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In Q4, the Australian results from the 4 Day Week Global pilot were published, and they revealed some powerful insights regarding recruitment and retention. In this model, employees work 80% of their regular hours, whilst committing to maintaining 100% productivity. Out of the 26 companies that participated in the trial, 70% reported increased productivity, while 30% said it stayed the same. The companies also reported improvements in recruitment, fewer sick days taken, and better employee retention.

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Interviewing senior managers from 10 of these companies, researchers from Swinburne University of Technology found that smaller companies, which could not compete with bigger ones in terms of salary, saw particularly promising results.

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While the format is relatively new to the Australian market, these initial findings are encouraging companies to reconsider their talent strategies and employee roles.

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From July 1, parents have the flexibility to share parental leave payments and time off work, enabling them to better balance their caring responsibilities with their professional commitments. The laws combine two existing payments into a shared 20-week scheme, expand access and make it easier for new fathers to obtain paid leave. These laws come into effect for parents whose babies were born or adopted from July 2023.

Key points to note:

• The legislation removes the requirement that the primary Paid Parental Leave (PPL) claimants must be the birth parent, meaning that either parent can apply for paid parental leave first

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• Parents can access the entitlement in multiple blocks with periods of work in between to grant them further flexibility around how they take the leave

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• Single parents can access the full 20-week entitlement, up from the current 18 weeks

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• Parents can pre-claim up to three months before the expected date of birth or adoption so there is no delay in receiving payment

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• The new family income threshold is $350,000 per year, meaning more parents are eligible for the PPL policy

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• By promoting gender equality and improving family support measures, the new law is likely to improve employee retention and productivity, as workers who feel supported in their family and personal lives are generally more engaged and satisfied in their jobs. Employers may also benefit from a more positive reputation as a family-friendly workplace and could attract a more diverse pool of job applicants as a result.

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Changes to Superannuation

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From 1 July 2026, employers will be required to pay their Superannuation obligations to employees every payday, not quarterly. The incoming reform is designed to reduce the amount of unpaid super payments in arrears, which the Australian Taxation Office (ATO) has estimated to be over $3 billion during the 2019-2020 financial year and approximately $29 billion over the last six years.

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Harsher penalties may also be on the horizon for employers that fail to pay their worker’s superannuation on time. The transition to payday superannuation contributions is expected to make employers’ payroll management process smoother, with fewer liabilities in unpaid super obligations building up on the books.

The Federal Government has assured businesses that are worried about the impact on their cash flow that they will collaborate with industry representatives and engage in conversations about safety protocols.

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The reform is also designed to boost Australians’ retirement incomes, because:

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• Employees are less likely to miss out on their payments given the visibility of their superannuation in each pay cycle

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• Increasing the frequency of payments enables superannuation contributions to accumulate for a longer period, allowing for greater compounding growth

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• The reform is expected to have the biggest impact on employees in blue collar industries such as hospitality, retail, and construction, where cases of unpaid superannuation are most common.

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AI x Employee Benefits

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There is a lot of interest and excitement about how artificial intelligence can add value to the Employee Benefits sector.  We are already seeing examples of businesses using AI to improve the employee onboarding experience and automate some HR processes, leading to cost efficiencies.

In parallel, we’re having discussions with our global partner brokers to explore how AI can help them deliver a better client experience by gleaning more insights to aid client decision-making and provide benefits that truly resonate with employees. The possibilities in this space are incredible and we’ll be keeping a close eye on these developments and share relevant updates with you along the way.