Plan Sponsor Profile | Published in June 2017

Meeting Participant Goals

Hospitality industry plan sponsor introduces one-on-ones with HR to up participation

By Judy Faust Hartnett | June 2017
Art by Chris Buzelli

Plan Sponsor:
John Q. Hammons (JQH) Hotels & Resorts, Springfield, Missouri   
Key Player:
Gay Lynn Hearst, corporate director of benefits   
Participation Rate:
Average deferral rate:

“The hospitality industry has a high turnover rate, our executive management is very traditional, and our employee base is very diverse—in age, culture, location and type of worker,” says Gay Lynn Hearst, corporate director of benefits for John Q. Hammons (JQH) Hotels & Resorts, which owns and manages 35 hotels nationwide.
That employee base presents many obstacles to encouraging 401(k) plan participation, so the company, headquartered in Springfield, Missouri, became creative in its approach to engaging its staff.
Beginning in 2005, when the company owned and managed 78 hotels, “Individual property managers would receive a bonus if they reached and kept their property[’s] plan participation at 70% or greater by year end,” Hearst says. “The first year-and-a-half, we went from 21% up to 70%; it gave us momentum, and it was great.”
At some properties, the general manager (GM) typically relies on human resources directors (HRDs) to communicate and educate associates, but at most the GM works personally with associates. It was noted, Hearst explains, “with properties that have high participation, both the GM and HRD had spoken with the associates personally about their retirement plan.” “If the GM and HRD are personally sold on our retirement plan, then it flows through their property to the line-level associates.”
During and after the 2008 through 2011 financial crisis, associates were concerned about their 401(k) plan and accounts, Hearst says, adding that, because the hospitality industry is one of the first to go down and one of the last to recover, the participation in the plan decreased and company stopped offering the participation incentive to managers.
The previous practices for enrolling participants had worked well for just over half of the group for several years, but Hearst and her colleagues decided to look at the employees not contributing to the plan and see what obstacles needed to be identified and overcome. “We found several,” she says. “Our Hispanic associates have a culture that does not encourage saving for retirement; the 59-and-a-half and older associates were not saving because most felt it was ‘too late’—they didn’t realize that, at retirement age in our plan, they can make withdrawals without the extra federal penalty; the younger group and the hourly associates needed to be educated on the saver’s tax credit; [and] associates who said they would begin to participate most times would not follow through.”
Most of the company’s education communications are designed in-house, but, Hearst says, “Advanced Capital Group, our advisers, and Milliman, our recordkeeper, created a vignette for us, in both English and Spanish, to use when sitting one to one with associates who are eligible but not deferring.” The HRD, GM or both then hold special one-on-one meetings with these associates to discuss the specific communications.
The HRD inputs the date of the meeting with the associate, and indicates whether he decided to participate, on a list that all HRDs can access. Hearst says, “It really puts a responsibility on the HRD to take ownership and allows all other HRDs to see who is successful. We urge lower-participating properties to call successful-property HRDs and GMs, to get ideas for overcoming obstacles they have in educating their associates.
“We try to dig as deep as we can until we strike a chord with the associate or we know they just simply cannot contribute. We keep ourselves from being pushy, but we rally behind the fact that 401(k)s really are one of the best benefits of employment,” Hearst says. We have implemented and, to this day, see increases with the groups that we campaign to and educate.”