Consider that in the 2015 Bank of America Merrill Lynch CFO Outlook Pulse Survey, nearly one-third (32 percent) of finance executives said they were concerned about the shortage of skilled talent.
Challenges in finding the right people could threaten the efforts of companies to expand into new regions and offer new services. As a result, finance executives, who are increasingly getting involved in overall business strategy, must help evaluate the ways their organizations are attracting and keeping the best employees.
Growing Optimism
Now is a great time to capitalize on business plans. According to our survey, finance executives are the most optimistic about the economy than any time since the recession. CFOs now rate the U.S. economy a 63, up from 59 last fall, and the highest figure since 2008 (on a scale of 0 to 100, extremely weak to extremely strong). And 72 percent of finance executives say their companies are meeting or exceeding revenue expectations.
But to make the most of these circumstances, organizations must be sure they are offering the right opportunities and benefits for their employees. Fortunately, there are some best practices and new trends for employee engagement that finance executives should consider when implementing overall business strategy.
Provide Benefits for a Multigenerational Workforce
The Pew Research Center estimates that 10,000 Baby Boomers turn 65 every day – and many of them will remain in the workforce. At the same time, in 2015, Millennials (generally, people in their 20s to early 30s) will outnumber Baby Boomers in the overall U.S. population. Providing the right benefits and workplace policies to this generationally diverse workforce will be important for many companies.
For instance, according to a Merrill Lynch Retirement Study, younger generations will increasingly depend more on their personal savings and investments, along with employment income (rather than traditional sources such as social security) as an expected source of retirement income. That means providing retirement planning, such as a 401(k) plan and company match, will become an increasingly important recruiting vehicle.
According to our 2015 CFO Outlook, finance executives are already implementing a number of common HR strategies, including offering healthcare insurance (96 percent); retirement funding (92 percent); bonuses or other compensation incentives (87 percent); wellness programs (63 percent) and education funding (54 percent).
Finance executives should ask vendors providing insurance and retirement savings programs to offer the most attractive plans, with data verifying the need by employee groups. For instance, the number of health savings accounts is predicted to rise to 30 million and surpass $40 billion in assets by 2017, according to Devenir Research.
In addition, company policies should be responsive to the needs of employees in different stages of life. For example, if there is policy to allow flex-time to take care of children, can empty-nesters take advantage of a flexible working situation to fit in hobbies or other activities? By thinking through such policies and the overall benefits packages, company leaders can help to retain and motivate the best employees across the age groups.
Offer Customizable Financial Wellness Programs
There is a growing trend and demand for employers to offer relevant and customizable financial literacy programs, as they are a major component of a well-rounded, healthy lifestyle. In fact, according to the Bank of America Merrill Lynch’s 2015
Workplace Benefits Report, 81 percent of midsize company employers believe that financial wellness education (or services) will be a standardized offering within 10 years.
Already, most companies offer some version of financial literacy programs, likely around savings goals for retirement. But new research shows that when financial wellness programs can be customized, employees save more money and can expect higher returns later on. In fact, participants in Bank of America’s PersonalManager® program deferred an average of $2,070 more a year than people who approached savings with a do-it-yourself mentality, which translates into significantly more money at retirement.
Other tools can be tied to milestones in an employee’s life, from having a child, paying college expenses, financing a new home purchase or budgeting for vacations. Providing these individual planning tools increases the engagement with employees by giving them greater financial security. CFOs should work with their human resources departments to be sure financial vendors can customize their offerings.
Recruit More Women
Women now outpace men in college enrollment and college degrees – and
research from Catalyst shows companies with the most women on their boards of directors significantly outperform those with the fewest women. At the same time, there are a number of industries where women are underrepresented, from technology to manufacturing to engineering.
To attract the best possible workforce, companies across the board should recruit more women and provide plans for them to advance. To start, companies should benchmark themselves against competitors, based on salaries, number of women and benefits. Internally, CFOs can drive data collection by reviewing data around women in the company -- for instance, determining whether women are compensated in line with the men at the company. Besides pay, other areas to consider include parental leave policies, telecommuting options and flexible schedules.
By working across departments, CFOs can take stock of the ways that women are supported and rewarded at their organizations, then determine ways to increase the involvement of women.
Analyze Data for New Employee Engagement Ideas
We know companies are tapping into a wealth of data to determine how to reach their customers, improve their operations and increase employee retention. Going forward, it is important for companies to stay ahead of the curve of what their employees need – or want – to keep the best talent. CFOs can help their organizations do so by keeping an eye on emerging trends for their employee base.
Take, for instance, healthcare usage and health insurance. Have there been any changes in how employees are utilizing the benefits, such as a move to high-deductible, low-premium plans? If so, are there any common characteristics among the employees? From that information, companies can determine which benefits to continue, ramp up or even discontinue.
Overall, business projections for the rest of 2015 are strong, as shown by our latest CFO Outlook. In order to keep focused on driving growth, finance executives should survey their programs to keep employees engaged and motivated as a first step to consider how to enhance their benefits. In addition, CFOs can lead the discussions on the future of benefits packages and employee policies, to ensure organizations are evolving with the workforce.
Matthew Elliott is Michigan State President, Global Commercial Banking, Bank of America Merrill Lynch