Research inspires new ways to engage employees

With 42% of U.S. workers earning under $50,000 a year,1 a significant segment of the employee population could be facing important financial decisions when it comes to balancing everyday expenses and saving for retirement. To help us better understand this group of employees and how we can help support them as they navigate their individual financial journeys, we conducted research to identify what motivates them to save for retirement as well as barriers that could deter them.

The comprehensive yearlong study involved focus groups, surveys and testing of creative concepts and messaging that leveraged behavioral finance concepts. We are using the findings from the research to help develop educational experiences that resonate with this group of employees and can help drive positive actions.

What we learned:

  • Workers earning under $50,000 tend to prioritize today’s financial demands over planning for their future, are often risk averse and lean on traditional savings accounts for their retirement.
  • While workers who participated in the study see the company match and tax benefits as motivators to enroll in their 401(k), they see the risks associated with investing as a barrier.
  • The power of tax-deferred compounding over time was not a concept that was fully understood by the workers who participated in the study, but as they learned more about it, they stated it would positively influence their decision to enroll in their 401(k).
  • This segment of workers say they are digitally engaged and access to email and online education is critical.

Actions coming out of the study

The learnings are informing the development of new and enhanced employee engagement experiences, including the launch of a new 401(k) enrollment video that addresses this cohort’s barriers to saving for retirement. The video educates employees on the ease and value of contributing, speaks to reward over risk and conveys the benefits of tax-deferred compounding over time. A “hero” personality reinforces the value of starting now by encouraging individuals to envision their future self. We will be integrating this video in upcoming enrollment campaigns.

Key takeaways

  • Watch the new 401(k) enrollment video.
  • Show the new video at open enrollment events or on your intranet or benefits site to help drive employee engagement.
  • Keep an eye out in the coming months for a white paper summarizing the findings and takeaways to apply to your workforce.

1 Bureau of Labor Statistics, Department of Labor, Usual Weekly Earnings of Wage and Salary Workers Q3 2022.