Talent retention has always been essential for any successful business, but it's going be even more important in this decade and beyond as demographic trends amplify the impact of losing skilled employees. In this blog we explain what's driving these changes, and how forward-thinking Malta businesses can stay ahead of the curve by investing in employee benefits that act as a powerful magnet to attract and retain talented professionals.
By 2060 almost 30% of EU residents will be over 65(1), and there's strong evidence to suggest that Malta's population will follow a similar trend(2). The proportion of people of working age is decreasing, and we can expect this pattern to continue in the next couple of decades as the post-war baby-boom generation completes its move into retirement. One of the many profound implications this will have is that Government will not be able to afford to offer more generous state pensions, so the current and next generations of employees are likely to have major concerns about how to fund their retirement.
The challenge for Malta employees saving for retirement
There are 3 'pension pillars' that we currently have in Malta. In 2017 the Island introduced tax benefits to encourage employers to set up VOPS (voluntary occupational pension schemes for employees). The tax benefits had the aim of encouraging BOTH employers and employees to contribute into an approved and qualifying voluntary occupational pension scheme.
Why is this important for Malta employers & HR strategy?
In the new economy that's emerging, with the proportion of the economically active age group diminishing, the employee will be your company's most important resource. Losing an employee - especially if they have skills and experience highly valued by competitors - will be more costly and have a greater impact on the performance of your business than ever before.
What can employers do to future proof their HR strategy?
In a jobs market where the relative value of skilled workers is increasing, it's inevitable that employees will be drawn to employers who they view as being a trusted partner - a partner who works with the employee to ensure they can feel confident about their financial future. In that context, there is a significant competitive advantage to be gained by employers that invest in the most attractive employee benefits - and using a VOPS scheme as part of a HR strategy that's focused on talent retention is a great way to stay ahead of the curve.
VOPS are a powerful tool to attract and retain talent and benefit from the tax incentives offered by the Maltese Government. We recently launched the STM Malta Occupational Retirement Pension Scheme to allow Malta employers and employees to gain those and many more advantages.
Click here to find out more, or contact Gerald Xuereb (Relationship Manager at STM Malta Pension Services Limited) by phoning +356 7943 3207 or emailing email@example.com
(1) Eurostat: Ageing Europe - statistics on population developments
(2) According to the Malta National Statistics Office's Trends In Malta report there has been a significant increase in the Island's 65+ age group too - from 11.5% of the total population in 1995, to 19% in 2015. We will have to wait until the results of the 2021 Census (taking place in October) to see how the population has changed since 2015, but it looks likely that Malta's demographics will follow the trend that we're seeing across Europe.