Asian economies are grappling with ageing populations, which places government finances under strain, while simultaneously putting more pressure on individual savings as an additional source of income in retirement.
While today, the impact is felt more in developed countries, such as Australia, Japan, and South Korea, employees in developing countries may find themselves unprepared as their economies are undergoing an accelerated ageing process as well — but unlike their developed country counterparts, they do not feel as much of a need to save for, or delay, retirement.
Challenges around retirement make employees more accountable for their own long-term financial security, including building up sufficient assets to cover them throughout retirement and managing investment risk along the way. This is not easy for even the most sophisticated financial experts — and for most households, it can be an overwhelming responsibility.
In Asia Pacific, nearly half of employees who are struggling financially say money worries keep them from doing their best on the job. And around the world, we also see that these employees are typically less healthy, more stressed, miss more days of work or are distracted and not focused. These pressures and distractions erode engagement.
How can employers help their employees achieve better financial outcomes? We outline some solutions, including providing greater flexibility, fostering financial engagement and using technology to support employees in their long-term needs. In Asia, personal financial issues are new territory for many employers and in many cases employees have not yet embraced their employer entering this aspect of their lives. Employers need to build a role gradually, building brand permission amongst their employees.