Engaging staff via social media

Pensions Week
May 2010

The challenges keep mounting. The economic situation is improving, but slowly. A coalition government may foster a culture of uncertainty, and we're seeing constant change in pensions. It's difficult for employers and employees to keep up - and that's not a good environment for employee engagement in their pensions.

Arguably, the biggest group at risk are the young people that work for companies. A potential solution for this group might be to use social networking tools to improve engagement levels with their pensions and employee benefits packages.

Times are still tough

Employers and employees have had to survive a difficult environment in the past few years. But the challenges they face aren't insurmountable; and when it comes to social networking, companies are thinking along the right lines.

On a macroeconomic level, we've had a perfect storm: a deep recession, banking crisis, an ageing population, a growing pensions savings gap and the impact of globalisation on manufacturing industry. Governments, employers and employees alike are facing difficult decisions. People are unsure about their job prospects and mistrust our key institutions (banks and the government).

So how has this played out in the workplace? Cheap credit has created a contingent of people with debt problems. A survey by the Life Academy revealed that, of employees admitting to financial difficulties, 45% said it had adversely affected their personal relationships, while 89% claimed to worry about that debt "most of the time". An employer must have an altruistic concern for the wellbeing of employees. In addition, the survey revealed 42% of people with financial difficulties admitted they had taken time off work as a direct result. That becomes a commercial concern, with absenteeism undermining productivity. This problem adds further pressure to businesses that are already trying to contain costs and increase efficiencyto survive the global downturn.

Perversely, there is good news. Attitudes to saving appear to be changing. People are starting to pay off debts and save in a more disciplined way. Ironically, our collective insecurity following the credit crunch and more stringent terms employed by lenders could result in us becoming a nation of savers.

More good news comes from a survey of key decision-makers in employer-run pension schemes. Of those interviewed, 79% felt employers have a responsibility to support employees in understanding the real value of their pensions. There is a clear link between financial capability, economic wellbeing and quality of life - so ensuring people are empowered to make informed choices makes good commercial sense too.

New problems need new solutions

We need to engage people on their terms and rebuild confidence in financial services. As such, social networking is a new opportunity we should embrace.

It's a medium of communication that has seen a remarkable rise. Facebook has 400 million users, and has been used for campaigns as far reaching as installing Rage Against the Machine instead of The X Factor's Joe McEldery as the Christmas number-one single, to the 'Tea party' movement challenging Barack Obama's policies. Twitter is used by countless celebrities, even politicians, to 'live their lives out loud'.

At the vanguard of this movement is Generation Y. This is fancy term for anyone born between 1982 and 1995, and will be the next wave of change to hit the workplace. They will create a new working culture: work will be something they do rather than go to; they will be transient and accept they may have several employers and careers. When economic recovery becomes entrenched, the increased mobility of the workforce will eventually lead to employers competing for talent. Gone are the values of loyal baby-boomers, who by nature were less entrepreneurial.

Employers need to consider this as the new norm and use it in their pension engagement strategies. Only then will they be able to motivate Generation Y to recognise the value of its pensions, and act on it.

But how to do this practically? The traditional transactional relationship between employer and employee will remain. But it needs to be complemented by online opportunities that allow for ongoing discussion, both between employees themselves and to provide insight for the employer.

There are, of course, risks around encouraging public debate; dissent within the workforce can lead to unfair criticism. But it also provides a real opportunity to improve transparency and trust, deal with urban myths, correct inaccuracies and make changes on the advice of staff. That can only be a good thing for engagement.