In 2020, the pandemic revealed what Lenovo had long understood: A siloed approach to employee benefits programs is inadequate. It’s impossible to separate employees’ financial situations from their physical and mental health. For example, a serious bout of COVID-19 could ravage a worker’s retirement savings while acute stress caused by financial uncertainty may make employees more vulnerable to disease. To enhance wellness anywhere, employers had to promote wellness everywhere.
In response to the coronavirus crisis, many employers scrambled to redirect their benefits programs toward a broader range of needs. But as a practiced advocate of a total wellbeing approach, Lenovo was already well positioned to support its employees. Its vendors and in-house staff knew how to work together to solve employee problems. In fact, the company’s response to COVID-19 was merely the culmination of a multi-year effort to focus on the best interests of its workers.
By any measure, Lenovo’s $2 billion 401(k) plan has produced remarkable results. With one of its dual headquarters in Morrisville, North Carolina, the US division of the global technology company has achieved 98% participation, as well as an 11% average deferral rate. But Lenovo’s ambitions are higher still. Four years after its employees were auto-enrolled, the company wants them to save 20% of their income, which would include the company’s 6% match.
“Why not?” said Ryan Whitehead, senior benefits manager at Lenovo, who oversees the company’s US and Canadian financial benefits programs, as well as its defined benefit programs outside the US. His question isn’t flippant, but instead reflective of Lenovo’s entrepreneurial attitude and test-and-learn culture. “You have to be willing to try things out.”
Disruption is something most retirement plan committees try to avoid. But in the fast-paced tech industry, it’s the only way to succeed. As Lenovo has grown from a two-room Beijing startup into a leading global giant, it has held on to its hunger for innovation. It strives to stay close to customers and respond quickly to the market by empowering employees to invent and experiment. Innovation has been the key to anticipating customers’ needs — and employees.
That experimental spirit is exactly what makes Lenovo “a great case study,” according to its retirement plan consultant, Kathleen Kelly, of Compass Financial Partners, a Marsh & McLennan Agency LLC company. Kelly has been working with Lenovo’s 401(k) program for over a decade, starting before Whitehead joined the company. “Courage is a good word to describe them. Often, there’s a certain degree of fear about making changes that won’t be well-received. Lenovo takes an informed perspective, makes a decision and moves on.”
Lenovo’s plan wasn’t always what it is today. Its transformation took years of effort and committed teamwork to harmonize multiple legacy plans. When Whitehead joined Lenovo, he inherited a 401(k) plan that offered a 5% profit-sharing contribution plus a 3% match. In 2014, Lenovo acquired IBM’s x86 server business, including the global employees behind it. Subsequently, the company’s 2014 acquisition of Motorola Mobility included a plan with a 4% match.
The resulting mosaic of retirement plans was clumsy to administer and confusing to navigate. Something had to be done.
Moreover, the retirement plan was only one in a long list of employee benefit programs that needed to be reconciled. The easy fix would have been to tweak the company’s marquee benefit program first—its 401(k) plan. But Lenovo recognized that saving for retirement wasn’t a standalone concern. Every part of its employees’ lives was interconnected: Retirement savings was one part of a larger financial picture, one that affected mental and physical health. Solving for a single benefit in isolation wouldn’t necessarily make employees feel any happier, healthier, or more secure. Lenovo decided to take a wider view and focus on what really mattered: its employees’ total wellbeing.
Like true entrepreneurs, Lenovo’s benefits team started by reimagining the entire benefits experience. They wanted all benefits programs to feel seamlessly interlinked, just like all the aspects of employees’ lives – or an elegant tech solution. That meant no more searching for the right person to ask, getting transferred, reaching dead ends, or forgetting about a benefit entirely. Lenovo’s vision was clear. But executing it wouldn’t be easy. The biggest challenge was coordinating dozens of different vendors to make it happen—a problem that became particularly acute after the Motorola Mobility and IBM x86 acquisitions, when new vendors came on board while many legacy relationships remained.
To deliver a seamless employee experience, Lenovo’s benefits vendors would have to team up. But most had limited histories working together, and many had never met at all. Lenovo began by streamlining its unwieldy provider lineup. The company then convened its first-ever Vendor Partner Summit in 2018, bringing together providers in every category from the retirement plan recordkeeper to the manager of the onsite fitness center. Instead of remaining stuck in their separate silos, vendors finally had the chance to meet each other and hear about Lenovo’s vision of a seamless benefits experience.
The summit made a measurable difference. For one thing, vendors learned to stop saying “I don’t know.” At most workplaces, if employees ask their insurance provider a question about their 401(k) plan, they’ll be told to call their benefits department. At Lenovo, if vendors can’t answer a question, they usually know where to turn for an answer. For example, the company’s onsite wellness center is run by Marathon Health and its fitness center is managed by EXOS. The two organizations work closely together, referring employees to each other as needed. In the same way, if an employee calls the HSA administrative line with a question about investments, the contact center agent will provide the number for Fidelity. Whatever the issue, each vendor can now direct Lenovo employees to the right person, phone call or website to find an answer, saving employees an extra step and creating a cohesive benefits experience.
To reach more participants in a coordinated way, vendors began hosting onsite information tables together. A Cigna employee and a Fidelity representative could sit side by side, chiming in to answer questions that crossed both benefits programs. The joint tables seemed like a curiosity at first, but over time, Lenovo employees embraced the concept. The longer the visits continued, the more popular they became.
Notably, these visits were part of an ongoing program before the pandemic— not one-off promotional events. Lenovo doesn’t host big onsite benefits fairs. Whitehead sees such annual single-day events as transactional — one-and-done events that employees forget as soon as the day is over. He wants employees to feel engaged throughout the year, always able to call up the resources they need, whenever they need them.
Of course, not every employee engagement happens face-to-face. Lenovo is a technology leader, after all, and it partners with other innovative technology companies to help execute its vision. Their platforms make it easy for Lenovo employees to conduct transactions and retrieve information, with fewer phone transfers or dead ends. But Lenovo isn’t interested only in reducing transactional friction. At a higher level, the company looks for partners with a clear roadmap to helping employees feel more engaged and involved with their benefits.
Over the past year — as the pandemic disrupted workers’ lives on every level — the links between mental, physical and financial wellbeing became all too obvious. To Whitehead, these events validated the innovations Lenovo has made over the past few years.
“The biggest takeaway is that you do truly have to use a total wellbeing approach,” said Whitehead. “Things kind of blend together now.” Fresh off its success in the US, Lenovo began offering a global employee assistance program just over a year ago. Later in 2020, it rolled out a larger global total wellbeing program, leveraging ideas tested in each geographical market to benefit other locations around the world. The program and its rollout timing were prescient, as a global pandemic called for a global wellness solution — and Lenovo had one at the ready.
“We can’t keep thinking of everything in silos,” said Whitehead. “It all crosses, it all touches each other. That’s why having vendors work together matters so much to us.”
Lenovo was founded on a philosophy of constant reinvention — always striving to make its technology faster, smarter, better. Whitehead’s team brought that same spirit of innovation from the engineering floor to the benefits committee, with meaningful results.
To achieve its remarkable innovations, the company didn’t set out to break all the rules. But it did have to write four new ones:
1. Be bold.
Lenovo isn’t afraid to make bold decisions. Sponsors often worry about sparking a backlash if they introduce major changes. In 2016, the Lenovo committee wondered how participants would react when the entire population was swept into a 6% automatic enrollment rate — a big leap from the previous 3% rate. But the feared blowback never materialized. Only a handful of employees set their contribution lower. Even fewer opted out entirely. Nor was there any pushback when Lenovo subsequently upped the auto-increase to 2%. To many sponsors, meddling with other people’s money is viewed as taboo. But as Lenovo’s numbers show, employee trust has led to employer permission to evolve the plan in pursuit of participants’ optimal outcomes.
“You need to have confidence as a plan sponsor,” Kelly said. “It makes all these supposedly difficult decisions easier knowing you followed the right process and you’re doing it for the right reasons.”
2. Build trust.
The reason why employees trust Lenovo to make bold choices is because the company has repeatedly proven it has their best interests in mind. To Lenovo, even the legal fiduciary standard sets too low a bar. The company embraces an ethic of stewardship toward its workers’ wellbeing. It truly cares about employees — a sentiment that cuts across organizational lines.
“Listening to the finance side in a committee meeting, you might think they worked in HR,” Kelly said. “We’ve also been very process driven, and everything has had a very disciplined execution. If anyone pushes back, we have all the reasons why.”
From any committee’s point of view, doing nothing is the easiest path, which is why most plans avoid implementing major changes. Fear of making a mistake usually outweighs concern about falling behind. But Lenovo bucked the trend, a decision Kelly regards as an act of courage. A strong process and a keen sense of participants’ needs inclined the company toward action. Whitehead is confident that 25 years from now, employees will be glad they worked for a company that did the right thing.
3. Empower decision makers.
Many plans teeter under multiple levels of decision-making. The simplest change can take a year. At Lenovo, Whitehead said, “we’re used to having an entrepreneurial mindset. That’s who we are.” Whitehead and his team have the power to do things that make a difference. The committee is leaner than most, without a huge chorus of voices clamoring to be heard. All of its members are participants, personally invested as owners of the plan as well as its stewards. Rarely does anyone even miss a meeting. The team members feel it’s their job to try new things, even if not every initiative pans out. Inertia is seen as the biggest failure.
The committee also encourages employees to feel like owners of the plan — personally invested in its success and confident about speaking up to make their concerns heard. As owners, employees feel emboldened to take on greater responsibility for their own decisions.
4. Take communications seriously.
Lenovo has a track record of creating award-winning programs on a variety of topics. Its communications reflect how much the company cares for its employees’ wellbeing, and how seriously it takes the matters at stake.
The company never treats communications as an afterthought. Instead, it invests in crafting deliberate, well-thought-out programs that tell a coherent story. A monthly email goes out to the entire participant population, accompanied by three to four wellbeing campaigns each year. Even though Lenovo is a technology leader, not all of its communications are digital. The company uses multiple avenues of communication to reach more participants, recognizing the value of tangible materials that employees can touch and flip through. Its 2018 brochure communicating a refined retirement investment menu received top awards at MarCom and the Eddy Awards, competitions that recognize excellence in communication design and messaging.
Whitehead is also careful to avoid overcommunicating. “Communication is the biggest challenge for all benefits. You have to be deliberate about it on an ongoing basis, so you can get people engaged without overwhelming them.”
Be bold, be clear and earn employees’ trust: For Lenovo, it's a winning formula.
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