How Plan Sponsors Can Best Communicate With Participants

Experts suggest plan sponsors use direct and personalized messaging when communicating about benefits.

If plan sponsors are struggling to engage their participants and find that employees are not fully taking advantage of the benefits offered to them, there are a variety of strategies they can use to improve communications.

Megan Yost, the senior vice president and engagement strategist at Segal Benz, said one way for plan sponsors to build trust with employees is to “be direct and communicate frequently.”

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“Sometimes when there’s an absence of communication, participants can create their own stories about what might be happening in the organization,” Yost says.

A 2022 LIMRA study, Benefits and Employee Attitude Tracker, revealed that 60% of employees felt employer communications on benefits were ineffective.

Based on the study’s findings, LIMRA says one way plan sponsors can improve employees’ awareness of their benefits package is by providing information on a regular basis throughout the year—not just when open enrollment comes around.

The LIMRA research also revealed that workers typically spend less than an hour reviewing and enrolling in their benefits during open enrollment, which they argue is not nearly enough time to fully digest the material.

Yost says it is important that plan sponsors are aware of the financial literacy levels of their employees and make sure sponsor messaging is clear and understandable for everyone. She recommends hosting online focus groups or employee resource groups, which target specific communities of workers, to ask people what they are struggling with and gauge whether the benefits being offered are meeting their needs.

David Swallow, the senior managing director and head of consultant relations at TIAA, says using a “multi-channel approach” is an effective way for plan sponsors to communicate with participants. This means using videos, webinars and emails to showcase benefits an employer is offering, as well as face-to-face meetings.

Swallow emphasizes that plan sponsors should focus on “meeting participants where they are.”

“[If] you have a younger generation of participants, how you engage with those folks is different than how you engage with more senior or tenured folks,” Swallow says.

As people tend to have short attention spans, Swallow also suggests that plan sponsors provide information briefly and stay away from overly complicated, detailed messages about benefits.

Measuring the Effectiveness of Communications

According to Swallow, plan sponsors should look at web traffic and email click-through rates to see how much their participants are engaging with communications they send out. Swallow says analyzing this data can help plan sponsors see if employees are even reading the material.

“But to really measure the effectiveness, we look [at] how many people are taking action [and whether] they are taking the right actions,” Swallow says.

Because of the volatile investment market, Swallow says it is important to assess whether people are making decisions that are reactionary or will benefit their long-term retirement savings.

Yost suggests that plan sponsors evaluate participants’ balances in their 401(k) and 403(b) plans to determine demographics that may be less engaged with their benefits. If a certain demographic tends to have a lower balance in its retirement plans, this can be a signal to plan sponsors to adjust their communication method for that specific group of people.

New and Creative Ways To Engage

Over the last several years, Yost says recent trends show that plan sponsors are opting for more digital communications, as opposed to blasting out printed documents and flyers.

Segal Benz, an employee benefits and HR consulting firm, recently held a conference in which representatives from the companies BlackRock, Krispy Kreme and PayPal shared some of the ways they adjusted their benefits communication strategies during the pandemic, when most people were working remotely.

For instance, BlackRock started using a variety of digital pieces such as banners, screen savers and infographics to steer people to the company’s benefits website. Krispy Kreme launched a benefits microsite that completely replaced the need for its printed benefits guide, and the site is accessible on a mobile device or browser outside the Krispy Kreme firewall.

PayPal also replaced its annual enrollment fairs with virtual “Ask Me Anything” sessions and HR training during the pandemic.

Besides using digital techniques, other plan sponsors have taken a personalized approach to their communications. In September 2022, Delta Air Lines sent personal messages to its employees, showing a snapshot of each individual’s plan retirement plan balance compared to what a target balance is for someone their age.

If the individual’s balance was below the target, the statements provided suggestions to get closer to that target amount.

Swallow says using this personalized strategy is a good way to get people engaged, because they can relate more to the material they are seeing. But he also points out that a company like Delta Air Lines has a large HR and benefits staff and has the resources to implement more personalized communications.

For plan sponsors who want to implement these types of customized communications, Swallow recommends they partner with their recordkeepers or consultants.