Want SuperEngaged members? Learn how your members think, feel and act

Want SuperEngaged members? Learn how your members think, feel and act

2 SuperEngaged

Surveys of engagement levels among super fund members usually reinforce the negative messages we know too well engagement is low, super is too complex, the pay day is too far away. Yet funds continue to spend considerable resources trying to engage with their members why? An engaged member is a more educated one capable of making better choices and, as a result, achieving the best possible retirement outcome based on their personal circumstances. To help super funds gauge the effectiveness of their product offerings and member campaigns, Towers Watson has developed SuperEngaged, an engagement survey that also provides a benchmark for the industry. In 2013, Towers Watson surveyed 2,000 super fund members across all industry sectors. The results demonstrated that, on the whole, fund members could be described as moderately engaged with their super a step-up from other surveys that typically score member engagement in the low or very low bracket. But what do the statistics mean and how can funds use them to develop and measure their own engagement strategies? Are results meaningful across the industry? Is it reasonable to compare one fund s score against another? By going beyond the headline figures, yes it is. Figure 01. Think, Feel, Act model What do we mean by member engagement? For almost 40 years, Towers Watson has been conducting employee engagement surveys for some of the world s largest organisations, including in Australia. Each year, we typically collect 250,000 responses from over 100 companies in Australia alone. We put our organisational psychologists and superannuation specialists together to develop a methodology, called SuperEngaged, that would measure fund member engagement based on the Think, Feel, Act model. The measures were not just focused on non-default activities, but designed to provide a deeper picture of engagement. We know that, with well-designed defaults, a highly engaged member may still not need to be very active. To be engaged, members must have: rational understanding of the super fund s products and services as it relates to them (THINK) emotional/affective attachment to their super fund (FEEL) motivation and willingness to actively interact with their super fund (ACT). RATIONAL Think ENGAGEMENT EMOTIONAL Feel Rational engagement occurs when members are aware of the basic information about their fund, as well as how its products and services can help them achieve their retirement financial goals. Engaged members will feel an emotional sense of belonging and attachment; they will develop a sense of pride in their fund and be inspired to use the products and services offered. They re willing to recommend their fund to others. MOTIVATIONAL Act The third and critical dimension is members willingness to interact with their fund. This ranges from using the fund s services (online or in person) to whether they would change or stay with their fund if they moved jobs, or if they would be happy to consolidate their multiple accounts. SuperEngaged 3

What are the insights for your fund? We report engagement scores on an overall index as well as its three sub-components (Think, Feel and Act), and this is important because the pattern of scores across questions and sub-components can vary considerably. We also report scores across different demographic groups, allowing funds to compare and understand engagement in different demographic cuts that fit their profile, be it by account balance, industry or age group. Some of our survey results provided very useful insights into fund members, their attitudes and behaviours. The table below outlines the broad categories that the survey participants fall into: Level of engagement Overall score Very low <55 Low 55-64 Moderate 65-74 High 75-84 Very high 85+ In our benchmark survey, we found that most super fund members are moderately engaged with their super with a score of 67. Members with an account balance exceeding $500,000 were highly engaged (with a score of 81) while those with an account of less than $10,000 or those surveyed who didn t know their balance at all, fell into the very low engagement category. Perhaps unsurprisingly, members under 45 years of age had low engagement, while those over 55 were highly engaged. This means that a fund s overall engagement score is likely to be highly dependent on its demographics. A fund with a lot of young members who have relatively low account balances would be expected to have a lower score and therefore needs to gauge its performance using those metrics rather than simply its overall rating. SuperEngaged moves beyond the headline engagement score in order to gain valuable insights into the effectiveness of the activities targeted to specific member groups. Without calibrating the results to take into account your fund s demographic profile, the engagement score achieved can be misleading and comparisons to other funds or a general benchmark will have less meaning. With this type of detailed engagement measurement in place, monitoring changes in a fund s individual engagement score and the underlying components over time will provide valuable feedback on the fund s performance across a number of key engagement sub-components, including: Attitude towards super and the fund Understanding of the fund and its offerings Satisfaction with the fund and its offerings Advocacy of the fund and its services Capabilities of fund members (perceived financial literacy) Participation in the fund s offerings. On a practical level, this will empower a fund to measure the effectiveness of its offerings such as its website, calculators, member communications and education activities, or whether the member s focus is on recent high or low investment returns. In our benchmark survey, we found that most super fund members are moderately engaged with their super with a score of 67. 4 SuperEngaged

What does a SuperEngaged report look like? Figure 02. Overall engagement score 100% SuperEngaged reports are fully tailored for every fund to provide a meaningful and relevant set of measures based on your own demographics. We work with you to source the required demographic information to enable the final report to provide as much relevant detail as possible. Figure 02 shows how engagement levels increase with account balances. Not surprisingly, the lowest level of engagement is reported by those members who don t know their super account balance. 80% 60% 40% 20% 54% 63% 68% 74% 78% 81% 88% 49% 67% SuperEngaged measures member satisfaction levels across a range of areas. In Figure 03 you can see that satisfaction with fund communication increases with age. These results can be compared to prior year results and to the benchmark to assist Trustees to measure the success of their communication campaigns and related activities from a member engagement perspective. <$10k $10k - $50k $50k - $100k Don t know Figure 03. Are your members satisfied with fund communications? 100% $100k - $250k $250k - $500k $500k - $1m Super fund balance $1m+ Prefer not to say The SuperEngaged benchmark (as shown in Figure 04) shows that 83 per cent of members with an account balance over $1 million would be likely to recommend their fund to family and friends. But only 38 per cent of members whose balance is $10,000 or less would do so. If your fund is primarily made up of members with low balances it would expect a much lower overall recommendation rate. 80% 60% 40% 20% 53.7% 57.9% 61.5% 78.7% SuperEngaged reports are fully tailored for every fund to provide a meaningful and relevant set of measures based on your own demographics. Figure 04. Advocacy 100% 80% 60% 18-34 35-44 45-54 55 years old and above Age 59.4% 62.4% 75.8% 83.3% 40% 38.2% 43.4% 46.6% 43.4% 26.6% 20% <$10k $10k - $50k $50k - $100k $100k - $250k $250k - $500k $500k - $1m $1m+ Don t know Prefer not to say Super fund balance SuperEngaged 5

Ask the right questions Not surprisingly, it s all about the questions. To shape the right survey we draw on our collective knowledge of engagement and combine that with our clear understanding of the issues and practices that are prevalent in super. To enable you to gain the most value out of the survey you will have the opportunity to get specific feedback on other fund offerings and issues, and you will be able to add up to five of your own additional questions to the survey. Reporting and analysis of these results will only be shared with you. Derive the insights How do you draw conclusions from the information and develop practical solutions for the issues raised? We can help you create clarity out of data. We will: Beyond the data After the survey, our experienced team of consultants can work with you to help you to decide where to focus, how to design the interventions you need to make, and to implement and follow-through with the programs you need to drive member engagement. A fund is only able to gauge its performance on engagement metrics if it can compare its results with a similar demographic in other funds. While we believe that the super industry can definitely benefit from an engagement model that can track the level of engagement of its members over time, and therefore the effectiveness of its various engagement programs, the model itself must be robust and able to account for various demographic influences on the results. Without this, any engagement results may have little value. benchmark your results across the full range of SuperEngaged participants benchmark your results versus prior results in years two and beyond categorise your results by your members demographics, to enable you to see areas of potential improvement within your fund for years two and beyond, provide you with the top five areas where your scores have improved versus prior years for years two and beyond, provide you with the top five areas where your scores are lower versus prior years....our experienced team of consultants can work with you to help you to decide where to focus, how to design the interventions you need to make, and to implement and follow-through with the programs you need to drive member engagement. 6 SuperEngaged

SuperEngaged 7

Further information For further information, please contact your Towers Watson consultant, or Lesley Brown Regional Practice Leader Asia Pacific, Employee Surveys +61 3 9820 9388 lesley.brown@ Richard Body Head of Technology and Administration Solutions, Australia +61 2 9253 3448 richard.body@ Towers Watson is a leading global professional services company that helps organisations improve performance through effective people, risk and financial management. With 14,000 associates around the world, we offer solutions in the areas of benefits, talent management, rewards, and risk and capital management. The information in this publication is general information only and does not take into account your particular objectives, financial circumstances or needs. It is not personal advice. You should consider obtaining professional advice about your particular circumstances before making any financial or investment decisions based on the information contained in this document. Towers Watson Australia Pty Ltd ABN 45 002 415 349, AFSL 229921 Copyright 2013 Towers Watson. All rights reserved.