Many of today’s employees are failing to take full advantage of their retirement benefits and running the risk of being unable to retire comfortably.
In fact, in a national survey of employees with workplace retirement plans, 71% listed “living comfortably in retirement” as a top life goal. Unfortunately, less than half of them have confidence that their retirement savings will be enough, and a further 55% don’t feel secure in their retirement planning at all.
So, how can organizations engage employees and encourage them to maximize their retirement plans? It all starts with well-executed employee communications.
In this blog, we’ll break down how to communicate retirement benefits to employees, so they feel secure and empowered while planning their financial future.
Segment + Target Employee Audiences
There are several different ways to segment your employee audience, and how you approach it largely depends on the overall demographics of your workforce.
One of the most common ways to group employees is by life phase since employees from different generations will naturally possess different retirement planning priorities.
Recent grads and younger employees should receive information about the importance of retirement savings, the importance of taking advantage of employer matches, and contributing as much as they comfortably can to their account.
Communications should focus on:
- How the plan works
- The advantages of starting to save early (the power of compound interest!)
- Why it’s important to contribute regularly
- A breakdown of pre-tax contributions
Older participants (who plan on retiring within the next 5-7 years) will require a variety of information on transitioning from saving for retirement to disbursing their plan.
Communications should focus on:
- Information about shifting their account’s asset allocation into more conservative investments
- Specifics about their plan’s distribution options
- Withdrawal strategies that guard against depleting savings
- The impact of inflation
It’s also important to factor in existing retirement plan behaviors. For example:
- Employees who are not participating in the plan at all
- Employees who are contributing, but not enough to receive an employer match
- Employees who are not increasing their contributions enough over time
- Employees who are taking out too many loans against their retirement plan
Be Creative in Your Approach
As is often the case with employee communications, there’s a fine line between continuously communicating clearly and effectively and inundating employees with repetitive messages that all look and sound the same.
Because of this, it’s important to stay creative in your communications approach. A few suggestions:
- Get personal: Use a diversified approach and personalize your communications to specific audiences. Total Compensation Statements can be used to highlight each employee’s retirement savings and then show a forecast of what that amount will be in 5, 10 and 20 years.
- Eye-catching collateral: While diversified and personalized communication channels are encouraged, the tried-and-true method of using printed materials remains popular and generally well-received. That said, your branding may need a bit of a refresh. If you’re still using the same brochure from 2015, it might be time to create and distribute something that better reflects the faces and priorities of your existing workforce. Don’t be afraid to redesign and make updates so it resonates with your current employees.
- Social media: When it comes to employee communications, social media is here to stay. Since it’s the preferred digital habitat for many employees, it’s also a sensible and creative channel for distributing retirement planning information. The key here is staying active and engaging. Create incentives to encourage employees to follow your pages and continuously update them with timely information.
- Gamification: Make retirement communications fun! With gamification, you can incorporate competitive and rewards-driven elements into your benefits education. Perhaps offering employees gift cards, awards, status indicators or even quizzes and tests that encourage them to participate and learn at the same time.
Know When In-Person Works Best
In certain cases, creativity, multi-channel approaches and printed materials are simply no substitute for one-on-one communication.
When a decision is required, such as an investment selection, contribution specification, etc., in-person communication is often preferred. Participants tend to want (or even need) direct assistance.
As such, any decision-based retirement planning materials should be offered through an HR professional, manager or subject matter expert who can respond immediately and directly to any questions.
Communication is the Key to Plan Participation
In the case of retirement planning for employees, simply offering a benefit isn’t enough.
It’s up to employers to use engaging employee communication strategies to convince their employees that participating is in their best interest, especially when nearly three-quarters of them list “living comfortably in retirement” as a top life goal.
With that in mind, it’s essential to develop a clear, consistent, targeted approach that not only educates employees on the importance of saving for retirement, but demonstrates how to do so in their own unique terms and phases of life.