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  • The opinions expressed in this presentation are those of the speaker. The International Society and International Foundation disclaim responsibility for views expressed and statements made by the program speakers.

    Behavioral Economics Communications for Employees’ Benefit Sherida Ferguson, CEBS Advocacy Board Member Gus A. Stavros Center for Free Enterprise and Economic Education University of South Florida Tampa, Florida

    Deborah Kozdras, Ph.D. Instructor, Chief Creative Officer Gus A. Stavros Center for Free Enterprise and Economic Education University of South Florida Tampa, Florida


  • Nudge, Nudge

    While the beginnings of nudge theory have been around since before 1995, it was only made prominent through Richard Thaler and Cass Sunstein‘s  book  on the topic in 2008. A “nudge” is anything which serves to predictably cause people to behave in a certain way without removing their choice in the  matter. You can’t “nudge” someone if they have no option but to act in the way you want them to. Nudge Theory: How to Influence Decisions Without Ads. Ben  Mulholland  March 8, 2019. Progress.St.®


  • Obstacles to Successful Communication

    • Behavioral Economics • Econs and Humans

    • Bias

    • Nudge

    • Workforce demographics • Five generations in the workforce.

    • Generational communication preferences differ.

    • Financial Stress • More expenses than income.

    • Salaries fall behind inflation

    • Student Loans

    • Resources


  • Employee Surveys

    • Enrollment is a challenge.  • Resources:

    • Poll Everywhere • HR Tools 

    • Gamification • Through a questionnaire of your software needs will provide 

    recommendations for vendors.

    • Five ways to engage employees to take advantage of the benefits  offered.


  • 4B-5

  • 4B-6

  • A park wanted to encourage people to stop litter. You Could: Hand out fines for littering Pay people for using the garbage can Place green footprints on the ground, pointing

    the way to the nearest garbage can

    Place green footprints on the ground, Pointing the way the to nearest garbage bin


  • 4B-8

  • 4B-9

  • 4B-10

  • Simplify the Process


  • Econs (Spock) • Rational decision makers • Use cost/benefit analysis • Self interested to obtain  maximum utility (financial)

    • Think they don’t have  biases

    Humans (Homer Simpson) • Do not always use cost/benefit  analysis to make decisions

    • Can be distracted, inconsistent,  and impulsive

    • Do not always recognize  personal biases and heuristics

    Source: Council for Economic Education 

    Behavioral Economics 101: Humans vs. Econs


  • Fast Thinking  • Gut reactions and  learned patterns

    • Can be wrong, but is  often right

    • Operates effortlessly • Influenced by biases  and heuristics

    Slow Thinking • Articulates judgments  based on evidence

    • Weighs costs and  benefits of choices

    • Requires effort  • Examines biases or  heuristics when so  inclined

    Behavioral Economics 101: Fast and Slow Thinking (Kahneman, 2011)


  • Bias • Emotional distortion • Loss aversion • Anchoring • Inertia • Seeking confirmation • Temporal discounting • Habituation

    Solution • Motivate with positivity • Accentuate the positive • Move the match • Use automatic features • Tell a story • Reframe the story • Changes things up

    Strategies to decode human nature and improve employee savings. Empower Institute  white paper.

    Decoding Human Nature*


  • Rules for Nudges

    Principles  Frame messages clearly, using “gain’ and “lose”

    for not selecting a feature.

     Are you really going to give up 50 cents added for each dollar you put into your 401(k) account?

     Instead of using the term save, say: “Will you spend 6% of your pay on yourself now, so you can enjoy life when you retire?”

     “Would you rather pay yourself or the government? Increase your retirement savings and cut your taxes withheld and owed.”

     80% of ABC employees contributed to their retirement last year.

     Nine out of every ten new hires say “yes” to saving 15% of their pay for their retirement.

    Framing Considerations What will employees gain if the do this‐ financially, socially, emotionally or  physically?

    What will employees lose if they don’t do  this‐ financially, socially, emotionally or  physically? 

    Will promoting the gains work better in  this situation, with these employees, or  would highlighting losses work better?

    How should we craft the message to  actively suggest, or promote, either gains  or losses. 

    Norms: Descriptive Norms, use group Identification, where the employee will want to mirror the behavior. Injunctive norm describes “which behaviors are and are not  approved. Additionally, it can promise social rewards or threaten social punishments.”  Source. “Get Action Instead of Indifference: Using Behavioral Economics Insights to Deliver Benefits Messages.” John Moses, Ph.D./ Aon Hewitt.


  • Techniques to Nudge the Desired Behavior.

    Stress what could be gained or lost. Point out what others are doing right. Use testimonials versus eye-popping

    statistics. Encourage individuals to picture their

    retirement. Leverage competition. Use op-out versus opt-in features. Limit investment choices. Structure the menu of investment

    choices. Use a stretch match. Provide access to a financial advisor.


  • Obstacles to Retirement Success!


  • Inertia, critical thinking, biases, loss aversion, a few of the obstacles to successful decision-making.


  •  Credit card debt hit an all-time high of $834 billion.

     Mortgage debt also set a new high of $9.4 trillion.

     Personal loan debt reached $291 billion, and grew faster than any other kind of debt.

     Student loan debt also hit a record high of $1.37 trillion.

     Auto loan balances reached $1.27 trillion, another all-time high.

    “If one wants to get out and stay out of debt he should act his wage.” Anonymous ∞

    “Never run into debt, not if you can find anything else to run into.” Josh Billings


  • Great Depression to Great Recession: A Generational Impact on All Generations.


  • Five Generation Workforce‐population‐by‐generation/‐guidelines‐redefine‐birth‐years‐millennials‐gen‐x‐and‐post‐mllennials


  • Engaging the 5 Generations That Make Up Your Workforce What Do They Want?

    • The Silent Generation (Before 1946) is 1% of the workforce • Focus on remaining healthy and productive at work. • Dealing with costs of prescriptions • Want reasonable job accommodations, injury prevention and chronic condition 


    • Baby Boomers (1946‐1964)  27% of the workforce • Concerned about sufficient retirement funds • Remaining in workforce to support family. • Want preventive health measures, including ergonomic enhancements, and fitness.

    • Generation X (1965‐1980)  27%  • Perks such as flexibility of work locations and hours, childcare, maternity/paternity 

    leave, financial protection and education, and well‐being support

    • Opportunities for growth paired with job security • Preparation to take on leadership roles as more Baby Boomers Retire.

    • Millennials (1981‐1996) 44%* • A choice of benefits • Maternity/paternity leave • Remote work and control of their schedules • Defer traditional asset ownership in favor of renting and investing in experience

    • Generation Z (After 1997) 1%** • Flexible workplace • Concerned about student debt  • Prefer to work collaboratively versus remotely‐74% prefer to communicate face‐to‐

    face  with co‐workers

    • Rely heavily on their parents and social networks for financial advice. • View exercise as an integral part of a healthy lifestyle.

    Communications Preference

    • The Silent Generation • Brief memos • Face to face meetings

    • Baby Boomers • Phone • One‐on‐one and group meetings • Print Materials

    • Generation X • Email • Phone

    • Millennials • Online portals • Text • Fac