Ask most people about their pensions and their eyes glaze over. It’s all too complicated, you hear them say, for somebody who isn’t a pro... And this is despite 90% of employees ranking pensions as one of their most important benefits. But pensions are complex, driving engagement levels as low as 10%. And in the pensions world, low engagement equals low contributions.
Mercer, the world’s largest human resources consulting firm, was faced with this exact challenge. How could they get their clients’ employees to dedicate the time that their pension planning required? How could they bridge the gap between the importance pensions represented and the time being dedicated to them?
Making the “inaccessible”, accessible
Pensions are a particularly difficult area to make easily understandable as there are an infinite number of variations and options. People don’t necessarily understand there may be an issue with their pension unless it is clearly explained in a way that helps them understand their options and how and when to take the necessary actions. The fact that pensions are heavily regulated can stifle technological innovation but it can also mean there are potential areas of opportunity. According to the 2017/18 Rewards and Employee Benefits Association (REBA) Technology survey, “Pension schemes want to start adopting more advanced technology, including their top priority personalization, integration and other reward platforms and advanced analytics”. In fact, as many as 65% of those surveyed believed that technology would help improve staff understanding of the value of their benefits.
Finding a way to present this information in an easily digestible way remains a challenge however. As a result, people are turning to Personalized Video as one highly effective technology. It combines personalization, behavioural science and analytics. Mercer observed the effect this lack of engagement was having on their clients’ employee pension contributions. In response, they set out three clear goals which they believed would help drive engagement and, ultimately, future-proof employees’ approach to their pension plan. Mercer’s goals were as follows:
- Provide meaningful and personalized information
- Provide a customized action for each employee that makes a difference to their retirement and financial wellbeing
- Shorten the gap between intention and action, making it quicker and easier for employees to take action.
To achieve these goals, they decided to use Idomoo’s PVaaS™ platform. Using the data they had on each employee, they sent everyone their own Personalized Video, explaining clearly and concisely, how much they had contributed, what their projected lifestyle would look like during their retirement and a Call to Action to adjust their contributions. The Idomoo PVaaS™ platform provided a template-based approach, which meant the turnaround from Mercer receiving the relevant data to delivering the videos back to their clients was a matter of days. The ability to engage their employees in a personalized and timely way was the key to success.
Results: A Massive Improvement in Engagement
The results were staggering.
“In the past, companies might have spent £100,000 on a big communications campaign to encourage saving and got an extra 2 per cent engagement from it. On average, two thirds of the workforce we send our Personalized Videos watch them within 24 hours” said Brian Henderson, Partner and Director of Consulting at Mercer. “Of those, about half increase their contributions. That is a wow moment showing how technology can solve a difficult problem.”
Compared to the industry benchmark of 10% engagement, this was a huge jump and resulted not just in a better-informed workforce, but also an increase in the contributions made, thereby helping to future proof their pensions and retirement. Given the historical engagement experience with pension products, these numbers speak for themselves.
There may be other, less quantifiable, results from having employees more tuned in to their financial future. The daunting subjects of pensions and retirement can be a major cause of stress to employees. Financial stress can have a cumulative effect on employees, feeding into a negative working environment and high staff turnover. By having pensions clearly explained and future proofed you are helping to reduce this layer of potential anxiety and fostering greater employee productivity.
Mercer reached unparalleled engagement levels around a complex financial product by using Personalized Video to make it more accessible. This higher level of engagement drove half of the employees to increase their contributions and take a big step towards securing their financial future.
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