The China Post is reporting this morning that IBM has announced a $50 million staff development initiative specifically aimed at improving their staff member’s financial education.
Employees, as well as their spouses or domestic partners, will be offered a series of live and Web-based investment seminars starting this month. Employees will be able to get unlimited one-on-one personal financial planning and counseling by phone through [external financial services companies]. Financial planners from Fidelity and Ayco will be trained in all of IBM’s benefits programs and will receive no additional pay or commissions for selling their companies’ products.
“No other company that I’m aware of has ever done anything this comprehensive for its employees,” said Randy MacDonald, IBM Senior Vice President, Human Resources.
The move comes at a time when IBM and other companies are shifting retirement planning responsibility from the company to the employee. Traditional pensions, which promised an employee a guaranteed retirement income, are being replaced with “defined contribution” plans, in which employees put aside money for retirement, often with a partial match by employers. IBM, for instance, closed its traditional pension to new hires starting in 2005 and said last year that employees hired earlier will have their benefits frozen after 2007.
This type of investment makes sense on many different levels:
- It is increasingly difficult to attract and retain talented staff on the basis of standard terms and conditions of employment, or traditional perks. Today’s young people are increasingly requiring the company the provide challenges, training and opportunities that extend well beyond efficiencies and skills that are specifically (and limited to) job-function related. Providing these sorts of “life skills” can be a key component in an employer brand.
- The move towards requiring people to manage their own pensions will most adversely affect Baby Boomers (born 1946 to 1960s, now in their 40s and 50s). The younger generation don’t expect their companies to do this for them (nor do they want them to!). But Boomesr entered the workworld with an expectation that the system would provide. It isn’t going to, and many of them are making mid stream corrections. They need help.
- There are a few personal issues that really do have the potential for massive impact on job performance. It is documented and the common experience of many people, for example, that going through a divorce can really take your eye off the ball at work. This is obvious. But how many companies make the obvious link to therefore put some energy and resources into protecting the marriages of their staff? Another major personal stress factor is finances – and especially debt management. It makes great sense that a company would help its staff to manage and reduce this stress, so they can be free to focus on work. You could even argue that providing such support for staff is a fairly mercenary move, rather than an altruistic one. But whatever the motive, it really does make business sense, and its great to see a big company doing this!