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Home > Business/Finance > Financial Services > Financial Management
Workplace Marketing - UK
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- INTRODUCTION AND ABBREVIATIONS
- Around half of UK employees were positive about workplace marketing in 2004
- Report structure
- A more regulated operating environment
- More people at work
- Increased demand for financial products
- Figure 1: Expected demand for financial services savings/investment and borrowing products, Q4 2003/Q1 2004-Q1/Q2 2006
- Distribution of products and the buying process are still under scrutiny
- Education is the best way to financial success
- The workplace is taking a central role in education and distribution
- Retirement planning and financial well-being are key drivers of need for workplace financial advice
- Technology is playing a key role
- Employee benefit packages are a critical factor in developing and retaining staff
- The structure of UK industry with thousands of small- and medium-sized businesses is a barrier 6 Figure 2: Number of enterprises and employment in whole UK economy, by number of employees, UK, 2005
- ABBREVIATIONS
- INSIGHTS AND OPPORTUNITIES
- Filling the ‘advice gap’
- Health is key for many employees
- Consumers need to grasp the opportunities offered
- Looking beyond basic pension provision
- The ‘Interested’ group provides marketing opportunities
- MARKET IN BRIEF
- Move from fixed to flexible working patterns is a key driver of workplace marketing
- Greater self-reliance and knowledge needed - particularly in personal finance
- Pensions and health products head employees’ wish-lists
- Worksite marketing works better for products people understand
- Future growth will depend on growth in numbers and financial knowledge of employees
- Focus on generic advice in workplace financial education initiatives
- Supply chain has inhibited past workplace marketing growth
- Role of intermediary critical
- The move to platform relationships
- MARKET BACKGROUND
- What is worksite marketing?
- Features of worksite marketing
- Payroll deductions a key feature of worksite marketing
- Key factors in a successful worksite marketing approach
- A range of business models
- Emergence of the online virtual platform
- Education and advice play key roles in worksite marketing
- The decline in final salary pension schemes
- Rise of the defined contribution model - transfer of financial risk to employee
- The introduction of stakeholder pensions
- Not just pensions for employees to consider
- Extending workplace education - ‘Make the Most of Your Money’
- The need for advice
- Developments in the provision of generic financial advice
- MARKET FACTORS
- Favourable rise in employment
- Figure 3: Employment, employees and the unemployed, 1996-2006
- Employers’ surveys tell a different story
- The role of government and government strategy
- Government attitudes and actions are crucial for the success of workplace marketing
- Pensions at the centre of workplace marketing
- Pension funding statements to be sent to scheme members
- New NAPF ‘PensionsForce’ initiative wins government backing
- The National Pension Savings Scheme (NPSS)
- Affordability for employers
- Clarity around what the shape of the NPSS will be
- Supply process and timing
- Regulation
- Treating Customers Fairly is at the centre of the FSA’s work in retail financial markets
- Distribution reform improves workplace prospects
- Technology reinforces the workplace opportunity
- Turner could change the thrust of workplace marketing
- Consumers - saving more and borrowing less
- Figure 4: Spending and saving intentions over next 12 months, January 2003-August 2006
- Cashing in life and pension products
- Buying patterns are changing
- Employers - constrained in the past but now set to enjoy more freedom
- The emerging role of the employer as financial product supplier
- Employers and the ‘advice gap’
- The move from DB to DC pensions
- Figure 5: Percentage of workforce with DB occupational pensions, 1996-2005
- April 2006 - the final shift in the personalisation of pensions
- Greater need for communication and education of employees
- More pressure to take out life-cover at work
- Trends in the provision of pensions and other employee benefits
- Empowering employees
- Employee benefits packages poorly communicated to staff
- THE SUPPLY STRUCTURE
- Overview of the supply chain
- Providers benefit from scale
- Intermediaries hold the key to success
- Employers increasingly embrace workplace marketing
- Employees also see significant benefits
- Figure 6: Reasons for arranging financial products through employer/place of work, March 2004
- Major product and service providers show the way in tough operating environment
- The rise of workplace platforms
- Impact of stakeholder pensions with a 1% charge cap
- youatwork is a good example
- Aegon UK develops strong positioning in workplace marketing
- Prudential builds workplace services on corporate pensions position
- Scottish Life works4you
- Banks and building societies sometimes base workplace marketing on sharesave services
- Other niche approaches may also succeed
- MARKET SIZE AND SCOPE FOR GROWTH
- Figure 7: Savings & investment expected activity, workforce, Q2 2004-06
- Figure 8: Savings & investment expected activity, workforce, Q3 2006
- Over 44 million financial services products sourced through the workplace
- Figure 9: Sourcing financial products through the workplace, July 2006
- Supply side constraints limit demand potential
- Lower benefits in small firms
- Age of firm also a factor in financial product provision
- Figure 10: Occupational pensions provision according to age of company, 2005
- Fall in pension coverage overall
- Figure 11: Pension provision by firms in 2003 and 2005 (employee weighted)
- Is there a reduction in supply of financial products via the workplace?
- THE CONSUMER - PRODUCT OWNERSHIP AND FINANCIAL UNDERSTANDING
- Financial product penetration
- Figure 12: Product penetration of selected financial products, July 2006
- Expected activity of workers
- Figure 13: Expected activity in next 6 months, selected products, June 2006
- Consumers’ understanding of financial products
- Figure 14: Level of understanding of financial products, June 2004 and July 2006
- Signs of improvement in financial understanding
- Figure 15: Level of understanding of financial products, by gender, age and socio-economic group, July 2006
- Improvement in part-time workers’ financial product understanding
- Figure 16: Level of understanding of financial products, by working status and gross annual household income, July 2006
- Who employees would use for financial advice
- Figure 17: Main sources of financial advice, by employee, July 2006
- FAVOURED BENEFITS AND PRODUCTS ARRANGED VIA EMPLOYERS
- Pensions are the top employee benefit
- Figure 18: Products and benefits offered by employer, July 2006
- 15 million people have access to financial advice at work
- Figure 19: Products and benefits offered by employer and equivalent number of consumers with access to these benefits, July 2006
- Big differences in benefits received by full- and part-time employees and by TV region
- Figure 20: Products and benefits offered by employer, by employee status and household income, July 2006
- Those in the North West/Scotland are most likely to receive benefits
- Figure 21: Products and benefits offered by employer, by TV region, July 2006
- Implications and opportunities
- As well as pensions, employees would like greater access to health protection products
- Figure 22: Products and benefits that respondents would like their employer to offer, July 2006
- 25-34-year-olds seek better benefits
- Figure 23: Products and benefits that respondents would like their employer to offer, by gender, age and socio-economic group, July 2006
- Big demand for more employee benefits in Scotland
- Figure 24: Products and benefits that respondents would like their employer to offer, by TV region and age/socio-economic groups, July 2006
- Low product take-up - a weakness of worksite marketing
- Figure 25: Products already arranged via employer, July 2006
- Men, middle-aged groups and ABs most likely to arrange products through employers
- Figure 26: Products already arranged via employer, by gender, age and socio-economic group, July 2006
- Variations between regions in product arrangements
- Figure 27: Products already arranged via employer, by TV region, July 2006
- Impact and conclusions
- ADVICE AND EDUCATION AT WORK
- Some 165 million employees would welcome financial advice in the workplace
- Figure 28: Areas that employees would like financial advice/education about in the workplace, July 2006
- Less advice sought by C2DEs in areas of pension and retirement planning
- Figure 29: Areas that employees would like financial advice/education about in the workplace, by gender, age and socio-economic group, July 2006
- Less difference in type of financial advice needed on a regional basis
- Figure 30: Areas that employees would like financial advice/education about in the workplace, by TV region and age/socio-economic groups, July 2006
- Pre-/no family groups favour pensions advice
- Figure 31: Areas that employees would like financial advice/education about in the workplace, by lifestage and Mintel’s Special Groups, July 2006
- Employees would prefer one-to-one sessions with IFAs
- Figure 32: Preferred format for financial education/advice, July 2006
- The more ABC1s among workforce, the greater the demand for independent financial advice
- Figure 33: Preferred format for financial education/advice, by gender, age and socio-economic group, July 2006
- Greatest demand for one-to-one sessions in the North West
- Figure 34: Preferred format for financial education/advice, by TV region, July 2006
- One-to-one sessions head preference among employees in main areas of advice/training
- Figure 35: Preferred format for financial education/advice by areas that employees would like financial advice/education about in the workplace, July 2006
- Employees who would like financial advice/training tend to have average-to-poor understanding of financial products
- Figure 36: Areas that employees would like financial advice/education about in the workplace by level of understanding of financial products, July 2006
- Implications and opportunities
- CONSUMER ATTITUDES TOWARDS WORKPLACE MARKETING
- Around a half of employees are positive about workplace marketing
- Figure 37: Attitudes towards advice and product provision in the workplace, July 2006
- ABs and 18-34-year-olds were most in agreement with receiving advice from an IFA at work
- Figure 38: Agreement with statement ‘I would be happy to receive advice from an independent financial adviser who visited my place of work’, by gender, age and socio-economic group, July 2006
- Greater belief in workplace being less risky in buying a financial product among C2DEs
- Figure 39: Agreement with statement ‘Buying a financial product offered by my employer would be less risky than buying elsewhere’, by gender, age and socio-economic group, July 2006
- Convenience of arranging financial products through work is a bigger factor for men than women
- Figure 40: Agreement with statement ‘It is more convenient to arrange financial products through my workplace/employer’, by gender, age and socio-economic group, July 2006
- Men, under-35s and ABC1s are most keen on learning about financial products on the Internet at work
- Figure 41: Agreement with statement ‘I would be happy to find out more about financial products if my employer allowed me to use the Internet to have training’, by gender, age and socio-economic group, July 2006
- Some evidence of benefits of workplace marketing to people with poor financial product understanding
- Figure 42: Agreement with attitudinal statements by level of understanding of financial products, July 2006
- Implications and opportunities
- Mixed attitudes towards pensions proposals
- The retirement savings gap and the proposed National Pensions Savings Scheme
- Figure 43: Attitudes towards pensions/compulsion, July 2006
- ABs most in agreement; C2s most in disagreement
- Figure 44: Agreement with statement ‘People should be forced to put money into a pension scheme’, by gender, age and socio-economic group, July 2006
- Figure 45: Agreement with statement ‘I would not like the idea of an employer automatically enrolling me in a pension scheme’, by gender, age and socio-economic group, July 2006
- Implications and opportunities
- Around one third are classified as ‘Interested’
- Iffy Individualists (37% of respondents)
- Interested (30% of respondents)
- Uneager (33% of respondents)
- Figure 46: Typologies relating to attitudinal statements on workplace marketing, by gender, age and socioeconomic group, July 2006
- THE FUTURE
- Around half of employees are supportive of workplace marketing
- The problems of small firms
- Pensions are the top benefit offered and sought
- More product self-provision will enhance worksite marketing
- Some worries over pension scheme problems will spill over into wider benefits environment
- Consumers reject compulsory pension contributions as a fix to the retirement gap
- Fixing the advice/communications gap
- The challenge for suppliers
- The growth of the platform
- FORECAST
- Scenario 1
- Figure 47: Forecast of workplace marketing, scenario 1, 2006-11
- Scenario 2
- Figure 48: Forecast of workplace marketing, scenario 2, 2006-11
- Scenario 3
- Figure 49: Forecast of workplace marketing, scenario 3, 2006-11
- APPENDIX: RESEARCH METHODOLOGY
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