Posts Tagged ‘2012 Compensation and Benefits Conference’

Retirement Planning for the Multi-Generational Workforce

Tuesday, October 16th, 2012

The following is a guest post from John McPhail. John serves Bank of Oak Ridge as a Business Relationship Specialist. He has more than 15 years of experience in the financial industry, including direct sales, marketing, and banking. “I guess I kind of learned HR the hard way when I ran my own business, but the experiences were invaluable. If it weren’t for a good HR mentor, I would have ended up a D.O.L. statistic”, said John.

As I sit here reflecting on the 2012 CAI Compensation and Benefit Conference, I can’t help but smile a knowing smile. This smile actually brings to mind a story.

One day Alice came to a fork in the road and saw a Cheshire cat in a tree.

“Which road do I take?” she asked.

“Where do you want to go?” was his response.

“I don’t know,”Alice answered.

“Then,” said the cat, “It doesn’t matter.”

It doesn’t matter…wow…what a tragedy. I submit that it does indeed matter. One might have all the skills and desire, but not be able to harness it or make a decision and act. Is this story about choice or direction? Maybe a little of both. More importantly, I feel, this story illustrates the power of purpose.

Purpose to me is the great “why” of the universe. The “why” of my “Retirement Planning for the Multi-Generational Workforce” presentation was simple. I wanted to engage a thought process that will enable everyone to visualize retirement as an eventuality, not just a possibility. Every employee needs to understand that with discipline, consistent contributions, and proper guidance, retirement can and will come to fruition.

With four generations working side by side, there is a need for specialized retirement planning specifically for your individual situation. Each generation has a unique way of seeing and interacting with the universe. Regardless of their approach, the four generations need different action items and respond differently to environmental changes.

Traditionalists were born between 1900 – 1945 and value saving their income coupled with paying cash for goods and services.

  • They represent 5% of the workforce.
  • Traditionalists perceive retirement as a result of 30 years working to retire and then living off their pension/savings. Their immediate financial needs are to keep what they have accumulated through proper distribution strategies. This has never been more evident than in 2008 when personal investments plunged due to the recession.
  • They need income producing investments with a fixed rate of return. Traditionalists will also benefit from having an actual retirement road map that is orchestrated and tracked by a proven financial professional. Healthcare is an important aspect of retirement to consider. Traditionalists need to understand Social Security planning and Medicare implementation.

Baby Boomers were born between 1946 – 1964 and adhered to the buy now pay later mentality.

  • They represent 45% of the workforce. Their biggest obstacle in retirement is the mentality of, “If I retire, who am I?”
  • Most of Boomers identity is from their career, and retirement can seem counter-intuitive to their sense of well-being and worth. With their “buy now pay later” mentality, they need help with debt resolution first and foremost. If you are a Boomer with a mortgage, you might have to continue to work or work part-time in retirement.
  • Baby Boomers need asset protection strategies as well as distribution strategies that will enable them to enjoy an inflation-adjusted income for life. Equity exposure should be at a minimum and they need income generating investments that don’t experience such volatility. Baby Boomers need a proven financial partner to team up and implement and track their financial plan. Social Security and especially Medicare education is a must for Baby Boomers.

Generation X’s were born between 1965 – 1980 and are the first generation not to do as well as their parents.

  • They represent 40% of the workforce and are conservative and cautious with their money. They also save more than the previous two generations.
  • They believe that since they have saved their money, they might retire early to try different experiences and may even change careers in the end. Generation X’s need a portable retirement plan with target date funds, auto-enroll, and automatic increases available. They need strategies in place to mitigate market volatility and education from a trusted financial partner.
  • Equities can be utilized, but they need to be monitored and coupled with some defensive strategies as well. Generation X’s have a better saving rate and could deal with some fixed investment choices to alleviate worry. A proven financial professional is key in keeping Gen X’s on track and motivated. Not surprisingly, Generation X’s need debt management and they need to avoid seeking the bigger, better deal.

Generation Y’s were born between 1981 – 1999 and value individuality.

  • They represent 10% of the workforce and earn to spend.
  • Their financial needs revolve around a need for consistent contributions to their employer-sponsored retirement plan. Active guidance is key to a Gen Y and they require routine feedback. Their financial needs are much like Generation X’s with a portable retirement plan. They would benefit from target date funds, auto-enroll, automatic increases, and a stable rate of return.
  • They are a bit more skeptical of Wall Street and seek a balance between steady growth and explosive returns in their retirement plan. They require flexibility in their financial plan and need active guidance and a regular report on the status of their account. They are very open to education as a tool for achieving their retirement goals.

My knowing smile in the opening of this article emanates from a belief that everyone, regardless of age, can be fiscally responsible. Don’t blame government or the lack of government. Don’t blame your income. Your attitude towards saving is a choice. You choose whether to be wasteful or frugal. Only you can control your spending and saving. If you can’t save for retirement, you don’t have an earning problem, you have a spending problem.

Find a financial partner, live within your means, have an attitude of gratitude and you will be on the road to financial freedom.

 John McPhail was a speaker at CAI’s 2012 Compensation and Benefits Conference. You can contact him at jmcphail@bankofoakridge.com.

7 Takeaways from CAI’s 2012 Compensation and Benefits Conference

Thursday, September 6th, 2012

CAI hosted its annual Compensation and Benefits Conference on Tuesday, Aug. 28 and Wednesday, Aug. 29 at the McKimmon Center in Raleigh. More than 200 HR professionals and company leaders participated in the event that focused on trends and best practices in total rewards.

The conference featured presentations from a variety of professionals responsible for advising companies on their compensation and benefits strategy. Some notable presentations included CAI’s Director of HR Services, Molly Hegeman, detailing marketplace trends for salaries and benefits in North Carolina, and Peter Marathas, Partner in the Employee Benefits & Executive Compensation Group, who imparted the audience with tips to handle the recent changes in health care.

Other topics covered at the conference included flexible scheduling, health care management, mistakes related to wage and hour law, and multi-generational retirement planning. Below are some key takeaways from last week’s conference:

  1. Marketplace trends show an increase in consumer-driven health plan options (CDHP), well-being programs, and companies giving employees financial education and advice. These trends show a decrease in 401K matching, salary budget, promotions, teleworking and recognition programs.
  2. Employee time off costs are virtually equal to health care costs, and time off is one of the highest valued benefits to employees, second only to pay.
  3. Top 5 Wage-Hour mistakes include considering salaried employees exempt, averaging work hours, errors in recording work schedule, believing child labor laws aren’t applicable to your own child, and thinking any person may be an independent contractor.
  4. Chronic diseases make up 75 percent of national medical costs, and 80 percent of chronic conditions are modifiable or preventable. National data supports that effective wellness programs improved employee health and impact overall healthcare costs.
  5. A survey from AonHewitt revealed that health benefits satisfaction is declining, more than half of employees do not know how their pay is determined, most employees don’t understand the value of their pension plans, and 80 percent of respondents fear that they will not have enough money in retirement.
  6. According to CAI’s 2012 Wage & Salary Survey, NC companies project to increase employee salaries by 2.9 to 3.6 percent for 2012. Percentage of companies giving performance-based merit increases is 81.2 percent and those giving general increases in 36.2 percent.
  7. Companies that don’t manage total rewards effectively are missing valuable input from their employees, leading to lower engagement and higher turnover; missing opportunities to manage total rewards as a portfolio, which may lead to higher costs and lower effectiveness; and introducing unnecessary risk into their total rewards approach.

CAI holds four conferences each year. The Triad Employment Law Update is CAI’s next conference and will take place at the Koury Center in Greensboro on Wednesday, Nov. 7, 2012. For more information related to CAI’s conferences, please check out CAI’s conference page.

Attract Candidates and Retain Employees with Your Total Rewards Program

Thursday, July 26th, 2012

A total rewards program refers to all the tools your company uses to attract, engage and retain employees, as well as recruit and secure talented job candidates. When selecting their future employer or deciding whether to stay or leave a company, workers evaluate the total rewards their company offers them. WorldatWork suggests that there are five elements that make up a total rewards program: compensation, benefits, work-life initiatives, performance and recognition initiatives, and development and career opportunities. A solid total rewards strategy combines the five elements to create a workplace environment that maximizes employee engagement.

Creating an appealing program will increase morale and job satisfaction, as well as improve overall staff performance. Here are some items to keep in mind when planning your total rewards program:

Your Employees Are Unique

Carefully analyze the different staff members who make up your organization. No two employees believe in the same values or partake in the same activities. Be sure your total rewards program takes employee differences into consideration. Create a culture that allows several types of people and personalities to grow and enjoy success.

Educate Your Workforce

As an employer, you are responsible for communicating to your staff the rewards that your company provides. If your employees receive higher than average compensation or your wellness program saves staffers money, make sure they know. It is up to your company to communicate the attractive aspects of your organization. Frequently remind employees of the benefits that you offer so they’ll have a reason to stay loyal and perform better.

Emphasize Your Appreciation

Employees are more likely to stay with organizations that show them that their time and efforts have not gone unnoticed. Use your total rewards program to highlight how important your staff members are to your company. Include meaningful ways to recognize and reward employees who turn in stellar work. Make sure professional development opportunities and other tasks to help your staff reach success comprise part of your total rewards strategy. Show them you care so they won’t want to leave.

CAI’s 2012 Compensation and Benefits Conference will feature additional tactics to craft an enticing total rewards program for your workforce. The conference will also cover several topics that are imperative for attracting, retaining and engaging your employees, including flexible scheduling and helping different generations plan for retirement. In addition to the knowledge you’ll gain by attending, you’ll have the opportunity to network with more than 150 HR professionals. Register for the conference today: www.capital.org/compconf.

Photo Source: robertstinnett