Turning the Tide on Employee Engagement
A recent Gallup survey found engagement at work has cratered among U.S. employees. According to the research, only 33% of workers were engaged in 2023, representing nearly $2 trillion in lost productivity. The findings show lack of engagement among nearly every group except Baby Boomers, with older millennials and Gen Zers described as being in “dramatic decline.” Compared to four years ago, employees report feeling more disconnected from — and less satisfied with — their employers. They also express feeling less connected to the organization’s mission and purpose.
With engagement on the decline, this could lead to decreased productivity, higher turnover, lower profitability, and a host of other problems for the organization. With this in mind, the company’s retirement plan can be leveraged as a powerful tool to help increase engagement and combat many of the negative sentiments among today’s workers. A robust plan which incorporates some of the following elements can signify the company values its employees beyond their immediate output.
Recognize individual needs. Offer customizable plan options catered to different life circumstances. For example, consider giving employees the ability to allocate matching dollars toward student loans, an emergency savings fund, or a college savings account, depending on their personal preference.
Build trust. Plan sponsors may want to consider increasing their matching contributions or reducing a longer graded vesting schedule. In doing so, employees may perceive more immediate benefit recognition, which can cultivate a sense of being valued by their employer, boost morale, and increase loyalty to the organization.
Demonstrate long-term commitment. Help employees prepare for retirement at all phases of their career progression, from onboarding and enrollment to retirement and beyond. Measures could include stepping up efforts to keep retirees in plan, when this makes sense for the organization, and offering life-stage planning tools.
Encourage dialogue. Regular updates and education about the retirement plan can encourage ongoing communication between employees and management, making employees feel more heard, informed — and engaged.
Empower employees with more choice and clarity. Offering HSA or Roth options can provide employees greater control over their retirement savings. At the same time, it’s imperative not to give participants so many investment choices as this could become overwhelming for them. Include tailored options for participants’ time horizons such as TDFs, and organize investment menus around clear, easy-to-understand categories mapping their stage of life and financial goals. Establish multiple channels for participants to easily access information regarding enrollment and investment decision-making, including one-on-one advising, group sessions, written materials, and online education, as well as tools capable of catering to diverse learning styles.
Charting a New Course
With employee engagement on the decline, taking proactive steps to increase it can be important to maintaining productivity as well as recruiting and retaining talent. A good first step in determining which of these strategies may be most beneficial is soliciting feedback about the plan directly from employees — both formally and through informal conversation — to ascertain where there might be room for improvement.
By implementing these strategies, you can leverage your retirement plan to address the root causes of disengagement and create a more motivated, loyal, and productive workforce. Our team of Trusted Advisors is here to guide you every step of the way, ensuring your plan is optimized to drive meaningful engagement and positive outcomes for your employees. Reach out today for further assistance.
Sources
Harter, J. (2024, January 23). In New Workplace, U.S. Employee Engagement Stagnates. GALLUP. https://www.gallup.com/workplace/608675/new-workplace-employee-engagement-stagnates.aspx
Thier, J. (2024, March 5). Engagement at work among elder millennials and Gen Zers is in ‘dramatic decline,’ new Gallup poll says. FORTUNE. https://fortune.com/2024/03/05/gen-z-elder-millennials-disengaged-gallup-poll-genx-boomers/