Digital design matters, according to new research from Voya Financial’s Behavioral Finance Institute for Innovation—indicating that just small changes in a retirement plan’s enrollment website can drive positive outcomes.
The working paper titled “Save(d) by Design” presents results from a field study by scientists from Carnegie Mellon University, City, University of London and UCLA that evaluated results from workers visiting enrollment websites for auto enrollment into their employer-sponsored 401(k) plan.
Three small changes in design, the study found, spurred larger changes in employee behavior. The three changes moved key plan information, such as the default savings rate, closer to where employees are prompted to act; simplified and standardized language around enrollment options; and changed the color design on election buttons to three “traffic light” colors.
Simple as those three changes might sound, they resulted in three improvements in employee behavior that were far from small, spurring a 15% increase in personalized enrollment (those who personalized contributed on average 7.8%, compared with those who stayed at the auto enrollment rate of 3.4%); a 19% increase in employees taking full advantage of a company match; and a 10% increase in savings levels.