Drive 401(k) participation by tying to Open Enrollment

contribution changes to 401(k) plans during open enrollment, employers have seen an increase in participation.   The study showed an 11% year-over-year increase in the number of employees making a change to their retirement plan election as a result of the association with the health care open enrollment period.  And nearly all of these election changes were positive (93%), meaning employees started or increased contributions to a plan.

While Health & Welfare benefits enjoy an annual period for employees to reflect on their needs and make adjustments, retirement plans have not historically enjoyed this kind of attention.  And studies show that it’s sorely needed.  This Open Enrollment period, consider offering some communications dedicated to your 401(k) plan and provide easy access to make changes.  You may be surprised at how many employees engage.

Meaningful New Hire Connections

is formed much, much sooner.  In fact, like so many other things in life, your greatest opportunity to build trust and excitement about your organization is likely with the very first impression you make.

So, what’s your organization’s first impression?

Is it a thick new hire packet full of brochures and forms mailed to the home of a future employee?  Is it a live orientation that is delivered inconsistently  - with a great HR presenter in one location and a less than compelling/knowledgeable speaker in another.  Even worse, is that PowerPoint presentation given over the phone to new employees in remote locations?

Many of our customers have come to us with this problem: “We’re doing a lot of hiring this year.  Our new hire orientation process is resource intensive and not representing our organization’s culture or employee value proposition effectively. Help us!”

This is the type of problem that the multimedia web was created for.  Here are some important ways that web multimedia can help your new hire orientation process:

• Establish a meaningful connection with new hires.  Retire the static new hire packets and long PowerPoint presentations.  By leveraging web video you can build excitement and convey the unique and dynamic culture that exists in your organization.
• Provide a consistently rich experience customized to your company.  By moving to the web, employees and families across the globe have access to the same compelling new hire orientation experience.  It’s consistent and it’s available on demand.
• Reach them before they even get into the building.  Studies show that making a new hire feel welcome and comfortable from day one is imperative to their long-term success.  This is best accomplished by having a new hire spend time with their new team, working on real projects. Enable this to happen by reducing or even eliminating time consuming orientation meetings. Provide pre-boarder access to your online new hire orientation and have employees show up on their first day already informed about deadlines, benefits, etc. and ready to get started in their new role.
• Save time and money.  The web offers you the ability to reduce resource intensive live new hire orientation meetings and packets, binders and other paper materials.  Something tells me you won’t miss those overseas new hire orientation meetings at all hours of the morning and night…

Start with a Financial Health Assessment

initiatives are:   (1) becoming much more comprehensive and (2) demonstrating tangible business value.

In our own experiences with HR professionals, we see the expansion every day.  Wellness strategies are evolving and many employers are looking to better understand how employee money issues are impacting the productivity of their organization.

Sound overwhelming?  Well, it doesn’t have to be.

If you’re looking for a simple and cost-effective way to get your arms around financial wellness, we recommend starting with a financial health assessment. Think of it as a biometric screening of an employee’s financial health. Once you understand which issues are impacting employee productivity the most, you can confidently introduce programs that address the highest priority problems.  And, with an annual assessment, you can measure the progress you’ve made and demonstrate value.

Here are some important qualities that you’ll want to look for in an employee financial health assessment:

1. Be sure it addresses the complete financial picture. In addition to retirement, you’ll want to dig into credit/debt, personal protection and basic cash flow and budgeting issues.  Just as important is measuring the level of financial stress that employees are under which can have damaging impacts on productivity.  The Personal Finance Employee Education Foundation offers a Personal Financial Wellness Scale (free of charge) well suited to measuring financial stress.
2. Be clear about your intentions.  When it comes to something as personal as money, many employees may be reluctant to share information with their employer.  We recommend that employers only view the data in aggregate and be clear in communications with employees about what the data is being used for.
3. Keep it short and offer an incentive.  In addition to effective communications, keeping the assessment to 10 minutes in length and offering an incentive will really help drive participation rates.  Many of our customers have seen success with gift cards, deposits into a 401(k) or HSA and of course cash works too.
4. Reporting should be actionable – for employee and employer.  Upon completion of the assessment, an employee should receive immediate and easy to understand feedback about how to improve their personal situation.  For employers, it’s important to recognize that at the end of the assessment all you’ve got is data.  The hard part is in interpreting it.  Be sure that you have a capable team working with you that can benchmark the results, prioritize issues and provide you with actionable conclusions.
5. On-ramp to a full solution.  So, 37% of your employees are struggling with debt issues.  Now what?  You may want to choose an assessment provider that can offer an easy transition to education and services.

Benefits Communications Turn Risk Into Opportunity

As the economy improves, the tide may be turning once again according to several new studies.   Here are some key findings:

• Up to 60% of top performing employees plan to leave their organization within the next year
• In October 2010, the number of employees voluntarily quitting their jobs surpassed involuntary terminations
• Employees will be giving more serious consideration to new job opportunities than they would have in the past
• Employee engagement is at a historical low – some employees spend up to 50% of their time looking for another job

Think: risk and opportunity.

It’s time once again to use benefits as a strategic tool to keep your best employees and get new stars in the door. And don’t forget, your success is as much about how your benefits are communicated as the benefits themselves.

Employees Remain Cautious

according to the Q4:2010 Principal Financial Well-Being Index survey.  Here are some of the key takeaways:

• Half of employees did not feel better about their financial situation than they did a year ago. Nearly 40% of employees were still cautious about the economy.
• 72% of employees are concerned about their long-term financial future.
• Health care costs (65%) and economic uncertainty (59%) topped their short-term concerns.
• Living within their means (62%) and having an emergency fund (46%) were employees’ main priorities as they re-build their financial well-being.

While this data can be helpful as a benchmark, it’s always best to assess your own employees to understand their specific concerns and issues when it comes to money.   From this assessment, you can build the most effective financial wellness programs and have the greatest impact on the well being of your population.

Mega-Trends That Will Change Wellness Communication… Forever.”

Financial Wellness is a Key Component of your Wellness Strategy

Note trend #7, “Snacking well and saving well are connected.”  The study notes that smart wellness programs integrate financial and health literacy topics.  More and more, traditional health wellness companies and employers alike are beginning to recognize employee financial health issues as a key issue to address in a complete wellness program.

Tips for Benefits Communications

Luntz offered attendees some key tips by way of his 10 commandments of communication and 21 health care words for the 21st century.  Keep them in mind as you begin to think through your Open Enrollment communications strategy.

10 commandments of communication:

1. Simplicity
2. Brevity
3. Credibility
4. Consistency
5. Novelty
6. Sound and texture matter
7. Speak aspirationally
8. Visualize
9. Ask a question
10. Provide context/explain relevance

21 health care words for the 21st century:

1. Imagine
2. Hassle-free
3. Lifestyle
4. Accountability
5. Results
6. Innovation
7. Re-words: renew, revitalize, rejuvenate, restore, rekindle, reinvent
8. Efficient
9. The Right to…
10. Patient-centered
11. Comprehensive
12. Flexibility
13. Every/all
14. Compassion
15. Medical breakthroughs
16. Investment
17. Peace of Mind
18. Certified
19. Financial Security
20. A Balanced Approach
21. A culture of …

The Life Insurance Educational Challenge

• Make sure that employees and family decision makers have easy access to educational materials and enrollment forms
• Have enrollment specialists conduct on-site meetings that can explain the advantages of the plan
• Sharing real life stories that illustrate the value of the plan are highly effective
• Online tools and toll-free hotlines can help employees’ answer their specific questions before or after the enrollment meetings – thereby taking the burden off of HR staff

Remember that a program’s success has as much to do with your on boarding and educational processes as it does with your plan design.

• Since 2005, workers’ contributions to premiums have rose 47%, while overall premiums increased 27%, wages jumped 18%, and inflation spiked 12%;
  

  Higher Premiums, Less Comprehensive Coverage

• U.S. workers saw the cost of their health care coverage jump by 14% over 2009 rates;
• Employer contributions for family coverage remained steady, meaning companies are shifting more of the health care costs onto workers;
• Companies are raising the annual deductibles employees must pay before their health plans start to pick up the costs – 27% of covered workers face annual deductibles of at least $1,000, up from 22% in 2009, according to the survey results. Among small employers with 3 to 199 workers the number rose to 46% for such deductibles.
• 30% of employers admitted they reduced the scope of health benefits or increased cost sharing because of the economy.

The conclusion of this study, which was articulated by Drew Altman, the CEO at the Kaiser Family Foundation, is that with the economy struggling, business have been shifting more of the cost of health insurance to workers through premiums, deductible and other cost-sharing means.

Other notable findings included:

• 51% of employers surveyed saw an increase in employee wage garnishments
• 42% of employers surveyed saw an increase in employee emergency loans
• 34% employers surveyed saw an increase in employee requests for time off to deal with personal financial issues
• While 88% of employers provide retirement plan education, only 28% provide basic financial education on critical items such as budgeting, debt reduction and credit management.

One thing to focus on here is that 70% of survey respondents believe financial education is important and yet only 28% claim to offer a program.  What is the reason for this gap?

Employers surveyed cite cost, sacrificed work time to attend and higher priority competing items.  Let’s talk this through:

• Cost.  There has long been a misperception about the cost of financial wellness programs.  In our experience, companies can provide a financial wellness benefit for a cost equivalent to 1-2 employee lunches per year.  Not bad.
• Sacrificed work time.  A good financial wellness solution will offer online education (24/7 access), seminars and a financial coaching benefit.  All of these items can be made available to employees outside of normal work hours.  Even if these services are being used during work hours, it is likely far less than the time spent missing work and/or distracted on the job because of personal financial issues.
• Higher priority items.  While this one is hard to address without seeing the prioritized list, financial issues are likely one of the largest drains on productivity in organizations today.  A comprehensive financial wellness solution can produce an ROI to organizations of well over 3 to 1.