From a one-size-fits-all approach to an audience of one

Communicating with employees can go a long way in helping them get to grips with their long-term savings; however, we need to be mindful of how we communicate.

If we fail to accommodate the preferences of employees then regardless of how good the message is, there is always the possibility of failure. Factoring in the how of communication is critical to educating our workforce in a benefits environment that is becoming increasingly complex.

Employers are beginning to acknowledge the importance of financial education and engagement with employees. According to our recent research 64% of pension managers and trustees saw communications as a way to better explain retirement options to members. What’s also encouraging is that there is a demand for education coming from employees with 54.7% wanting financial education from their employer.

If people do not understand benefits like their pension they are likely to undervalue it. Many schemes are aware of the role communications can play here, and 55% of respondents also saw communications as a way of improving the perception of benefits. But as stipulated earlier, the form of communication is just as important as the message we’re trying to communicate.

Are people unengaged?

There is the perception that people, on the whole, are disengaged and disinterested in their pensions, but there are signs that refute this myth. A quick spot check on Google Trends (which demonstrates the relative popularity of search terms relative) highlights that pensions are more popular than Kanye West in the UK.

Kanye’s popularity is somewhat questionable, but we can extrapolate that he sets a high benchmark when it comes to Google searches. However, this has to be taken with a pinch of salt as this gives a reductive take on how people search for information online. Nonetheless, it is still exciting to see that there is an upward trend in searches for pensions.

A need to stop making assumptions

We need to stop accepting the premise that people aren’t interested in pensions; it is an assumption rather than a fact and could largely be a result of how we as an industry market pensions to the general population. The terminology we use, like uncrystallised funds pensions lump sum, is a daunting one for non-pension professionals (and even to some working with pensions every day) and our industry is littered with them. Because of this opaque jargon, 50% of people find pensions terminology confusing and complicated.

And this is where communications can bridge the gap, demystify pensions and help employees better understand them.

If we send out a plain text HTML email once every six months saying ‘check your pension’ or ‘here is the latest regulatory update on pensions’, then who can blame employees for being ‘disengaged’.

There is an increasing blur between our work and home lives to the point where turning off completely is a thing of the past; and this blur transcends to communications.

A better focus on communicating

As a consumer we receive an unending wave of relevant and engaging communications from businesses trying to prise open our purses. We have to keep in mind that inboxes are a competitive arena where only the best prevail and the losers are sent to the deleted box, or even worse, fail to get past the spam filter. Employees need to be treated like consumers for communications to be successful. If they don’t even get to the point of being opened then the content in the message is redundant.

What’s more, communications requires diversity. Think how many platforms you check on your commute into work: email (work and personal), text, WhatsApp are probably the staple, then you’ve got a multitude of overlapping social media platforms as well as the intranet. The list of channels is growing and needs to be accounted for.

A need to take into account employee preference

Each employee will have their own preferences and there are certain assumptions we can make using socioeconomic data. To ping off an email once in hope that this one-size fits all approach will achieve the engagement you want is naïve. People check different platforms at different times of day/days of the week and these variables need to considered. An audience of one mentality is needed to accommodate the increasingly eclectic preferences of employees.

With more and more people joining DC pensions, coupled with the new freedom and choice reforms, it is crucial that people understand their pensions and the options they have at retirement. There is far more scope for error, not just in terms of at retirement options but also the danger of scamming. Members need to be equipped with at least a base level to be able to ask intuitive questions.

This is one of those rare chances in life where we can have a real win-win scenario. Members better understand their pension and retirement options; employers and schemes can improve engagement and know that their people are better equipped for the future.

Gareth Davies is research and engagement manager at Capita Employee Benefits.

This article was supplied by Capita Employee Benefits.