Every year, the pension industry conducts research that measures how engaged participants are in their retirement plans. Despite tremendous efforts by plan sponsors to educate their employees, participation and contribution rates remain unchanged.
What are we missing? How do we get employees to take the medicine that’s actually good for them?
The missing element may be the lack of emotional connection. Here’s why. Saving for retirement is a lot like quitting smoking or losing weight. You know you should do it, but in order to take action you need to experience that emotional tipping point where you finally say, “That’s it, I’m doing it!”
Culture shift
When an issue becomes important enough to capture everyone’s attention, there is a shift in culture. For example, nowadays smoking is socially unacceptable. Through massive advertising campaigns, health information, changes in packaging and rules around where you can and cannot smoke, the culture has changed.
Another example is taking your own shopping bags to the grocery store. Education on the environmental impact of plastic bags has led to a culture of “save the environment.” So how do we create a culture of “plan for retirement”?
Take control
With DB plans in decline, it’s even more important for employees to take control of their own retirement planning. And a diverse workforce presents plan sponsors with many challenges. Education and communication have to be delivered at the right time, using techniques that resonate with the audience on a personal or emotional level.
Here are some basic best practices that can help plan sponsors achieve a cultural shift to planning for retirement.
- Run your retirement education and communication programs like an advertising campaign. Entice your participants. Advertising gurus will tell you that your audience needs to see a message at least 10 times before that message will it get results. With the massive overload of information today, that number may even be as high as 25 for some audiences.
- Support from the top down. The CEO and senior management need to endorse the program—not just once, but continually. They need to demonstrate that they personally believe in the value of the program.
- Use the bandwagon or peer pressure approach. This is a tried-and-true advertising strategy. Create a culture where, if you’re not participating in the plan you’re the one who’s missing out. Peer pressure is a strong motivation for change.
- Segment and target your messages. Give employees information that’s specifically geared to their age and their life stage. Position the message so that it answers “What’s in it for me?”. If 30-year-olds are struggling with debt management, help them to deal with that because, in the long run, managing debt affects their ability to plan for retirement.
- Don’t overwhelm. Provide information in short, digestible chunks. At enrollment, we tend to provide far too much information. People tune out and never join the plan. Explain the value of being enrolled and then provide more in-depth education later, when they’re ready to hear more.
- Benchmark, set a target and measure. Your education program should be different every year. Indentify what you want to improve, measure the results and analyze the program’s effectiveness. If you’ve tried a few creative ideas and there’s still no change, don’t give up. Do some deeper analysis to determine specifically where you’re missing the mark.
- Adjust and evolve. Just like good advertising campaigns, once you’ve measured your results, you may have to adjust your message. There are many ways to spin the same story. Different approaches will resonate with different segments of your demographic. The goal is to hit the emotional button that will cause a cultural shift.
- Keep the retirement planning message front of mind. Be creative. Display posters with tips or ideas on various financial topics. Use the company intranet to post short messages. Create quarterly or monthly quizzes or “Did You Know?” tips and ideas. Provide case studies to illustrate to members the benefits of participating.
- Engage ambassadors. In a diverse workforce, find a few ambassadors to help deliver the message. Make sure these ambassadors really understand the value of the plan, and then use the company grapevine to your advantage. Word of mouth is one of the most powerful methods of persuasion. Friends and colleagues are usually trusted sources of information.
Entice, encourage, engage
Engagement doesn’t happen overnight. It’s a cultural shift that’s achieved over time. Entice participants by answering the question “What’s in it for me?”. Encourage them along the way by helping them with key issues that may be blocking their ability to prepare for the future. Gently and continually illustrate the wisdom of planning for retirement. The result will be participant engagement.
Karrina Dusablon is director, education services, with Desjardins Financial Security.