How to design pension communications to engage younger workers

  • One effective way in which employers can help drive employee engagement with pensions is by ensuring ease of access, so they can engage more easily and more regularly.
  • Different age groups will ultimately respond to information in different ways, so employers should consider using different methods of communication according to employees’ preferences.
  • In order to minimise jargon surrounding pensions, communication strategies should be easy to understand, inspiring, engaging and informing.

A pension is the employee benefit that workforces value the most, according to the results of a survey carried out by benefits consultancy Punter Southall Aspire with the Chartered Institute of Personnel and Development (CIPD) between December 2022 and January 2023. Some 900 of the 1,700 HR professionals who responded to the research said this was the case. This suggests that long-term thinking about their future is an important aspect of working life for employees, so employers should look to engage younger workers with pensions sooner rather than later to ensure they are building an adequate retirement income.

Improve financial engagement

Employers may find that it does not matter what they include in pension communications, because if it is not engaging then employees will not pay attention to it. To combat this, as a starting point, it might be worth asking staff to think about what their older selves would say to their current selves about their financial situation.

Employers should consider showing younger workers the impact of starting to save at a young age, says Mark Bingham, partner at Secondsight. “They should not just try to engage young employees in particular with their pensions, but engage them with the idea of not overspending and saving for their future, for instance for a house or a family, as this is more likely to lead to them thinking about saving for their pensions,” he says. “Employers may want to consider helping younger staff to take their finances as a whole seriously before starting to talk about their pensions, as they are unlikely to know how much they’ll need to save for their retirement when first entering the workplace.”

When employees do not fully understand their pension or other benefits offerings, they most likely will not make the most of these or possibly leave it too late to engage. One effective way in which employers can help drive pension engagement is by ensuring ease of access, so they can engage with staff more easily and regularly. Younger workers tend to gravitate towards technology, so videos or apps are likely to be more efficient.

Technology holds the key to driving ease of access and, ultimately, engagement, says Steve Watson, director of policy and research at Cushon. “When it comes to personal finance specifically, instant access usually done through intuitive, personalised apps has become the norm, and pensions should be the same. Ultimately, through technology, specifically an app-based approach, employers can deliver personalised pension journeys, responding to the financial needs of employees and making them more financially resilient.”

Some of the most effective results coming from the UK Cabinet Office’s Behavioural Insights Team’s research, Pensions: what are your options? published in December 2021, show that by explaining the journey of a single pound through the pension process and how it leads to much more at the end, engages younger employees and leads to more contributing to their pension. Gethin Nadin, chief innovation officer at Zellis and Benefex, says: “Combined with showing the kind of lifestyle they could be living, this makes it appear 50% easier to get to the kind of later life most of us want.”

If a communication strategy does not also engage people on an emotional level, then it is unlikely to have an impact, explains Chris Andrew, strategy director at Caburn Hope. Often a big challenge is achieving a level of personalisation in communications that can effectively break through to employees.

“Ultimately, the key to engagement is a level of mutual respect, which can only be achieved through honest and authentic two-way communication,” he says. “Empowering employees and involving them in the decision-making process shows that employers have thought about why this matters and that staff are valued within the workplace culture.”

What appeals to younger staff?

Employers may want to consider capturing data relating to individuals in the workplace, such as information on their demographic. This can lead to better and more personal employee journeys, because saving and pension options that are appropriate to individual employees can then be presented to them at the best time.

Thinking about pensions as a product that needs to be marketed and having a good understanding of what younger employees value can be vital for a successful communications plan. “Sometimes it is actually best to avoid using the word pension as it carries negative connotations of being complicated, dull, and geared towards older people,” says Andrew. “Sorting a pension early to be in a solid position further down the line is crucial to get right. If pensions are reframed as looking after the future, it suddenly becomes more relevant. Pension communications do not have to be, and indeed should not be, dull. Employers should not be afraid to challenge perceptions around pensions and make their communication fun and aspirational for younger workers.”

The best pension communication methods can often depend on employees’ personality type, regardless of their generation, as some like lots of facts and details, while others do not.

Different age groups will ultimately respond to information in different ways, so employers should consider using different methods of communication based on employees’ preferences, such as short blasts of information for some, but a longer article for those who want in-depth details, says Bingham. “However, the majority of younger staff are used to getting information fast and in the way they want, so employers could think about how to make their pensions content fun, engaging and easy to access,” he adds.

Communicate in the right way

Employers need to be aware of avoiding the trap of not considering younger employees when developing their pension communication strategies, or using language that is too complex. In order to minimise jargon, communication strategies should be easy to understand, informative and engaging.

Organisations should also encourage their younger workforce to think about a future they would be happy with through vivid and positive communications, as these typically lead to better engagement, says Nadin. “Employers should be focusing on the people who are contributing today, so the language, tone and imagery needs to be more vivid and appeal to a younger audience.”

Andrew adds: “Organisations need to understand that messaging or communication that will work for someone approaching retirement will be different to someone at the start of their career. As such, it is important that [the] communication strategy also reflects this.”

Communication methods and content should be kept simple and relevant for the audience, as it is often the way employers say something rather than what they say, that ensures employees engage with the subject matter.

Organisations should communicate details about pensions in ways that suit the audience, perhaps using punchy snippets of information rather than big chunks, says Bingham. “They should also use a medium that younger staff are familiar with, such as YouTube videos. The length of videos can also be a factor; younger workers would be more likely to watch a two-minute video. Consider the question of what is stopping employees from engaging with their pensions, collect feedback on this and go from there.”

Above all, talking is still an important way of communicating to younger members of staff. Employers that start conversations about pensions are likely to influence, engage and get individuals considering and discussing the topic.