Employees need more help with their key financial decisions says report
To engage, educate and empower employees on financial decisions, communications on pensions and savings need to be both personalised and timed right, according to Mercer’s latest white paper, Engaging employees to take action in a digital age, authored in collaboration with Digitai and Professor Shlomo Benartzi, UCLA behavioural scientist.
Mercer found that three key behavioural insights: timing, personalisation and reducing the period between intention and action, can dramatically improve the success rates of financial communication.
“Despite a lot of effort, time and money being put into member communications, the results rarely reflect the investments trustees and companies have made,” said Mark Rowlands, Head of DC & Financial Wellness Services at Mercer.
“If employees don’t engage with their pensions and savings then employers risk ending up with a large proportion of employees that can’t afford to retire. This can derail talent succession planning and lead to a lot of stress-induced distraction and unhappy workers.”
“We need to make it as easy as possible for people to convert their good intentions into concrete actions,” added Mr Rowlands. “Our research has found that by personalising the content and timing of employer interventions we can grab people’s attention and improve their financial behaviour. This can be as simple as personalised text messages or as sophisticated as personalised videos.”
Mercer’s white paper outlines the factors that lead to the failure of conventional financial interventions, including information overload on part of the employees, choice overload that leads to procrastination and finally a lack of possibilities for converting good intention to concreted actions. The paper then describes how new scientific insights coupled with digital tools, traditional communications and face to face interactions together can overcome these obstacles. Finally, Mercer proposes a modern strategy that puts all of these insights together and can, if properly implemented, fulfil the longstanding desire of improving employees’ financial lives.
To form part of a wider communications strategy, Mercer has developed a personalised video offering. Tailored to the specific needs of each individual pension scheme member, these personalised videos allow members to take immediate action and alter existing contributions. “Personalised videos are highly effective in engaging with members and getting them to take notice,” said Mr Rowlands. “Key to their success is that they nudge members to act on the information they have been given right there and then, avoiding delays which often leads to inaction.”
“Making the human connection is essential to achieving success from employee communications,” said Susannah Hines, Head of Mercer’s Communications Consulting. “We all listen and respond better to communication that speaks to us directly and that clearly demonstrates the impact taking action might have on our own lives.”
To support companies’ wider communication strategies Mercer has developed the “4E Communication Framework” which ensures that a robust, evidence based communication strategy and plan is developed. The strategy is developed from the standpoint of the audience, ensuring what is provided and communicated to the member or employee is tailored to the needs of the individual. The 4 Es are: Evidence, Emotive, Environment, Evaluation.
“Through applying the four cornerstones of communication strategy development we can create a plan influenced and driven by understanding the audience and not based on assumptions about what we think the audience to know or value,“ concluded Ms Hines.
- Impact of financial communications dramatically improved by personalisation of content and timing
- Mercer launches personalised member videos based on practical application of behavioural science
- Mercer releases white paper on engaging employees in a digital age in collaboration with Digitai, founded by Professor Shlomo Benartzi, UCLA