Gamification Retirement Planning Engages Employees
Gamification retirement planning is on the rise. It has become the latest way to inject fun into retirement planning today; a task, admittedly, many workers find daunting. Gamification retirement planning is the process of applying gaming concepts to a traditional non-gaming situation. For example, gamification takes something that already exists — say, a workplace retirement plan — and incorporates game mechanics to stimulate participation, engagement and loyalty.
The New York Times recently ran an article showcasing several instances where gamification retirement planning has been successful in the workplace retirement plan space. The State of Hawaii hosted an Aging Booth at its benefits fair, which showed attendees what they would look like when they’re older. The idea, according to the Times, was to “get employees to think more concretely about their future, older selves — and motivate them into making financial plans.” Research has shown that individuals who come face to face with their “older selves” (metaphorically speaking) and actually visualize themselves living their ideal post-work lifestyle tend to contribute more to their retirement savings.
Having the opportunity to envision their future selves can be fun for employees, and that is exactly what employers are hoping for. In fact, growing numbers of employers are attempting to entice workers to boost their retirement savings by using computer programs to artificially age photos, as well as using games and quizzes to engage them on retirement and financial topics, according to the Times. In some cases, gamification retirement planning seems to have a more significant and positive impact on engaging employees than traditional methods, like brochures and spreadsheets.
In addition, the Times cited a competition created by TIAA, called Square Up Your Savings and Financial IQ, which is hosted at more than 7,000 plan participant offices nationwide. Men and millennial employees showed the greatest engagement, according to TIAA, with men logging 40% and millennials logging 50% more clicks than other demographic groups. What’s more, the gamification retirement planning seemed to be a hit with millennials in particular, with employees age 24 to 34 logging eight quizzes per player, TIAA reported. For some employees, the quiz displayed gaps in their financial knowledge and awakened their competitive side. As a result, some played gamification retirement planning modules daily in an attempt to improve their scores. Talk about successful engagement!
Other major players in the retirement plan space have incorporated gamification retirement planning into their participant engagement programs. Prudential’s Procrastinator Quiz helps people identify why they put off making critical decisions about retirement planning. Voya Financial offers a virtual game board as the backdrop for its quizzes, tools and information to make retirement planning more fun and interesting.
Gamification retirement planning might be impactful when it comes to addressing America’s retirement savings woes. Federal Reserve data cited by the Times illustrates just how serious an issue workers face. In a survey of 12,246 individuals, the Fed found that less than two-fifths of non-retirement American adults described their retirement savings as on track, and a quarter had no retirement savings at all. What’s more, three-fifths of non-retirees reported “little or no comfort in managing their investments” in self-directed retirement plan accounts. In addition, those surveyed by the Fed answered, on average, fewer than three of five basic financial literacy questions correctly. There is clearly significant work to be done when it comes to educating Americans about their finances, especially retirement planning. Gamification retirement planning is one way to get it done, as it is a fun, less “serious” way to engage individuals on what many perceive to be a confusing and arduous process.
Not everyone is on board, though. Introducing gamification into the retirement planning process is not a panacea, and some skeptics doubt its effectiveness, the Times notes. A collaborative study from the Harvard Business School, the Federal Reserve Bank of Chicago and Wellesley College, found “no effect” on savings and investment behavior after people had taken mandatory financial literacy courses. A source from Duke University quoted in the Times claims that financial literacy is all about information, and the information is not enough to move the needle. It’s probably fair to surmise that information alone isn’t enough to improve retirement outcomes. However, sharing and delivering information does accomplish an important objective — it engages employees and brings them into the conversation while making retirement planning less stressful, and less of a snooze fest.
Employers might do well to incorporate gamification retirement planning into their retirement programs. It’s worth raising the conversation and exploring the options with retirement plan service providers. Keep in mind, however, gamification retirement planning is designed to engage employees with the retirement plan. It can also help boost plan awareness, participation, and savings rates — all worthy objectives. That said, it’s important to manage expectations and understand that gamification alone is not an all-encompassing solution. Gamification retirement planning is one component of a winning strategy that should also include financial literacy and mechanisms for holding employees accountable for their goals.