How to engage employees around benefits through behavioural economics and digital innovation
However, not all decisions can be automated and it is apparent that “automated” employees do not save as much or value their benefits as highly. There is still a need to engage employees to help secure good financial outcomes and to achieve return on the significant investment by employers.
The challenge of improving financial decisions is rooted in three distinct factors: engagement, education, and empowerment. Behavioural science now understands the problem of how and why consumers make financial decisions. Two main behavioural insights — personalisation and timing — can dramatically improve the impact of financial communication. Using this knowledge along with advances in technology that enable mass personalisation, the industry has the solutions to solve this problem.
Engagement
Engaging the audience — grabbing a share of its scarce attention — and then getting individuals to remember and act on the content have never been harder. The amount of daily two way communication by people has risen from the equivalent of two newspaper pages in 1986 to 20 entire newspapers by 2010. By personalising the content and timing of our interventions, we can grab people’s attention and improve their financial behaviour in important ways.
In an age of too much information and not enough attention we need to personalise the message, content and timing of intervention. We need to make it as easy as possible for people to convert their good intentions into concrete actions.
Timing, education and empowerment
Traditional forms of financial education have failed to improve financial decision-making.
But what explains this failure? The evidence suggests the problem has its root in information and choice overload and the delay between intervention and behaviour. By making relevant information available at the right moment — eliminating the delay between outreach and decision — we can increase the impact of financial education. The lesson is that the right timing makes it easier to make the right choice, resulting in people doing the “right” thing.
When it comes to effective financial education, timing is a critical component of success.
Save more tomorrow works because it asks people to commit to a future savings increase. Use the “fresh start” bias and communicate in the month of birth or in the new year. Ensure any seminars have built in the opportunity to take action within the seminar.
The opportunity
The principles of personalisation and effective timing can be applied across a variety of technology platforms and communication channels; this can be as simple as personalised texts or as sophisticated as personalised videos.
This article was provided by Mercer.
