When making decisions about plan design, investment menu lineups and financial wellness benefits, leveraging demographic information and properly collecting that data is a key piece of the puzzle, according to panelists who spoke at PLANSPONSOR’s Roadmap Livestream event on Tuesday.

At the session “Check Your Demographic Mirrors,” Pam Hess, the executive director of the DCIIA Retirement Research Center, said while most plan sponsors have access to foundational participant data, it is valuable to peel back more layers to fully understand employee demographics and attitudes.

“I think of all the data elements like a house,” Hess said. “The first floor is like some of the basics: age, gender, income, tenure … data that most employers have access to. The second floor can add in some nuances around marital status or race. Not everyone has a second floor, but it’s certainly aspirational. The third floor is like the cobwebby attic, and it’s [understanding] financial wellness. It’s so important, but maybe it’s not well-understood or explored.”

Hess said focus groups can provide more nuanced demographic details, and conducting surveys is an effective way of gathering information. But she said to be wary of outright asking people to submit their demographic information in a survey, as many fear how this information will be used and might be hesitant about sharing too much information with their employer.

Conducting a financial wellness study that embeds straightforward questions about demographic information is a strategy that Hess recommended. She added that it is important for the plan sponsor to be transparent with participants and communicate why they are asking for this information.

An optimal time to gather information is usually at the time of hire or during annual open enrollment, Hess said. If an employer is conducting a survey, she said it is also important that there are no firewalls blocking people from taking it. Incentivization, such as offering people the chance to win a gift card for completing the survey, can be an effective way to drive participation as well.

“Keep it easy, simple and transparent,” Hess said. “I think the main takeaway is: Don’t wait for it to be perfect. … Go into it expecting that you’re not going to have 100% participation. Progress is the goal.”

Bridget Bearden, a research and development strategist at the Employee Benefit Research Institute, said keeping track of who attends employee resource group meetings could also help an employer understand the psychographics—psychological variables like attitudes, values and fears—of workers. A company may have ERGs for the LGBTQ+ community or for military veterans, for example. Tracking attendance at these meetings can help a plan sponsor better understand what their employees value and how that drives their behavior.

Demographic Personas

The panelists also spoke about the concept of demographic personas and how using personas—profiles that align with the characteristics of different categories of participants—can help inform plan sponsors about plan design and even investment lineups.

Personas dig into the personality of a group of participants, focusing on what makes them who they are and what drives them to seek out certain benefit offerings.

“Everyone that’s aged 20 to 30 and a woman earning $75,000 [per year] are not homogenous,” Hess explained.

Plan sponsors can use personas to target different educational materials, benefits offerings and investment menu options to relevant groups within the participant population.

An example of personas can be seen in Capital Group’s recent expansion of its employee engagement program, ICanRetire, an expansion specifically targeted toward Hispanic participants. The various program participant personas represent different age groups, participation rates and other factors like financial knowledge and investing confidence. The personas are invisible to participants using the program, but they inform the way ICanRetire creates tailored content.

Bearden said developing clusters of benefits offerings to meet the needs of different demographic personas in this way is more cost-efficient than personalization because it can target larger swaths of a population.

“You can have seven personas that you do messaging for, and it doesn’t have to be [specific to] age and race,” Bearden said. “It’s really a marketing exercise, at its core.”

Anonymized Data

When providing data, many participants do not want any personally identifiable information to be shared with their employer. A plan sponsor can more easily collect “anonymized data,” information that is stripped of all things personally identifiable, such as addresses, Social Security numbers and phone numbers.

Hess said DCIIA found in a survey that many employees fear their employer will use information against them. For instance, they fear that if their employer finds out that they have a bad credit score, this could impact how their employer views them. Hess reminded attendees at the webinar that employers do not need to know everything about each individual but can survey pockets of the population instead.

Bearden said it is important to separate traditional demographics from personal identities. EBRI research found that caregivers, in particular, are reluctant to tell employers about their role as a caregiver for fear that their manager or employer will treat them differently.

“It is important that we are sensitive to the nuances of demographics and understand where demographics end and where identities begin,” Bearden said.