How much should employers segment workplace savings benefits for staff?

Messages on workplace savings can be segmented for a number of different employee groups. But how far should this segmentation go?

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If you read nothing else, read this…

  • Workplace savings can be segmented according to employees’ age, job function, gender, demographic and salary.
  • New technology can be used to engage younger generations.
  • Employers must ensure messages about workplace savings are relevant and communicated through appropriate channels. 
  • It is not uncommon for employers to have five generations of employees .

Employers that want to ensure their workplace savings benefits are widely valued across the workforce may choose to segment their offering and the way it is communicated for different groups of employees.

The workforce can be segmented by age, job function, gender, demographic and salary. This allows employers to illustrate how perks such as pensions, individual savings accounts (Isas) and share schemes can suit individual needs and circumstances.

How far should segmentation go? 

One dilemma for employers adopting this strategy is to what extent they should segment the workforce. 

Nathan Long, head of corporate pension research at Hargreaves Lansdown, says while segmented messages work well it is important that employers are not too niche in their approach.

“While it is impossible to cater for every employee’s specific financial goals, age is still the best way to segment a workforce without making the groups too niche,” he says. ”But establishing common ground is important.”

Julia Turney, head of platform and engagement at actuarial, adminstration and consultancy provider Barnett Waddingham, also believes that age is key when it comes to segmentation. “Different age groups share different requirements, and savings should be looked at more holistically. At a high level, age segmentation is the most effective,” she says.

In many workplaces, it it is not uncommon for employers to have five generations of employees in their workforce and these should be taken into account for segmentation purposes, says Tracey Clarke, HR director at healthcare organisation Becton Dickinson (see case study below).

Young staff-2015

Employers also need to be aware of variations in attitudes among employees of similar age, demographic or job role, because no two members of staff have the same workplace savings needs as one another.

Another approach is for employers to segment their workforce by generation because this will also encompass age and demographic differences. 

Katharine Photiou, head of workplace savings at Barclays’ corporate and employer solutions division, says employers should segment benefits as far as they can to boost employee engagement and productivity.  

“Many [organisations] already use segmentation to maximum effect when tailoring solutions for their customers, so why should employers not use the same methods when dealing with their employees?” she says.

”Making savings packages more relevant to employees can be highly effective in enhancing workplace engagement. With evidence showing that organisations with higher levels of engagement enjoy lower employee turnover rates, segmenting workplace savings can play an important part in helping retention and productivity.”

However employers choose to segment their workplace savings benefits, specific drivers will be underpin the project, such as the desire to inform staff about pensions. Helen Buchanan, managing director, distribution and marketing in the corporate division at Legal and General, says: ”Benefits that are targeted are going to be more effective.” 

But it may be problematic to accurately segment workplace savings and financial education benefits because employees’ financial needs and aims will vary significantly depending on their age and demographic. Long says: “The workplace is diverse, so naturally it is impossible to pigeon-holestaff into exact groups that will all have the same financial goals and requirements.

“Trying to educate every single employee on every single area would lead to information overload and ultimately confusion. Segmentation helps to avoid this problem by streamlining the information.” 

Whatever their approach, HR professionals must look beyond the one-size-fits-all approach and segment workplace savings offers in ways that reflect the fact that each generation of employees faces unique obstacles and challenges. Photiousays: ”If tailored to the specific aspirations, priorities and objectives of each generation, workplace savings can be highly effective in enhancing employers’ engagement strategies.”

Data and communication

Top five workplace savings initiatives

In order to segment the workforce and effectively tailor the communication of workplace savings, employers must find out what employees are motivated by and what aspects of their benefits package they like or dislike, says Legal and General’s Buchanan. 

Providers such as Friends Life offer tools to help employers tailor benefits for employees. For example, the pension provider’s tool, launched in 2013, identifies a financial profile for employees by looking at their attitudes to a number of factors, including work, wealth and leisure. This information provides employers with an insight into what financial services and benefits employees will value most, and informs measures taken used to engage them in perks such as pensions.

In addition, HR and payroll data can be used to develop the best methods to engage staff with pensions and savings. Employers can also capture valuable employee information by conducting employee benefit surveys. The majority (90%) of respondents to the Employee Benefits/Towers Watson Flexible benefits research 2014 , published in April 2014, glean information in this way. 

Buchanan says: “Segmenting communications can be useful, and I do think [organisations] need to highlight to employees that there are different varieties of workplace savings.”

Employers must ensure that their message content is relevant and that the appropriate channels are used. These may include emails, face-to-face communications, texts, desk drops and social media sites. 

Turney says: “[Employers] need to go down to quite an individual level, and communication on offer needs to be personal, and for this online technology comes into its own.”

When it comes to promoting savings vehicles such as pensions, Isas and employee share schemes, 52% of the 54 respondents to Employee Benefits/Aon 100 Club research 2014,  published in June 2014, believe new technologies can be used to engage generations Y and Z with workplace savings.

While employers need to identify employees’ preferred method of communication, they must not make assumptions about communication methods based on an employee’s age or role.

Richard Wilson, policy lead for defined contribution (DC) at the National Association of Pension Funds (NAPF), says: “Segmentation is about communicating with people correctly and accurately; the most interest and the most benefit for their pound spent.”

In order to ensure workplace savings benefits are seen as relevant by a wide range of employees, employers have to thoroughly analyse the characteristics of their workforce before they can successfully categorise employees into different groups and engage them using the most appropriate communication channels.   

Becton Dickinson personalises financial education for staff 

Becton Dickinson

Global healthcare organisation Becton Dickinson launched a personalised financial education programme as part of efforts to engage its 300-strong UK workforce in workplace savings benefits.  

As part of the programme introduced in November 2014, the firm uses Nudge’s Global Quantum technology, which uses HR and benefits data to profile employees and pre-empt their individual financial needs.

Employees are then sent a number of messages about how to save money or set and track financial targets. These messages can be picked up on phones, laptops and tablets and can therefore be easily accessed for the firm’s members of staff who work in different locations. 

Tracey Clarke, HR director at Becton Dickinson, says: ”Our workforce is predominantly sales and marketing so many of our employees work all over the country. This means they need to be able to access this information remotely so we wanted this to be easy for them, and this technology gives us that.

“As many of our people work long hours and remotely, seminars and face-to-face sessions have not worked that well for us in the past and therefore delivering through technology was a must to engage with the whole of the workforce.”

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Employees’ financial circumstances can vary quite considerably: “We have people early on in their careers, saving to buy their first house, planning a wedding, starting a family, and those who are starting to think about retirement and who may have more disposable income to invest at that time in their lives,” says Clarke.

”Having access to information that covers all these types of events is extremely useful so employees experience a more personalised service that is far more relevant to them than a one-size-fits-all approach.”