Younger employees can be most active users
Think back to just a decade ago and consider the business and personal tools used then. Today, devices such as iPods, flip phones and DVDs don’t cut it for most of us anymore.
The shift has happened quickly — we’ve moved from being wowed by technology to being totally dependent on it. And with many people now online and always connected, technology has truly embedded itself in our lives.
This is a game-changer for workplace retirement plan sponsors that want to motivate employees to take action today on their financial futures. To teach employees about the importance of saving for their retirement, it’s about being where they are and leveraging the digital channels they are using — even when these may seem unconventional in the work environment.
For younger plan members especially, retirement is decades away. We are competing for their attention as they focus on other immediate life and work commitments, from paying off student debt to saving for a home to just living their lives to the fullest.
Technology not only allows plan sponsors to more effectively reach members, it can provide a digital footprint of employee likes, dislikes and actions so employers can provide a more personalized and relevant experience — with nudges or recommendations in the right direction to take action.
Retailers have been using big data for years to customize the consumer experience — employers need to do the same to engage plan members, increase their financial literacy and encourage them to take positive actions.
Motivating employee participation
One innovative technology-based solution being explored is gamification. Gamification is about integrating game mechanics and data-driven techniques into web content, services and campaigns. Simply put, the concept applies a game-oriented approach to non-game activities — such as retirement education — making them more engaging.
Game mechanics motivate participants to get involved — and stay that way. For many businesses, including Nike and Microsoft, gamification is a powerful new tool that drives loyalty and retention. Through gamification, businesses are turning interested parties into loyal customers — and the same can be done with plan members.
Sun Life developed a game-inspired program for plan members that uses popular game mechanics such as:
•avatars that players choose to be their personal identity
•a leader board that shows how well the employee is doing compared to other players
•a newsfeed that highlights player actions and progress, which can also be shared on Facebook and Twitter
•a series of missions that players must complete to advance, with each mission focused on one or more financial educational activities.
As the member progresses through the game, these game elements are focused on increasing employee awareness of the retirement savings program offered by their employer and, incrementally, building employee engagement, recognition of the benefits extended as part of their total rewards and financial literacy.
Standard gamification concepts include:
•Defining clear goals: This ensures the employee has a sense of going on a financial journey.
•Providing immediate feedback: Every time an employee finishes a mission, his progress bar moves and the number on the trophy icon at the top of the page changes. Built-in sound effects of crowds cheering encourage players to continue their journey.
•Creating a sense of competition and community: Employees engage in healthy competition with their peers through the leader board, building community as they increase their financial acumen.
These gamification concepts help make saving at work relevant to the employee. And by breaking the retirement education program into smaller, easier tasks, it transforms what can be a complex and daunting experience into something both manageable and fun.
In looking at the effect of the program on users, metrics show strong engagement across all segments, but particularly with gen-Y employees. They were not only the most active users, representing 31 per cent of participants, but were most likely to take action — 34 per cent opened a new product or increased their savings contributions.
Overall, 36 per cent of members took action, which included adding products such as a registered retirement savings plan (RRSP) or tax-free savings account (TFSA). And many employees added more than one product (on average, 1.25 per player).
In terms of ongoing and automatic payroll contributions, employees increased their contributions by 56 per cent.
Of that same group who added a product or increased contributions, 91 per cent transferred assets into their plan and 42 per cent opened a new product within one month after completing a level.
There was also a year-over-year increase in usage of the financial planning tools, including the retirement planner (56 per cent increase), asset allocation tool (44 per cent increase) and investment performance information (57 per cent increase).
Be where they are now
Digital technology is continuing to evolve at a rapid pace, and changing the expectations of consumers and employees. Employees expect more from their employers and workplace plans — and employers need to do more and be more relevant in how they communicate with and engage employees.
This includes using digital technology to create less traditional and more innovative ways of building employee financial literacy. Gamification is a fun and interactive means of leveraging data to nudge the right behaviours among plan members, engaging them in their retirement savings journey in a personal and meaningful way that works for them — and their employers.
Nadia Darwish is vice-president of market development for group retirement services at Sun Life Financial Canada in Toronto. For more information, visit www.sunlife.ca/moneyUP.