Preparing for Retirement: How to Engage Employees in Planning for the Future
Many employees, busy with their work, home life, and other daily obligations, may not be actively preparing for retirement. As an employer who offers a 401(k) or similar retirement plan, you can offer an additional benefit to your team by providing retirement planning education and getting them actively participating in the enrollment process.
The reward to your business is a more engaged workforce – individuals who appreciate your efforts and desire to help them plan for the future. Another business reward? Engaged employees are far less likely to leave your business to search for work elsewhere.
The success of a company's 401(k) program depends on the enthusiasm and support an employer puts behind it.
The key to active engagement is communication. When employees gain a deeper understanding of the importance of planning for the future, they could be more motivated to take action. And when you explain, in detail, the various retirement plan options you've made available, they can make informed decisions and boost your retirement plan enrollment rates – a win-win for everyone involved.
To communicate the importance of saving for retirement more effectively, consider these suggestions:
Prepare detailed materials in a range of formats. Employees absorb information in different ways, and at different paces. To be most effective, it's important to generate and distribute retirement plan materials in print form, through online interactive methods, video, and even face-to-face Q&As.
Remember, employees come to this material at different points in their lives. Some could be just starting out in the workforce. Others may be starting a family. Still others may be nearing the end of their working years and are thinking about retirement soon. A "one-size-fits-all" approach to retirement plan materials won't resonate with these different audiences. Adjust materials to reflect these individuals' unique concerns and needs.
Host brown-bag lunches and other educational events. A retirement plan kick-off event doesn't need to be formal or stiff. You can initiate discussions by hosting an informal brown-bag lunch meeting, where an HR representative outlines available options while employees ask questions and talk with each other about retirement planning in general.
From this informal start, you can move toward more defined, educational activities, such as workshops and other types of get-togethers. Think in terms of an ongoing effort that includes some or all of the following:
- Presentations by guest speakers
- All-staff meetings with a focus on retirement planning
- Newsletter articles
- "Real-life" employee retirement planning success stories
More communications can lead to greater awareness among employees about the value of enrolling in your company-sponsored retirement plan.
Give employees the chance to hear from financial experts. Many employees may put off planning because they don't know how to go about preparing for retirement. They may also feel that they don't have easy access to expert financial assistance. Schedule a formal presentation by an expert who specializes in employee retirement concerns. Have them cover specific topics of interest to your team. And if possible, see if they are available for brief, one-on-one meetings with employees.
After employees are enrolled, keep them updated on their investments. Over time, employees will naturally want to hear how their 401(k) investments are doing. You can offer monthly updates that demonstrate how the compound interest works, for example. As employees’ understanding of retirement plans grows, so too can their interest and participation.
The success of a company's 401(k) program depends on the enthusiasm and support an employer puts behind it. That enthusiasm, translated into a strategic effort to communicate and educate, can lead to active employee involvement.