Communications. One of the critical components that determines the success of the retirement savings plan.
With effective communications employees are able to understand the need to participate in the plan, how it helps them, and why not participating hurts their retirement planning in the long run.
Plan sponsors have a very important role in deciding the messages that need to be communicated, the communications specialists have to understand the essence of those messages, and translate them into a way in which it will appeal to the entire audience. This can be a monumental task because of the variation of the intended audience; which can be floor-bound or desk-bound, across a wide employee life cycle, from an entry level person to a mid-career professional to a pre-retiree, from an engineer to a factory worker.
Another important input in this process is the timing of the communication. The better the timing, when participants are most likely to read and review the material and take proactive steps to achieve the desired outcome, the higher the potential for success. That can depend upon the constituencies in the population, how well the organization is performing financially, how well the employees are compensated, when is the audience most likely to take action, among other factors.
Frequency of the communication cannot be ignored. Without reinforcement of the messaging, other things occupy people’s attention, so plan sponsors have to determine the number of times this outreach should be repeated – not necessarily with the identical material but with a consistent message and enough variety as to make people pay attention and take action.
Plan sponsors have to apply lessons learnt from past campaigns to fine tune how the current campaign has to be conducted.
How effectively all this is accomplished in a cost-effective manner is the biggest challenge.
With the gradually increasing adoption of automatic enrollments and other auto-features, communication strategies have changed to provide a different messaging – why it makes financial sense to stay in the plan, instead of encouraging people to enroll in the plan.
The modification and effectiveness of communication strategies in an ‘auto-‘ environment, and the impact of auto-features on those strategies has been analyzed and reported in this study jointly sponsored by the Lincoln Financial Group and Retirement Made Simpler.
Does your plan have any auto-features? Are your plan communications achieving the desired goals; both from a plan sponsor and an employee perspective? As a plan sponsor, do you need to do anything differently? And last but certainly not least, are those communications cost-effective?
Please feel free to share your thoughts, ideas, suggestions. We are very interested in hearing from you.