This is one of the best opportunities you are ever likely to get to change the way your employees think about reward - so make sure you make the most of it.
While the administration and compliance challenges around auto-enrolment are considerable, companies that focus on simply ticking the right boxes are missing a trick. Where you can add real value is not in the postponement notices and scheme information - it is by starting a meaningful conversation with your employees about the total value of the reward package you offer.
Valuing reward
The Pensions Regulator has said that it expects to see at least 75% of employees enrol into a pension scheme as a result of auto-enrolment. Any organisation that has implemented a benefits package will know what a challenge that represents. It is not enough to rely on employee apathy and hope that low opt-outs will get you to that level. That approach is likely to result in your payroll and HR teams being inundated with queries as soon as people see their take-home pay reduce by the amount of their contributions.
A more sensible approach is to plan a creative and engaging communications programme to ensure your employees understand and value their new pension in the context of their total reward package.
Targeted, individual messages
Build your strategy around the needs of your individual employees. If you already have a benefits programme in place, you will know which of your employees are actively engaged with their benefits and which are not. These two groups will need different communications plans.
Next, think about your employees' needs and access to information. Where do they do their work? Do they all have access to computers - and if they do, do they like to use them? What are their learning styles? Do they all have the vocabulary and understanding to discuss pensions and benefits?
Having answered these questions you will understand your starting point, be able to set objectives and have a clearer view of which communications channels will be appropriate. It is essential that you check progress as you go. If you leave your employees behind at any stage, they may struggle to catch up. We recommend a three-stage process:
Stage 1) Raise awareness
Start raising awareness at least six months before your staging date. Your strategy should focus on alerting your employees that you need their attention for something important. This is a time for creativity and surprise, not detail. It is possible that some people will not find pensions particularly exciting, so combining the announcements with other things, such as health and wellbeing benefits, discounted retail vouchers and bikes to work may help to engage the employees in the whole process of employee reward.
Stage 2) Take responsibility
This stage takes at least three months. Your employees need to get across the detail of the options available to them, the implications of their choices and how pensions interact with other benefits. For auto-enrolment, they need to take responsibility for their retirements. Depending on the make up of your wider reward programme, you could also look to build responsibility for health and wellbeing, for protecting dependents or for maximising the value of their take home pay - will you introduce salary sacrifice for pensions and/or other benefits?
At this stage, understanding learning styles is key to successful innovation. Active and theoretical learners, for example, respond to very different types of communication and the channels and delivery methods you choose need to reflect the learning styles in your organisation.
Stage 3) Take action
Allow around one month for your employees to take action. Early take up is a good leading indicator for engagement, as employees who value their benefits, feel able to take the time to select their options.
Employees that prioritise their benefits selections feel more valued by their employer. This has a direct impact on motivation and productivity, generating a return for what will be a significant pensions investment.
The final message is: do not stop communicating once your staging date has been reached. Pensions and benefits will continue to be an important part of your employees' remuneration package for many years to come, so do not lose momentum once you are up and running with auto-enrolment. Use the platform you have created to keep the communications going and make sure that your employees appreciate what you do for them - in 2013 and beyond!
John White (pictured) is head of financial management at RSM Tenon
