In an age-diverse workforce, every employee has different aims and different finances. Helen Swire examines how employers can meet all their employees’ financial education needs

guidance

The phrase ‘workplace demographics’ has never referenced a more diverse spectrum of age groups than in 2016.

How can employers make financial education relevant to all segments of their companies – and for the younger, cash-strapped generations, how can they encourage them to engage with their pensions and savings?

Separating the workforce out

The buzzword is segmentation – but the associated workload of segmenting and communicating with a workforce can mean that while it is the recommended course of action, few adhere.

According to Reward and Aon’s survey, when it comes to the overall benefits package – and the communication thereof – just under half (47%) of employers do not segment their workforce, while 28% do so by seniority of position (suggesting that the top-level staff receive different communications).

Only 17% of the respondents said that they segment by age, and only 13% by life stage: two key factors in employees’ money-making decisions.

Positively, however, nearly a third (30%) give their staff free education through their working lives, delivered either by the employer or the pension scheme. Similarly, 15% of employers said that they or their pension scheme pay for their employees to have free access to advice throughout their working life.

Making it personal

So what is best practice for companies in segmenting their workforce and communicating with them successfully?

United Utilities is one company that has considered the most effective way of segmenting a workforce spread out both in age and location. The company double-matches its staff’s pension contributions – with a 5% starting contribution from employees: an excellent benefit that should be valued by all.

Communications are segmented according to age group:

  • Up to the age of 50, the communications explain the pension, and encourage employees to contribute.
  • At 50, the communications explain what the value of employees’ savings is, what their options are, and how the decumulation phase will work. They have the option to change their glide path at this stage and discuss their retirement options.
  • At retirement, the communications examine what happens next and what employees should do as their next steps as they face the reality of freedom and choice.

With as many face-to-face comms sessions as possible, and an annual employee benefit statement which gives each member of staff the value of their pension pot and their estimated retirement income, segmentation of age groups has enabled United Utilities to have the pension conversation across the board with employees.

The result, says Robson, is “an engaged, happy workforce – with 97% of employees contributing at least 5.5%.”

However, with around half of the survey respondents saying they do not segment at all, there is clearly some way to go in making the pension as personal as possible to the wider workforce.

To read more, and join the conversation about best practice in communications, download Reward and Aon Employee Benefits’ free In-Depth Guide To Financial Education And Advice. CLICK HERE to download the guide.