Personalizing Retirement Solutions: 4 Steps Toward Increasing Employee Engagement

We live in a world where everything is personalized to our preferences—whether it’s when we order pizza, buy shoes, or even purchase a car. Research shows that personalization helps build trust and encourage action. Personalizing retirement solutions, through employee communication and plan design, is going to be critical for helping to increase employee engagement and to encouraging positive progress.


1. Personalize Your Plan’s Communications

Creating more effective communications for your plan starts with segmenting your population. You can begin sorting by simple factors like age, then explore more from there—perhaps considering gender, balance history, and even tenure. Segmenting into employee groups will allow you to create effective messages for the particular people at the optimal time, delivered through the most appropriate channels. The more you learn about how these various segments respond to certain communications, the better you’ll be able to fine tune your communications and optimize your budget

2. Test, Learn and Improve Employee Engagement

Personalized messages require a bit of trial and error so you can learn what works and what doesn’t. For example, the timing of a message can have a big influence on whether an employee takes action. So, it’s worth testing what happens when you send the same email at different times to learn how employees will react.

When it comes to communication, small variations can have a big effect. You can test different wording, adding a logo, setting a deadline, including a giveaway, and removing obstacles to action. For example, we changed the subject line on an email from “Start Today” to “Get My Account.” The result was a 42% increase in usage.

Experiment with your communications to learn what works and what doesn’t with your specific employee population. You are going to get things wrong, but you will most likely improve employee engagement with each experiment.

3. Personalize Your Plan’s Investments

Personalization also can make your plan design more effective. For example, your fund line-up should align with the financial literacy of your employees. If your workforce has a low level of financial literacy, you may want to limit your lineup to eight to 10 core funds that represent the primary asset classes. That way it is much easier for employees to achieve an effective asset mix, even if they aren’t confident in making financial decisions. If you have a population with a high level of financial literacy, then 15 to 25 funds might work, and you may want to include sophisticated asset classes, such as commodities and world bonds.

4. Customize Retirement Solutions: Custom Target-Date Funds

Target-date funds are another investment that can be tailored to your employee base. Off-the-shelf target-date funds have been hugely popular in defined-contribution plans. But their significant weakness is that they have a one-size-fits-all investment approach that may not properly address the needs of your employees.

To solve this, many plans create custom target-date solutions with investment approaches that are personalized for the needs of their workforce and adjusted annually to reflect shifting demographics. Check out our previous blog post for more detailed examples of tailoring retirement solutions to employees.

Whether you use customization to create better communications or improve the design of your plan, it’s an area ripe for innovation. The rewards of personalization can be high because minor changes can result in significant positive effects for your employees.


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Lacey is the team lead focused on B2B demand generation for Morningstar’s growing Workplace segment. This includes responsibility of marketing strategy and execution with plan sponsors and key providers to expand Morningstar’s market reach. The Workplace umbrella includes financial wellness and retirement products for employees as well as custom models and fiduciary services. With products, services and thoughtful marketing, we strive to empower companies to help employees build financial wellness today and get ready to retire when the time comes.

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