With the global economy slowly recovering from the financial meltdown, the Swiss Life Network Conference in Zurich provided an opportunity for network partners to focus on the topics currently grabbing attention in the employee benefits industry.
“The future starts here” was the conference motto for 2010, which had, as one of its aims, to gauge feelings in the industry on how the Network and network partners can better meet the changing needs of our clients and remain an active part of their future.
The conference started informally with a tram ride during which participants were invited to share their thoughts on how the Swiss Life Network’s products and services should evolve. The topics dominating the responses were: captive solutions, improving competitiveness, and increased online services. Margrit Schmid, Head of the Swiss Life Network, committed to continue activities in these areas.
Best practices in managing a mobile workforce
Following the official opening of the conference, Elisabeth Mangin of PSA Peugeot Citroën, France, presented a case study on how Peugeot Citroën set up a dedicated company to act as a centralised hub for the administration of their expatriate employees (Peugeot Citroën has 650 mobile employees and handles around 200 joiners and leavers each year).
By establishing this hub, located in Geneva, Switzerland, Peugeot Citroën is now able to better estimate mobile employee employment costs; ensure greater consistency in the design and delivery of benefit packages; cross-charge costs back to local entities and reduce cost inefficiencies regarding social security enrolments. Efficiency has been improved, processes streamlined, lower procurement costs achieved and governance simplified. At a strategic level, Peugeot Citroën is also now able to satisfy best practice guidelines on dealing with mobile employees.
The implications of an ageing workforce
This was followed by a panel discussion on the theme of changing workforce demographics, looking at how employers are adapting their approach and employee benefit packages to reflect the growing trend towards higher retirement ages.
With Tanguy Polet, CEO of Swiss Life (Luxembourg) in the chair, the panel comprised Laura Keijer-Doelman of Nike, Debbie Ewen of BlackRock, Sandeep Shrikhande of Kotak Life, and Jimmy Johansen of Mercer.
Customers define the employee profile
One interesting observation was the significance of the customer in defining the profile of a given workforce. Nike, for example, targets customers aged between 15 and 35, which is reflected in the relatively low average age of its employees. This contrasts with other industry sectors where customers prefer to deal with more experienced staff. These employers need to ensure that their core benefits packages can be adapted to appeal to an older workforce.
Removing retirement ages – and the need to plan ahead
The removal of retirement ages altogether was also discussed: the new UK government having proposed exactly this effective from October 2011. This led to the observation that companies rarely plan ahead enough for workforce changes. They must analyse their current workforce against future needs, taking into account the number of workers and their required skills and locations.
India’s succession problems
In India there are still plenty of younger workers coming onto the market. Unless companies are operating in a specific industry with talent shortages, there is no need to raise retirement ages. A bigger issue is the lack of succession planning strategies, with many business leaders working long past what would normally be regarded as a normal retirement age with no obvious successor.
Older workers seek flexible packages
Older workers seem to place less emphasis on salary and bonuses and focus more on work/life balance and flexible working practices. Flexible benefit plans can help here, since their design gives employees greater control over their remuneration packages. Benefit options relevant to mature workers, such as wellness consultations and financial planning, may also become more common in future, since most benefits planning today is focused on younger employees.
Cost issues
Where salary and benefit packages are amended to accommodate older workers, increases in the retirement age could have a significant impact on employers’ costs. Defined benefit pension promises are more expensive for older staff, whilst risk covers such as life, long term disability and healthcare are also age-sensitive. Larger employers able to negotiate risk coverage changes with their providers will find it easier to make amendments to the design of their schemes that enable them to recruit and retain older employees.
Innovation is required
The discussion ended with general agreement that changing workforce demographics do have an impact on the behaviour of employers and will change the form of benefits provision over time. Different industries will be affected in different ways, but retaining experienced employees with skills should be viewed as a positive challenge. Employers must be encouraged to develop innovative compensation strategies to reward this growing sector of their workforce.
The conference started informally with a tram ride during which participants were invited to share their thoughts on how the Swiss Life Network’s products and services should evolve. The topics dominating the responses were: captive solutions, improving competitiveness, and increased online services. Margrit Schmid, Head of the Swiss Life Network, committed to continue activities in these areas.
Best practices in managing a mobile workforce
Following the official opening of the conference, Elisabeth Mangin of PSA Peugeot Citroën, France, presented a case study on how Peugeot Citroën set up a dedicated company to act as a centralised hub for the administration of their expatriate employees (Peugeot Citroën has 650 mobile employees and handles around 200 joiners and leavers each year).
By establishing this hub, located in Geneva, Switzerland, Peugeot Citroën is now able to better estimate mobile employee employment costs; ensure greater consistency in the design and delivery of benefit packages; cross-charge costs back to local entities and reduce cost inefficiencies regarding social security enrolments. Efficiency has been improved, processes streamlined, lower procurement costs achieved and governance simplified. At a strategic level, Peugeot Citroën is also now able to satisfy best practice guidelines on dealing with mobile employees.
The implications of an ageing workforce
This was followed by a panel discussion on the theme of changing workforce demographics, looking at how employers are adapting their approach and employee benefit packages to reflect the growing trend towards higher retirement ages.
With Tanguy Polet, CEO of Swiss Life (Luxembourg) in the chair, the panel comprised Laura Keijer-Doelman of Nike, Debbie Ewen of BlackRock, Sandeep Shrikhande of Kotak Life, and Jimmy Johansen of Mercer.
Customers define the employee profile
One interesting observation was the significance of the customer in defining the profile of a given workforce. Nike, for example, targets customers aged between 15 and 35, which is reflected in the relatively low average age of its employees. This contrasts with other industry sectors where customers prefer to deal with more experienced staff. These employers need to ensure that their core benefits packages can be adapted to appeal to an older workforce.
Removing retirement ages – and the need to plan ahead
The removal of retirement ages altogether was also discussed: the new UK government having proposed exactly this effective from October 2011. This led to the observation that companies rarely plan ahead enough for workforce changes. They must analyse their current workforce against future needs, taking into account the number of workers and their required skills and locations.
India’s succession problems
In India there are still plenty of younger workers coming onto the market. Unless companies are operating in a specific industry with talent shortages, there is no need to raise retirement ages. A bigger issue is the lack of succession planning strategies, with many business leaders working long past what would normally be regarded as a normal retirement age with no obvious successor.
Older workers seek flexible packages
Older workers seem to place less emphasis on salary and bonuses and focus more on work/life balance and flexible working practices. Flexible benefit plans can help here, since their design gives employees greater control over their remuneration packages. Benefit options relevant to mature workers, such as wellness consultations and financial planning, may also become more common in future, since most benefits planning today is focused on younger employees.
Cost issues
Where salary and benefit packages are amended to accommodate older workers, increases in the retirement age could have a significant impact on employers’ costs. Defined benefit pension promises are more expensive for older staff, whilst risk covers such as life, long term disability and healthcare are also age-sensitive. Larger employers able to negotiate risk coverage changes with their providers will find it easier to make amendments to the design of their schemes that enable them to recruit and retain older employees.
Innovation is required
The discussion ended with general agreement that changing workforce demographics do have an impact on the behaviour of employers and will change the form of benefits provision over time. Different industries will be affected in different ways, but retaining experienced employees with skills should be viewed as a positive challenge. Employers must be encouraged to develop innovative compensation strategies to reward this growing sector of their workforce.