In the dark

I know a lady who used to be addicted to drinking cola.

I’m not talking about a can a day. I’m talking about 4, 5, 6 cans, easily.

Understandably, her partner nagged her endlessly to cut down.

“It’s not good for you! It’s full of sugar! It’s going to rot your teeth….”

My friend laughed it off. If drinking a few cans of coke a day was her worst habit, she claimed, then so be it until, that is, she had to visit a nutritionist. This professional didn’t offer vague warnings.

She showed her pictures which illustrated the amount of sugar in each can – 9 whole spoonfuls. She drew a chart, showing how much weight she could expect to gain each year just by drinking cola.

She laid out exactly what happened to her body in the hour after drinking a can. It’s not pretty: your blood sugar and blood pressure rise, and 60 minutes later you experience a sugar crash.

Lastly, she analysed my friend’s whole diet, showing her that the amounts of sugar she was consuming overall were much higher than she realised.

Suffice to say, my friend now keeps strictly to a can a day, no exceptions.

Lightbulb moment

So what did this nutritionist do so much better than the partner?

Firstly, she helped my friend visualise the results of her actions.

Instead of throwing facts at her, she got her to picture the impact these drinks had on her – and imagine what life would really be like if she continued to down cola at her current rate.

Secondly, she put the cola addiction into context. Seen alone, the cola was bad. Together with all the other sugar she consumed? It was terrible.

The same principles apply when you try to engage your staff on workplace pensions and encourage them to save more towards retirement.

In an earlier blog I explained that two significant mistakes made this challenging. Telling people how to save more is fine, but if you haven’t convinced them why they should save more beforehand, they’re never going to take action.

The second mistake is that when companies do try and explain to staff why they need to save more, they sound more like the partner than the nutritionist. Simply telling people they “should” do something isn’t terribly effective.

Why should we care?

For people to care, they need to visualise the consequences of their financial decisions. It needs to be made real to them.

They need to understand how much additional money they will have in the bank in 10 years time, if they increase their pension contributions by 3%, 4%, 5%.

Is it actually worthwhile? How much of a pot will they build up? What difference will this make to their retirement dates?

They need to be able to picture the different lifestyles they’ll experience if they retire with a pot of £50,000, or £250,000. What kind of car will they be able to afford? What kind of holidays? Will they be able to heat their house or not?

And they need to be able to put this in the context of their wider financial affairs.

You can lecture a 30-year-old about saving for retirement until you are blue in the face, but if they are busy saving for a deposit for their first house, that discussion doesn’t make sense until you look at their whole picture.

Similarly, someone might be pouring money into their pension pot, but if they are completely over-extended on their mortgage, they still won’t make sensible financial decisions. You can’t discuss pensions in a silo.

Get those two things right, and your efforts to engage your staff will be so much more effective.

You won’t be talking abstractions, but making workplace pensions relevant to them, personally. And you won’t be just talking logic, but touching their emotions.

So how do you accomplish this practically? What tools can you use to really bring it home to your employees that they need to save more?

Watch this space and I’ll show you.

 

Posted by Steve Butler

Topics: Workplace Savings

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