Most advisers and financial professionals working with business owners view themselves as partners who help their clients prepare for a secure financial future through activities like managing their assets. In my previous column, I challenged advisers to think of themselves as an extension of their clients’ risk management team by broadening their thinking around “assets” to include risks related to things like their clients’ most valuable asset — their people.
Since the pandemic, millions of Americans are reflecting on what matters most to them, leaving their jobs in search of more money, a better work-life balance or a more engaging work environment. According to the Department of Labor, the U.S. saw a record 4.4 million workers quit their jobs in April 2022 alone.
While this may seem like an HR issue, advisers and financial professionals have an opportunity to help business clients understand risks associated with losing talent or failing to provide the resources employees desire to grow and become more engaged at work.
According to Gallup, U.S. businesses are losing $1 trillion every year due to voluntary turnover. For an individual organization, the cost of replacing an employee is one-half to two times the employee’s annual salary. You may be able to help by offering solutions within your portfolio or leveraging your network to bring the right resources to the table before turnover affects your business clients’ bottom line.
Carve out time in your next conversation to ask your business clients about their plan for managing people risk. Remind them that in today’s competitive environment, it’s important to think about how they can go beyond the basics when it comes to taking care of employees and planning for the future. Structure the conversation around the following categories:
If your client is already offering competitive salaries, a good benefits package can give them an edge over the competition. According to a Care.com report, almost 98% of HR and C suite leaders plan to start offering or expand at least one employee benefit, prioritizing the ones workers deem most essential, like child and senior care benefits, flexibility around when and where work gets done, and expanded mental health support.
Standard medical, dental and vision benefits aren't enough to differentiate most businesses. Business leaders don’t have to offer every kind of specialty benefit; instead, they need to determine what their employees want. In many cases, the expense is negligible, with most of the cost covered by the employee.
A great way to boost employee engagement and prepare for the future is through professional development. According to a McKinsey Global Survey on future workforce needs, nearly nine in 10 executives and managers say their organizations have skill gaps already or expect gaps to develop within the next five years. Now is the time for business leaders to be thinking about how they can address these gaps. This could include mentoring, training or other professional development opportunities.
Upskilling also prepares your workforce for future job openings. Losing a senior leader or top performer to a competitor or retirement can be a major blow. You can help your clients put a succession plan in place — or update the plan if it’s out of date.
Often the best solution can be found within the business, which can benefit the entire workforce. According to LinkedIn Learning’s 2021 Workplace Learning Report, employees at companies that hire or promote from within stay almost twice as long as employees at companies with low internal mobility. In addition, employees who move into new roles internally are 3.5 times more likely to be engaged.
You can also help your clients insure against the loss of key leaders with corporate-owned life insurance. COLI can be used in many ways, such as informally funding certain types of nonqualified deferred compensation plans. It can also be used as key person life insurance, paying out a death benefit to the business if a key employee passes away, which can buy time to find the right replacement.
According to Mercer Marsh, workforce exhaustion is rising as a result of work-life balance issues, change fatigue and too many priorities. This can lead to errors, turnover, reduced productivity and even a damaged reputation for your clients.
Offering flexible schedules and work environments can help business owners combat workforce exhaustion. If you’re working with many different clients, you’re likely hearing about a variety of approaches and can share these insights. You may even be able to leverage your network to connect clients with employee wellness experts equipped to provide mental health support.
When you engage your clients in conversations about managing people risk, helping them identify protection gaps and bringing solutions to the table, you will establish yourself as an even more valuable member of their risk management team.
Juan José Perez is president of Nationwide Corporate Solutions.
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