Effective employee communication is a proven way to increase take-up. Providers and intermediaries can help to get information across to employees using emails, online tools, brochures, websites, posters, presentations, text messages, articles, desk drops, payslip inserts and direct mail among others. However, a common mistake is to use all the available tools because they’re there – more isn’t necessarily better.
The amount of information you need depends on the amount of segmentation you plan to do. As a minimum you need to:
• know the workforce make-up – including age range, gender and salary levels
• understand the working environment – if it’s
single/multi-sited, office or warehouse-based, if they work from home or are mobile workers
• know how the company communicates with its
workforce, for example do they use emails, worksite presentations or brochures, and are these effective
Preparing the right plan to maximise take-up
Once you’re comfortable that you have enough information about the company and its employees, you can start designing the communications plan. Before you start implementing it, it’s good to agree what the target outcome is and how it will be measured. For example, looking at the non-joiners statistics, you might decide that anything below 40% take-up is poor, between 40% and 60% is average, and above 60% is good.
Let’s assume you have a client with a scheme in place that has a very low take-up and you want to increase it by using two strategies: targeting non-joiners and targeting new entrants. Let’s look at how you could do this.
Segmentation for the non-joiners is absolutely vital. Remember, most of these employees have already received communications about the pension scheme but chose not to join for various reasons, so you really need to target the right messages at the right audiences.
The main reasons for non-joining usually include:
• I can’t afford it
• I don’t understand pensions
• I’ll downsize my property and live off the profit
• I save in a bank account
• It’s too late to start a pension now
The first two reasons might apply to all the age groups in the workforce but are more likely to apply to the younger segment. You can target this segment with messages about how pensions don’t have to be expensive and how little it can cost them with the additional contribution from their employer and the tax relief.
The property and bank account reasons are often from employees between the ages of 30 and 50 who’ve made profit from their first property and who understand the need to save for their future. You can target this segment with messages about the downturn of property prices and the illiquidity that goes with low property prices. And you can counter the bank account reason by going out with a message about the impact of inflation and tax on bank deposits compared to the tax advantages of pensions.
Older employees often feel that it is too late to start a new pension. You can target this segment with messages about consolidating savings and pension pots, which means one point of administration and projections based on the whole pot.
New entrants are often forgotten and not a lot of time is spent on targeting them. But over the life of the scheme, they play a very important role in its success. Employers should integrate communications on the pension scheme with their induction programme and make sure that new employees understand that their pension is a very important benefit. This could save them having to revisit this segment later.
So, to be sure of an increase in take-up, create a tailored, integrated communication plan, using the right methods, at the right time, for the right clients.