It is time to rethink your pension communications?
How can HR make pensions communications more relevant, engaging and impactful? Here are eight research-backed tips...
According to the British Confederation of Industry and Aegon, just one in 10 companies are satisfied with their employees’ level of engagement with pensions. Many HR professionals want to change this. Pensions are an important employee benefit, they support recruitment and retention and many employers want to ensure staff have the best possible pension pots to retire well.
In July 2018 Punter Southall Aspire surveyed over 2000 UK employees on pensions communications and four major issues affecting savings and engagement emerged:
Employers need to consider stepping up their communications
Pensions aren’t a priority for everyone because ‘now matters more than then’
People fear for the future but aren’t taking any action
Apathy about pensions is widespread
A common issue affecting engagement is that some companies still rely on their pension provider for communications – information that often amounts to little more than an annual statement sent in the post.
To make pensions communications more relevant, engaging and impactful, companies need to get more proactive.
The survey highlighted that employers are influential when it comes to pensions. 82% of employees want their employer to guide them in a positive direction and 72% want them to provide financial education to help them plan their retirement. 68% want to be reminded to review their pension regularly.
The findings highlighted a strong employee appetite for better and more regular communications, but how else can companies engage people and influence their pension savings? Here are some tips:
1. Now matters more than then
Employees are more concerned with their current financial situation than saving for the future. 88% would prefer £400 now over the chance of £800 in the future. One reason is that many have financial commitments affecting their ability to save. Half are paying off a loan or credit card, 30% use an overdraft facility and 45% have financial dependents.
To tackle this, employers need to create a constant ‘savings drumbeat’ of positive communications focused on the benefits of savings more. They could also offer financial education to support employees with issues such as debt management or budgeting, and pensions and savings could be introduced into these conversations.
2. Timing is everything
Many pensions communication strategies tie into a yearly calendar. However, communications resonate most when targeted at key points in people’s careers. Pension communications received at the start of the calendar year only got a 53% response, whereas communications sent at the start of the tax year received a response from 68%.
People are more likely to react to communications at certain times such as during benefit changes, a change of salary and when they leave a company.
3. Embrace positivity not scare tactics
Traditional pension communications often talk about the risks and perils of not saving. But scare tactics don’t work. We found that people react to exciting and relevant messages. Messaging about ‘value for money’ is more engaging than being told ‘time is running out’.
4. Use a range of interesting communication channels
Using a range of communication methods will help engage people. Digital communications including videos, texts and emails can be effective especially for younger employees, but old-school classics such as face to face meetings, personalised letters and emails are still important to people.
This doesn’t mean that these traditional channels should be treated traditionally though. For instance, face-to-face meetings can be virtual (like the new FaceTime GP services) and letters can be creative and personalised.
5. Turn the out of office on
72% want to make pension decisions at home in the evenings and at weekends. Companies need to make sure that pension information is accessible outside the office to reach people at home.
6. Think about design
Good looking designs won’t trigger a reaction from people or engage them. The best ways to capture people’s attention with marketing and communications materials are with ‘powerful imagery’, ‘humour’, ‘moving words’ and ‘colour’. These will grab people’s attention and encourage them to respond.
7. Use technology
Technology can also improve engagement. Tools such as online financial dashboards enable employees to view all their finances in one place and that can be encouraging.
Also, such systems can include planning tools to help people manage their savings and visualise the impact that making small changes to savings habits can have over a long period of time.
8. Think like a FitBit™
People want to receive financial information in real time. They want nudges, reminders, updates and nagging. Pensions communications need to work like FitBits. Using technology that can replicate FitBits and engage people with real-time information, monitor, track and reward their behaviour and nudge them into new habits could be transformative.
These are just some of the ways that companies can improve pensions engagement in 2019, but what’s crystal clear is that the employer’s voice is powerful and influential.
Employees are looking to their employers for more guidance and information so they can make informed decisions about their pensions and secure their financial future. Given that, surely it’s time for companies to take pensions out of their cocoon and put them centre stage in their communications?
Johanna Nelson is Associate Director, Communications at Punter Southall Aspire. Johanna is on a mission to change pension behaviour for the better, her role is to advise clients on their employer communication strategies, primarily on workplace savings, benefits and financial wellbeing.