The nine components of an effective pensions communication strategy
Because of COVID-19, the percentage of pension savers that withdrew their entire pensions in one lump sum shot up by a staggering 94% from April to September of 2020. Further research also indicates that 19% would have been likely to withdraw their pension in the fourth quarter of 2020 had they been able to.
Even with the growing urgency over withdrawing pensions, workplace pension apathy is still high in the UK. 80% of workers don’t know the value of their pensions, and 91% are in the dark about the investments their pension funds are going to.
This poses a major problem for employees, as securing their future tends to go down their priority list. As the organization leader, the responsibility falls on your shoulders to help educate your team about their pensions, especially during a time of financial crisis where fear and worry often overrule patience and rational thinking.
You will be going against the grain, however, and the key lies in knowing what the right message is and how to convincingly deliver it. In this article, you’ll learn the ten ways you can build a strong pension communication strategy in the workplace.
The first step requires knowing what might end up being the obstacles to your employees engaging with their workplace pension. You want to avoid rushing into talking with your entire organization about their pension only to find out your approach actively turns off people even more.
A helpful way of identifying barriers is to do preliminary research. Important questions you should be able to answer include:
- How many people actively engage with your pension scheme?
- How much are people contributing to their pension fund?
- How many members have looked into their pension statements?
You need resources to conduct such research, so it’s crucial that you come up with a budget to ensure this project has everything it requires to be done effectively.
Your research should go further into the distinct financial desires and concerns of the people working in your organization. Not everyone has the same mindset when it comes to their savings, so a one-size-fits-all approach is bound to fail for a good portion of your workplace.
Determine the different segments in your team, so you can adapt your messaging according to what they need. Young employees at the beginning of their careers have vastly different priorities compared to their older colleagues that are at the height of their earning potential and likely have families to support.
Each segment requires unique approaches that you have to identify. Millennials might prefer digital means of communication and would resonate more with a message about saving now to spend more later. Senior staff might want face-to-face conversations and would be more directly involved in investing.
Having clear and specific objectives from the beginning will help direct the entire communication strategy as opposed to a general and vague goal. For instance, aiming to “increase pension engagement across departments” is too broad, as opposed to aiming for a “10% increase in the number of below 40s actively engaging with their pensions within 12 months” which is more concrete. Specificity makes it easier to measure your progress.
Even with specific objectives in place, it can still feel overwhelming to try and to do every single one all at once. Separating goals into macro and micro goals provides your communication strategy direction and consistency:
- Macro goals are the big picture objectives that you can always refer to when you need guidance. An increase in pension engagement from younger staff can be an example.
- Micro goals are the tasks you need to do to achieve a macro goal. For the above example, you can have micro goals such as sending digital newsletters about finances every beginning of a quarter.
When choosing the communication channel to use, first determine which channels your audience will respond to. Is it online or offline? Are they using multiple communication apps on their devices or prefer to communicate through one channel only? A multi-channel approach can help cover your bases and give you the assurance that your message will reach its intended audience. Look into using the following channels:
- Traditional methods — These are the tried-and-tested communication channels that just about every working person has experience with like emails, webinars, face-to-face meetings, presentations, or posters. Senior staff are more likely to favor such methods when talking to them about their finances.
- Out-of-the-box methods — For your tech-savvy members, you can reach them through digital channels (e.g. social media, chat tools, QR codes, etc) where they are already likely to be spending plenty of time on. It’s also a great way to get people to join your organization’s official online platforms if they haven’t already.
Now that you’ve laid the groundwork with your research, barriers, goals, and channels, you can develop the actual messages you want to express to your organization.
- Keep it simple — Whether you are speaking to young or old employees, it’s important that your message is understood clearly, and the best way to do that is to keep the language as simple as possible. Avoid pension industry jargon and legalese. If needed, make sure to explain what these mean.
- Tailor your message — Consider the concerns of each segment of your workforce. Stress the importance of saving early to prepare for crises like COVID-19 to junior employees. Discuss retirement options with those close to retiring in your staff.
- Always add CTAs — Make it as easy and obvious as possible what you want your employees to do when engaging with their pension. A direct call-to-action such as “register for our seminar” or “complete the application here” must be appended at the end of each of your communication materials.
- Use positive messages instead of scare tactics — Scaring or guilting your employees into caring more about their pensions has gotten so common that it no longer has much of an impact, especially for young people who have a lot of their lives ahead of them. A positive approach that highlights benefits appeals to people’s desire for comfort resonates across generations.
- Use the right language and character — Emotions play a big role in pensions communication. Your message should evoke a strong emotional response that moves your employees to care, and that can be done with a memorable slogan that speaks to what they do care about.
Hasty decisions, especially during uncertain times, are inevitable. Be ready to support your employees when they make the following choices:
- Requesting a transfer or access to benefits
The current volatility of the market has understandably gotten people wary about their investments and thinking about gaining access to their pensions as soon as possible. You have to inform them of the risks and implications of their decisions.
Ask them to seek help from a regulated independent financial adviser, so they can take the best course of action. Suggest that they ask their adviser if there are increased risks as well. You can also direct them to Pension Wise for free and impartial pensions guidance.
- Stopping contributions altogether
Another avenue scheme members might pursue due to potential job loss and financial instability is to stop paying into their pensions entirely. There are also great risks to doing so, and it’s your responsibility to let them know.
Let them know that they will lose future employer contributions and may even lose other benefits such as death in service and survivor benefits. Tell them that they may also seek help from the Pensions Advisory Service.
The Pensions Regulator has provided additional guidance regarding this issue for those affected by COVID-19.
- Falling prey to scams
Members worried about their savings in these trying times are more susceptible to pension scams. You, as the employer, are obligated to safeguard their pensions. You can do so by educating them and following official guidance and safety protocols.
Provide informational resources about scams so that employees can be prepared for when they are faced with a fraudster. Apply the Pension Scams Industry Group’s Code of Good Practice when you do your due diligence.
Online tools can make understanding pensions easier. People are generally tech literate nowadays so educating your employees on how to use such tools shouldn’t be too challenging. You just need to show the organization the clear benefits of this initiative, such as how much more in control they can be with their pension.
Getting pension administration software can streamline this process and save your organization precious resources. You can provide users with all their important pension data such as their benefits. With online self-service, employees can even run potential retirement scenarios and update their pensions at home or in the office.
Online pension calculators are also freely available on the internet if employees are wondering how much they might have in their pension pots.
As well as you’ve executed your campaign, there will always be something that you can improve. However, you can’t improve what you don’t measure. Go back to your goals and see if you’ve successfully accomplished them.
Has there been an increase in your millennial employees actively engaging with their pensions within the past year? Is your digital pension newsletter getting sign-ups? If not, what needs to be improved?
The advantage of running your campaign digitally is that you can monitor and collect data in real-time. Use that to your advantage, so you know exactly which areas you need to work on and which ones already work.
The idea of saving and investing money now for a comfortable retirement in the future is never easy, regardless of age group. Young employees may be apathetic, while those closer to retirement might be full of worry.
Communication entails not just the presentation of facts but also the acknowledgement of your employees’ emotions. It’s important to let your staff know that you understand their fears and worries, and that’s why you’re taking these steps to help them understand what they can do to make more informed decisions.