Thursday, April 2, 2015

The Best 401(k) Communication Ever

A little over a week, I heard a talk about the best 401(k) communication campaign to employees ever. It didn't have that title. The speaker who was instrumental in developing the campaign didn't claim it was the best ever. But, I think it is.

In 30 years in this business, few things have remained constant. Rules have changed, employee and employer attitudes have changed, benefits programs have changed, and cost sharing has changed.

One thing has not changed.

In 1985, I saw the results of a survey of employees in a variety of companies nationwide. The question that I focused on asked these employees how they liked to receive their communications. The winners in the survey by a large margin were from either their supervisors or from their peers. In my opinion, and I feel pretty strongly about this one, that hasn't changed.

Generally, you think about people like that as being like you. HR is often thought of as just being part of that corporate ivory tower. The recordkeeper/TPA is viewed as having something to sell. External professional communicators rarely understand the culture of the organization, and even if they do, they are often going with glitz and glam in an effort to justify the fees they are charging.

Suppose you keep it simple.

Suppose you use your own employees to keep it simple.

The company that I heard about has a fairly traditional 401(k) plan. Its employees are diverse. Many do not speak English well or at all. While the company compensates its employees well for their jobs and geography, these are generally what most of us would think of as pretty low-paid workers. They don't have discretionary income. Most of them are shift workers as the manufacturing company runs 24 hours per day.

So, what did the company do? What did the young Manager of Employee Services do? She found employees who would support the 401(k) plan. She developed communications around the 401(k) plan. And, she scheduled employee meetings catering to both English and Spanish speakers, catering to first, second, and third shifts, and catering to lower paid line workers and to higher paid engineers.

She didn't run the meetings. She is corporate. The message needed to hit closer to home.

She found employees in the workforce who she thought would be well-suited to deliver the right messages. She found people who could come across as credible in their peer groups. They would be her communications team and she trained them to deliver the message.

The results were astounding. Employees took an interest in their plan. Levels of participation increased. Levels of deferrals increased. Employees believed the message from people they work with. They stayed after work to hear the messages. In many cases, their spouses joined them. They are now in a better place on being on the road to retirement some day.

The company kept it simple. The company kept it credible. And, the company didn't have to spend a bunch of money on this campaign.

Effective communication doesn't need to be complicated. In fact, more often than not, it shouldn't be.

P.S.: This was the speaker's first time presenting at a conference. She was pretty nervous about it. I told her that after I heard it that I would give her honest and constructive feedback. The only feedback that I could give her was this: "I would hire you ... in a heartbeat."


  1. Hurray!
    Let’s applaud this innovative, unnamed manager for having the courage and insight to not to do the ‘what everyone else is doing’ approach to 401k education.
    For 30 years, the retirement industry has used financial experts who were not trusted by the audience to tell unsophisticated and not-yet-motivated adults what to do. Moreover, the industry ignored accepted adult-education principles.
    Roughly 2,500 years ago, Socrates—a Greek philosopher remembered for the Socratic Method—understood that telling isn’t teaching. He looked for ways to get students engaged in the topic so they would think about how the content was important to them.
    The retirement industry’s 401k education has become the largest failure ever of any adult education program.
    Plan sponsors, it’s your choice. Should you continue to using participants’ money to pay the retirement industry for the failed education that does not specifically define what successful 401k users need to know to get a good start and has no learning success measures? Or should you, like the manager in the above story, try a thoughtful approach that is not a proven failure?

    Dennis Ackley

    1. Dennis,

      Thanks for reading and commenting. Just so that you and anyone else reading this knows, the person in this post is a real person and her campaign was real as well. She remains unnamed because I don't have her permission to use her name.

  2. Thanks for sharing. This is a very interesting post!