Encouraging employees to save money for their pensions is a well-known challenge for HR professionals.
According to Engage Employees, 64 per cent of education and 67 per cent of retail employees are unaware of how much their employer contributes to their pension pot. In fact, 41 per cent of UK workers do not even realise what they contribute to their own pension.
The introduction of automatic enrolment has seen an increase in the number of employees considering joining a pension scheme and asking more questions about pensions and retirement.
However, there are still a lot of employees who do not realise that their employer may contribute towards their pension and, when faced with other financial needs, still divert money, which could be invested in their pension, to other things. It has also caused many workers to mistakenly believe the minimum UK pension contribution is enough to retire on.
Pensions are not just important for the sake of staff members. In fact, ensuring employees have a sufficient pension can boost long-term staff retention for firms and increase the job appeal for potential recruits. So, to find out how firms can get their employees interested in workplace pensions, keep reading for our five top tips on engaging staff members.
To spark interest in pensions right from the beginning, any new starters should have a pension induction course as well as ensuring they are provided with the necessary information about the national savings pension or the firm’s own pension arrangements. By discussing the necessity of having a pension, how they work and what employees can contribute, they will begin their role with this in mind.
It can be far easier to encourage employees to contribute more than the minimum before they have seen their first pay cheque. After this, they will become used to a set balance and will be far less willing to give away any extra pounds.
Employees unsure of pensions will often fail to realise their employer is also contributing to their pot. For younger employees, retirement can be in excess of 50 years away, making it seem unimportant at their age.
To engage all employees, try explaining how the pension scheme ties in with their employee reward package. This can seem more relevant to workers of all ages. Explaining that ignoring the pension scheme is, in sort, rejecting free money may be an effective way to entice more employees to join a pension. Don’t forget to show if you have supported mature employees with their retirement plans by providing forecasting and support during the latter years of employment.
When engaging employees in discussions about their future and finances, it is not uncommon for many to shut-off. Deciding how much to contribute or whether to contribute at all to their pension seems like a big task for some employees who do not understand the entire concept behind pension pots.
Bombarding these staff members with pamphlets, videos or website links is not an effective way to communicate this information. They need the details presented in an easy-to-consume manner where they can engage and ask questions. Investing in small group discussions or one-to-one consultations can be extremely useful for unsure employees, allowing them to feel comfortable digesting and understanding the information.
Organising their pension contribution amount is often something employees will move further and further down their to-do list. It can seem like a hassle when staff are busy, meaning they avoid properly setting it up while months go by.
To engage employees with their workplace pension, we recommend regularly nudging the workforce to check and invest in their pot. Using emails, light-hearted posters in the restroom or even workshops could make all the difference in grasping the attention of employees.
The aim of a pension calculator is to gain a better idea of what employees will receive from their current pension plan and how they can boost this amount. It demonstrates how small cutbacks from a pension pot can have a big impact on the overall retirement fund.
This is key for engaging unsure employees since it is all too common for staff to divert money from their pension pot to their more ‘urgent’ financial needs. By clearly displaying the downsides of opting out, or contributing less money to their pot, a pension calculator will encourage employees to become better engaged with their workplace pension.
Ensuring employees are aware of their pension is important for the future of the workforce but also for the firm itself. If your employees understand how much they are saving with your help, their loyalty to the firm can increase significantly. Taking the time to create pension starter packs, educate staff on your own contributions and engage employees with pension calculators are all worthwhile ways of aiding staff in understanding the need for pension pots.