21st century employee engagement
Recent research undertaken by Pension Geeks has highlighted that one in four Brits regrets not starting to save for retirement earlier in life.
Many younger workers will dream of sipping sangria in exotic locations after their working life is complete, yet the realities of how to build up the pension savings needed to achieve this can quickly be glossed over. How, therefore, can employers engage millennials not only to start saving for later life, but also prompt them to assess how they will achieve their ideal lifestyle in retirement? Similarly to my previous blog, I reached out to my own social circle for feedback.
I received a variety of responses to the simple question – ‘what would make you pay more into your workplace pension?’ The sentiment that ‘increased salary was the obvious answer’ was repeated by several friends. Indeed, research by Royal London discovered that as many as 75% of millennials would be willing to pay more into their pension in line with a pay rise. As encouraging as this statistic appears at a glance, the likelihood of every working millennial receiving a regular, significant salary increase is depressingly low. A sustainable method of creating continued engagement with contribution levels is therefore required.
The other comments I received hinted at one way to achieve this. Calls for ‘a more interactive presentation of your workplace pension’, as well as ‘clear and concise information in a format that doesn’t scare people’ all tie in with the provision of a pensions dashboard.
One place one view
A pensions dashboard can remove what one friend described as ‘a feeling of disconnect between a workplace pension scheme and myself’. Standard pensions dashboards are going to allow savers to view their pension pots in one place, which is a good start. However, having one place where all my financial information and savings is shown and where I can interact with planning tools and calculators would be better.
The good news is there are now dashboards that do this and more. My own employer Punter Southall Aspire recently launched NEXT GENERATION SAVINGS, which is their vision for challenging the workplace pensions and savings status quo. Using innovative and modern channels such as social media, digital communications, online tools and financial education, they believe employees can change and improve their savings for the better. myAspire, an interactive online platform, is an integral part of this vision and is where employees can not only view and interact with their workplace pensions but also understand, plan and calculate all their spending and savings.
My feeling is that efficient technology and financial planning tools like ‘myAspire’ can facilitate the essential first step towards increased engagement, and bring workplace pension and savings to the forefront of an individual’s mind. It could even start to get millennials so engaged that they view their workplace pension and savings as often as their current account balance.
Once younger savers are more aware of what they have the next step is to explore what this will mean for them when they retire.
Education and interactive tools
Workplace pension and savings platforms like ‘myAspire’ will normally include planning tools that allow savers to input their personal details, and then alter their future contributions on a sliding scale. This visual representation helps to put things in context and make it real, i.e. what type of lifestyle, or what car, holiday etc. do I want when I retire. To support these tools a gamification element could be introduced to increase engagement and help savers to visualise their future. This enables a shift in millennials’ perception of pensions from ‘something I will need in the future’, to ‘something I should engage with now’.
Once this change in mindset has been made, the next question in many savers’ minds will be how they can alter their behaviour to achieve their ideal lifestyle in later years. As many of us are well aware, pensions are not the most user-friendly savings vehicles, and complicated processes can often dissuade engagement.
Again, modern workplace pension platforms like ‘myAspire’ have this covered too.
The financial education material is communicated in easily digestible bite-sized chunks, and via the channels specific to the employee whether that is digital, face to face, hard copy or all formats.
Next generation savings
All of the dashboards mentioned here have one thing in common. They simplify. Planning for your retirement may have previously been considered dull and onerous. Now, employees can view their savings without the jargon or stack of paperwork. This technology is paving the way for the next generation of savers.
Topics: Employee Engagement