in the wake of the COVID-19 pandemic.”
The survey identifies three main themes in financial wellbeing and retirement support for Singapore employees.
Financial wellbeing support is the new employee expectation
As this has become an expectation for employees, close to 40% of employers rank an employee financial wellbeing strategy as their highest priority, followed by emotional and mental wellbeing support.
The survey shows that 70% of Singapore employers will formulate or execute financial wellbeing programmes throughout 2021, in line with employee expectations. Companies also view offering a financial wellbeing programme critical in increasing employee engagement and remaining competitive in the talent market.
There is an increasing trend of employer-led supplementary savings plans
Currently, 22% of companies surveyed offer Central Provident Fund (CPF) top-up contributions to citizens and Permanent Residents. But, close to 40% of the working population in Singapore are foreigners who do not have access to CPF and are likely to have foregone their retirement benefits in their home countries.
To bridge this gap, and to provide equitable retirement benefits to all employee groups, close to 50% of the organisations surveyed offer supplementary retirement benefits to their foreign staff. Financial services firms are leading in this practice, followed by the technology and the healthcare sectors.
Promisingly, a third of organisations in Singapore are prioritising a thorough review of their supplementary retirement arrangements in 2021.
Alicia Brittain, Senior Consultant & Actuary, Retirement & Investments, Singapore for Aon, said, “Forward-looking companies first need to understand the financial worries of their employees and identify the gaps in their benefits offering. The most effective approaches are aimed at changing individual behaviours towards money and savings and providing accessible programmes and vehicles to deliver sustainable change.
“For example, when organisations provide retirement benefits as cash-in-lieu, it is most likely immediately spent and so does not form part of an emergency fund or long-term savings for the employees’ retirement years. Supplementary retirement plans solve this issue and are more flexible and cost effective – and can also offer contributions above the monthly CPF wage cap to increase employee savings.”
Employees in Singapore lack a well-defined default investment strategy
Less than 30% of the surveyed companies in Singapore currently offer their employees an investment choice in their retirement plans, and only 15% of retirement plans have a default investment fund.
This leads to employees selecting their own optimal investment funds. They may lack experience in understanding investments, which can lead to misallocating their money and result in inadequate retirement savings or excessive risk taking.
Brittain added, “The key to protecting employees and adding value to savings in any defined contribution retirement plan is a well-defined default investment strategy. This includes frequent performance monitoring, actively managing investment risks and dynamically reducing investment risk as employees move towards retirement.”