During the last enrollment cycle, did you post a flier that said something like, “Come to a benefit enrollment meeting and learn more about your 401(k)?” How well did it grab your employees’ attention, and motivate them to act?
“You have to put the message in a language they can hear and relate to,” says Martha Terry of Towers Perrin. In other words, make the message for baby boomers–or any other group, for that matter–more compelling by personalizing it. And be sure to tailor it to the age group you’re trying to reach. “The message for someone who’s 50 is different for someone who’s 30,” says Terry.
Targeted communications are becoming more common because each age group will respond to different messages so they need to receive different messages, says Lori Lucas, director of participant research at Hewitt Associates. Retirement for Generation X is so much further away that the message is much less urgent, so they need unique information. Baby boomers need specific knowledge now. For example, “if they’re not participating [in a 401(k)], the reason frequently is they’re lacking in knowledge of investing. They don’t know or don’t understand portability or vesting. We have to remind people that it’s not a problem if they don’t stay until they retire,” says Lucas. It’s especially sad, she adds, that too many don’t understand the matching element of 401(k)s.
“It’s remarkable that, when you ask them, they don’t realize how much money they’re giving up and, over time, what they could be saving when they retire,” says Lucas. Indeed, according to a 2003 study conducted by Aon Consulting and the Profit Sharing/401(k) Council of America, employees turning down the employer’s match in 2003 left $89 million of employer contributions sitting on the table.
Which is why targeted, personalized messages are so important–because people will read them, experts say. “Where we go awry with communications is with the peanut-butter approach,” says Terry. “We spread the same amount over everybody, saying, ‘Save, save, save,’ but they don’t know how much, how to invest or manage their money and how much it will be worth,” she says. On the other hand, targeted communications can focus on just what the specific audience is interested in.
So how does one achieve targeted communications? The experts say talk candidly with your employees because they’ll appreciate that approach. “To capture their attention, sketch out scenarios, such as, ‘If you want to retire at, for example, 63, this is how much you have to contribute between now and then to reach that goal,’ ” says Terry. Or, change the age in the scenario to a not-so-unrealistic 75. The employee gets to see all the pertinent data. The whole point is to get the employee’s attention, so that might be through e-mail or print or the scenario. The most successful messages, too, are positive and upbeat, not doom and gloom. For example, “Save a little bit more and that will have a big impact on your retirement and help you reach your goals,” is a successful type of message, says Lucas. She is also is a big fan of “sign me up” tear-off postcards that employees must return to the benefit office, which have chalked up a 15-percent-to-20-percent response rate, considered amazing by direct-mail standards.
Communicating with boomers is especially complex because people in this age bracket probably have worked at previous jobs, so they have pieces of benefits from other companies. “The challenge is that, 30 years ago, all their retirement benefits were in one basket. Now, they’re in multiple baskets,” says Terry, which makes it all the more difficult because, among other issues, you have to remind them to take into account other pensions they may have.