Your workplace pension scheme is probably one of the most expensive benefits you offer your employees. In fact, the average employer contributes £1,305 per employee, per year! Because, in most cases, it’s a mandatory expense, many employers don’t even think about whether employees engage with their pension. But leaving it to one side runs the risk of relegating this to a sunk cost, rather than an investment that can not only transform your employees’ futures, but also give them a greater sense of wellbeing today. In this blog, we’ll cover some top tips for boosting engagement with your workplace pension scheme.
Why is engagement important?
Boosting engagement with your workplace pension scheme can help employees feel more secure in their finances. Money worries impact 77% of employees at work. Financial wellbeing encompasses a range of issues, some of which are more short-term than pensions. But 77% of people currently report they don’t understand their pension enough to make decisions about their future. Helping people prepare for tomorrow can build a sense of longer-term security.
There’s also a big problem when it comes to saving for retirement: most people just aren’t saving enough. The default contribution rates (8%, usually divided into 5% from the employee and 3% from the employer) are well below what experts recommend to achieve a comfortable lifestyle in the future (12-15%). Therefore, helping your employees understand and increase their savings will have a positive impact on their final pension pots.
Showing them the value you’re adding to their lives can also help retention. 96% of employees want more transparency around pensions from their employer, for example. And 83% think a pension is the second-most important benefit an employer can provide. Employees who feel supported are more likely to stick around.
Not to mention, there can be some more tangible benefits for you as an employer. If you run a salary sacrifice pension arrangement (also known as salary exchange), when employees raise their pension contributions, you’ll save more on your National Insurance costs. This becomes a win-win: employees get a better life in the future, and you cut costs.
Traditional methods of pension engagement
Traditional methods of pension engagement include:
- Mentioning the pension in your regular staff comms
- Writing to staff specially with more details of the pension scheme
- Giving the pension a physical presence in the workplace, e.g. through posters or flyers
- Running a workshop, ‘lunch and learn’, or similar in-person educational event
These can all have an impact, especially if you’ve got an office-based team with time to spare for in-person events, or can run high-impact webinars (like those offered by Maji). If your regular staff comms already have high engagement, this could be a great way to highlight the pension scheme, too.
But in many cases, these traditional methods are all-too easily ignored. Emails are left in inboxes, letters are stuffed in a drawer, and yellowing posters in the photocopy room are passed by. This is especially true if these efforts are just a one-off.
A pension journey
One way to make sure your employee has lots of ‘touch points’ is to think about their journey through your organisation. What are you doing to help them understand their pension when they first join? Could you do more to encourage people to raise their contributions when they get a pay rise? And have you got targeted information for people at different life stages ‒ for example, as they approach retirement?
Providing digital tools can be a great way to engage your workforce. Many people are now used to banking online, but the pension industry is some way behind and not every provider offers a digital experience. One option could be to shift your workplace scheme to a provider that does have an app. Or, you could consider using a third-party platform like Maji that can bring the pension to life for your employees. Maji lets employees view their current pension balance, keep track of previous pension pots, visualise their retirement income and change their pension contributions at the click of a button. Plus, they’ll get digital coaching to walk them through the steps they need to take to prepare for the future.
Looking at the bigger picture
It can be hard for people to engage with future finances when they’ve got bigger worries today. Integrating your pension into a wider financial wellbeing strategy can help address their immediate concerns, while supporting them to save more for retirement. But where to start? Assessing your workforce could be one way to find out what’s troubling them, and how to help. For this, you could devise your own questionnaire, partner with a consultancy, or use a digital solution like Maji. Maji’s financial health check will find out how your employees are faring in the four main categories of financial wellbeing, and let you know (anonymously) what needs urgent attention.
Boosting engagement with your workplace pension scheme: let’s get started!
With these tips in mind, why not get started on building your team’s engagement with their pensions? You’ll be building a healthy workforce, not just today, but for the future. Reduced stress, more productive employees and a supportive work culture: what’s not to love?
If you’d like to work with Maji to deploy our digital financial planning and coaching platform with your team, get in touch for a demo.