Having an effective employee engagement strategy is one of the most important components of running a successful retirement plan. Plan sponsors need to review year-end demographics and segment the participants to see where the greatest impact can be made for the new year. The impacts of plan design, plan management and investment solutions are all reduced without a good education strategy.

Engaging employees involves three major factors. First, plan sponsors need to understand the different employee groups. Based on age and gender, employees have different demands and needs. It may also be a good time to get a little feedback from employees by doing a survey of financial topics that are of interest to them. It may be talking about financial topics that are related to the plan but are driven by financial stresses that employees are going through. Therefore, plan sponsors will need to craft different messages that will reach the largest group of employees.

Second, communications to employees need to be brief, concise, relevant and easily understood in this fast-pace world. Employees today are getting information from so many sources that it can easily get caught in all the noise of the day. This will require the message to be of interest and intrigue employees, but it should also give them some actionable steps that are simple to understand and that will not take much time to implement. This may require the plan to embrace technology with vendors as well as look at options with social media and plan websites.

Third, use of guidance and or advice gives another touch for employees. Employees more than ever tend to be passive toward retirement planning until later in life, and this gives them a touch of what they need to get to the finish line. Guidance can educate and inform employees about the plan’s benefits, and advice can get them to implement decisions that may enhance their retirement outcome. As we have seen the popularity over the years of “auto this” and “auto that” it is the inertia of getting the employee started that can help the employee get on track with their retirement savings.

Relevance is the key to successful employee engagement when it comes to education. Knowing the demographics of your clients’ employees will help build the education plan that is relevant to each group of employees. No one solution will reach every employee or be relevant to them, so it will take being creative and using different technologies to reach and engage them today. March madness is right around the corner, and it gives you a chance to be the game changer this year.

Ludwig, ChFC, AIF, CRPS, is an LPL Financial adviser with LHD Retirement. Reach him at jludwig@lhdretirement.com.

This information was developed as a general guide to educate plan sponsors, but is not intended as authoritative guidance or tax or legal advice. Each plan has unique requirements, and you should consult your attorney or tax adviser for guidance on your specific situation. In no way does advisor assure that, by using the information provided, plan sponsor will be in compliance with ERISA regulations.

Securities and Advisory services offered through LPL Financial, a Registered Investment Advisor. Member FINRA/SIPC.

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