Engaging employees with benefits is hard. Because of the disconnect, many are putting their future finances at risk.
For employers, this leads to challenges like managing inactive accounts and lost productivity. Bridging this gap requires innovative, easy-to-use solutions that simplify retirement planning and inspire participation across the entire workforce.
Why Retirement Savings Feel Out of Reach
For many workers, saving for retirement feels confusing or not important right now. Some don’t understand their options due to financial literacy gaps, while others focus on day-to-day needs. Employers face challenges, too, as many employees prioritize higher pay over long-term benefits like contributing to their 401(k).
Only 53% of small and midsize employers offer retirement plans, and 93% believe their workers care more about paychecks than saving. This gap is even bigger for minority groups, who often face more financial insecurity.
Outdated and complicated processes make it worse. According to Meenakshi Lakshmanan, Co-founder and CTO of Manifest, many retirement account transfers still rely on manual paperwork and phone calls, with delays lasting up to 60 days. Over 16 million people with employer accounts switch jobs yearly, but 89% of transfers are never completed.
Approximately 41% of U.S. employees cash out their 401(k) savings when leaving their jobs. 401(k) leakage undermines long-term wealth accumulation and retirement security.
Why This Matters to Employers
Employers face significant challenges when employees don’t engage in retirement planning. Old accounts left behind by former employees increase administrative costs and create extra work. For current employees, low participation in benefits can reflect poorly on the company’s ability to support their financial well-being, making it harder to retain talent.
However, when employees engage, both sides benefit. Participating workers are more likely to consolidate old accounts, boosting savings and reducing the stress of managing multiple accounts. For employers, increased participation means higher AUM, improved plan health, and a workforce that values the benefits offered. Engaged employees can see their account balances grow 36% over ten years, while employers benefit from a half-reduction in cash-out risks.
Improved engagement also helps companies stand out as attractive employers. Offering meaningful retirement benefits—and ensuring employees take advantage of them—can differentiate businesses in competitive job markets.
Practical Steps to Engage Diverse Employees
Engaging employees in retirement plans doesn’t have to be complicated. While every workforce is unique, these practical steps can help you connect with employees, increase participation, and make a lasting impact.
1. Simplify Communication
Retirement benefits often come with complex jargon that can discourage employees. Use clear, concise communication focused on the benefits they’ll receive, such as long-term savings growth or reduced fees from consolidating old accounts.
2. Make It Easy
Employees are more likely to participate when the process is quick and convenient. Tools like Manifest streamline retirement account transfers, reducing the time and effort needed. For example, Manifest reduces the transfer process from 60 to 14 days, with only seven minutes of active employee effort. Making participation painless removes a significant barrier to engagement.
3. Provide Education
Many employees lack a clear understanding of how retirement savings work. Offer workshops or webinars to explain the basics in a relatable way. Address common misconceptions and show employees how small steps today can lead to significant benefits.
4. Offer Incentives
Motivating employees through small rewards or recognition can encourage participation. For instance, employers might offer gift cards or additional contributions for employees who consolidate old accounts or attend retirement planning sessions.
5. Invest in Accessibility
Employees need tools and resources that fit their lifestyles. Mobile-friendly platforms, materials in multiple languages, and culturally relevant communication ensure more employees feel included. Solutions like Manifest are accessible 24/7 on any device, allowing employees to take action whenever convenient.
Addressing Generational Differences in Retirement Planning
Generational differences significantly affect how employees view and approach retirement planning. Younger and older employees face unique challenges, and employers can boost engagement by tailoring strategies to meet their needs.
1. Low Savings Across Generations
Half of U.S. households with someone aged 55 or older and two-thirds of working millennials have no retirement savings. This lack of preparation highlights the need for targeted efforts to encourage saving at all career stages. Employers can address these gaps by simplifying enrollment processes and promoting participation in retirement plans.
2. Challenges Millennials Face
Millennials, who entered the workforce during the Great Recession, often struggle with financial stability. Nearly half live paycheck to paycheck, and only one-third of eligible millennials participate in available retirement plans. Employers can help overcome these barriers with auto-enrollment, employer matches, and financial education programs that make saving more accessible. However, it can be expensive to invest in better plan offerings. Manifest is free to make retirement savings more accessible for those who need it most.
3. Longer Lifespans Require Early Planning
Life expectancy has risen significantly, with many Americans living in their 80s and beyond. Younger employees must understand how starting early can reduce the risk of outliving their savings. Tools that visually demonstrate compound growth can make the benefits of early saving more tangible, motivating younger generations to prioritize retirement planning.
4. Avoiding Over-reliance on Social Security
As Social Security faces funding challenges, employees across all age groups should be encouraged to build personal savings. Employers can help by offering robust retirement plan options and educating employees on why relying solely on Social Security may not be sufficient for long-term financial security.
5. Actionable Solutions for All Generations
Employers can drive engagement by reducing waiting periods for retirement plan eligibility, offering matches to encourage contributions, and providing user-friendly tools like Manifest. These steps improve participation rates and help employees feel more confident about their financial futures.
How Manifest Supports Employers
Retirement planning can be a complex challenge for employers and employees alike, but Manifest simplifies the process, making it efficient, engaging, and impactful.
- Simplifying retirement account consolidation: Employees often leave old retirement accounts behind when they switch jobs, causing confusion and extra work for employers. Manifest helps employees easily find and combine their old accounts using just the name of a previous employer. Our concierge tool empowers participants to finish transfers in minutes instead of months, putting them back in control of their savings.
- Saving time and money for employers: Inactive accounts from past employees can cost employers time and money to manage. Manifest moves those accounts into active plans, reducing costs and admin work. Our partnerships with top retirement providers make transfers quick and easy so employers can focus on improving their benefits programs.
- Increasing engagement and participation: Manifest makes retirement planning easier for employees, leading to better participant outcomes. On average, employees who use Manifest grow their account balances by $13,000+. This encourages more participation, reduces cash-outs, and builds stronger engagement with retirement programs, which benefits both employees and employers.
- Delivering better results with data: Manifest uses data to improve outcomes and quantify the impact employers drive for their participants. Higher account balances and better participation aren’t just numbers—they show how consolidation helps employees manage their savings while helping employers reduce inefficiencies.
- Making retirement planning easy for everyone: Many employees find retirement planning complicated, but Manifest keeps it simple. Even less engaged employees can quickly take action to consolidate accounts and grow their savings. This helps everyone stay on track for the future while making employers’ lives easier.
Empowering Your Team
Engaging every employee in retirement planning is essential for building financial security and fostering long-term stability for your plan sponsors. By removing barriers and simplifying the process, employers can create meaningful connections with all employees—especially those who are hardest to reach. Manifest makes this easier by streamlining retirement planning, increasing participation, and reducing costs.
Manifest makes saving more accessible, helps teams focus on long-term goals, and improves benefits programs that make real impacts. Every single employee becomes one of the best investments plan sponsors can make.
