Firstly, don't do this...
Two weeks ago I left you with a little conundrum.
How do we stop employees opting out of our pension scheme, if they have to increase their contributions to up to 5% by April 2019?
After all, according to a recent report by Mintel, 28% of employees are already considering opting out to increase their take-home pay. When they realise they are going to be taking less money home thanks to their pension scheme, we can expect a frightening number to drop out.
Well, let’s do this backwards.
First of all, I can tell you with absolute certainty what won’t work.
Simply telling them they need to save more for their pension is unlikely to make much difference and is not one of the most captivating employee engagement ideas.
You see, while it’s absolutely true, it doesn’t pack much emotional punch. It’s logic and theory.
Compare that to the emotional punch of being told that your take-home pay is being reduced this year. For many people, that’s not just an emotional punch. They’ll feel that in their gut.
They’ll start imagining all the things they need to give up – their gym membership, Netflix, maybe for some people new clothes or meals – and it will feel like a real, big, immediate blow.
That can’t be countered with logic or with bland arguments.
What we need to do is to make the consequences of saving more (and of opting out) equally real to them.
Do plan ahead...
It’s not enough to simply tell them that ‘saving more will give you a better standard of living in the future.’ We need to help them visualise the difference that £50 a month will make – how much it may be worth once they retire, what exactly it will buy them, what their life will look like with that money and without.
“It’s the difference between being able to heat your home in the winter – or having to make do with extra layers. The difference between being able to keep your own car and not being able to afford to run one.”
We can use the same methodology to change the way they think about the £50 that is going to disappear from their pay packets. Yes, it sounds like a lot – but are they really going to sacrifice their future for the cost of 10 cups of coffee and an Uber journey? Or one decent shirt from a department store?
The key is to put the numbers in the context of their day-to-day, so that these numbers mean something and don’t just sound big and frightening.
People only decide to save more when they have a very clear sense of the value they’re getting.
Energise your employee engagement ideas
That’s why I believe that we need to start talking to our employees about money, pensions and savings in general in an entirely new way – one that is super-practical.
And that’s why we’ve started producing a magazine for your employees about money and savings, all of which relates back to real life. The aim is to give people the tools to make better financial decisions – not just lecture them about it.
Check out one of our recent articles.
And if you’d like to discuss how your employees can get their hands on one of these magazines,
Topics: Employee Engagement