A just released report indicates that the retirement life for a large part of the population, around the world, is going to be dire in ten to thirty years. The report indicates that people are not saving for a number of different reasons. The future of our employees lives are in danger. Should HR do something about it?
The HSBC report indicates that in the US 25% or more of the population does no planning for retirement, but internationally 38% do no planning. Despite the planning that is done however, in the US and worldwide there are barriers that prevent saving for retirement, such as paying off other debts like a mortgage. Americans in particular are caught in this cycle, much more so than in other countries (55% vs 33%).
Lack of understanding and awareness
The report also indicates that worldwide 33% of employees have no idea how to plan for retirement and in the US that number rises to 41%. Generally they have no idea of when to start saving for retirement or how much. The report said “two-thirds (65 percent) of retirees globally who failed to prepare adequately for a comfortable retirement say they did not realize this until they had fully retired.”
What can be done?
The report indicates that there is a major lack of understanding and prioritization around the world. What can be done about this? The answer is training and education. Companies should do more than just provide a retirement method, such as a 401(k). Responsible companies would make sure there is more than a modicum amount of education that goes with that retirement plan.
The socially responsible thing to do?
In a time when employees don’t stay at companies for extended periods many companies may feel no obligation to be concerned about the future of their employees. They may figure that they will not be around anyway why do we in HR need to care? The answer is that it is the socially responsible thing to do. Every company should provide retirement education. Perhaps if employees heard the same message at every company they went to they would get the message.
If we do not do this education, if employees do not get the message, then society will be on the hook for providing for retirement and then we all pay. It is unlikely I will be around to worry about that, but many of you Millennials in HR will be around and you may wish you had done something about it when you had the chance.