Stretching Your Benefits Dollars
To get the full value of their investment, employers need to make sure employees understand and appreciate the benefits they provide, and a solid communications strategy can help HR leaders and their organizations do just that.
By Rich Williams
In today's tight economy, no employer wants to waste a dollar. But you may be doing just that if you're not effectively communicating the benefits package you provide your employees.
Today's employers spend about 30 percent of their payroll providing benefits to their workers, according to the U.S. Bureau of Labor Statistics. But few employees know what it really costs their employers to provide these benefits. A 2011 LIMRA study titled What is $1 Billion an Hour Worth? showed that even though 60 percent of employees thought they knew the actual cost of their medical insurance, only 15 percent could provide a good estimate.
A good benefits program helps employers attract and retain a strong workforce. According to one study by the Financial Services Roundtable and Employee Benefit Research Institute, 40 percent of employees have stayed in a job and 36 percent of employees have taken a job based on the benefits and insurance an employer offered.
To get the full value of their investment, employers need to make sure employees understand and appreciate the benefits they provide. A solid communications strategy can help HR leaders and their organizations do just that.
There's a strong association between benefits knowledge and employee satisfaction at work. Employees who understand their employer's benefits investment are more likely to be satisfied with their workplace. Research from Unum in 2011 shows more than four out of five workers who rated their employee benefits education highly also rated their benefits packages positively and said their workplace was an excellent or very good place to work.
Yet many employers fall victim to these common mistakes when it comes to benefits communication.
* Heavy reliance on one communication method. Just because you offer a benefits website or booklet doesn't mean your employees will read it or be fully educated. A variety of communication methods during enrollment usually works best, since employees have unique needs and preferred ways of learning. Unfortunately, most companies don't have the staff to dedicate significant resources to education so they rely on whatever methods are easiest to provide or readily available.
* A lack of decision analysis tools. It's not always easy for employees to choose the right benefits to protect themselves and their families. Insurance jargon and multiple options and features of various products can complicate the selection process. Providing a way for your employees to enter personal information through worksheets or calculators can help them get individualized answers and make better purchasing decisions.
* Lack of a communications budget. Only 22 percent of employers say they had an employee benefits communication budget in 2011. And, according to Society for Human Resource Management survey, 67 percent of those who did have a budget saw no increase in 2012. While it's not necessary to have a hefty benefits education budget to be effective, employers who value their benefits investment must be willing to make employee education a priority.
* Inadequate promotion of wellness programs. Many employers offer wellness programs, but fail to properly communicate and promote their availability. Take advantage of the benefits enrollment period to talk about the company wellness program and encourage participation. Employers can not only improve employee health and lower health care costs, they can reap the benefits of improved employee morale and productivity.
* Lack of measurement. The vast majority of employers believe they provide effective benefits education, according to proprietary research. In fact, 77 percent of employers agree or somewhat agree that their benefits education efforts are very effective. But fewer than one in four offers employee surveys to measure knowledge. And very few use qualitative methods such as focus groups or employee meetings to learn more about the effectiveness of their efforts.
Although most employers think they do a pretty good job communicating benefits, employees don't necessarily agree. Only 60 percent of employees whose employers offer benefits say their employer's current communication is very or fairly effective. And 9 percent say the benefits communication they receive is not at all effective.
Employees say several factors are important in helping them make benefits decisions. In a recent Colonial Life survey, workers suggested several ways their employers can help them better understand their workplace benefits.5
* Provide benefits information they can access at home or work. Employees need the time and opportunity to discuss and make benefits choices with their families. So group meetings and the company intranet won't work for family members. Complement the electronic communication you provide for employees at work with printed brochures or web-based resources that outline the company's benefit offerings, their purpose and their cost.
* Make benefits materials easier to understand. Simplify the language you use and eliminate benefits jargon in your communications materials whenever possible. Doing so will help employees better understand the message. Use concrete, real-life examples to illustrate your points whenever possible.
* Give employees an opportunity to talk with a benefits expert on company time. Employees who participate in one-to-one counseling sessions overwhelmingly report being satisfied with the process. Post-enrollment surveys by Colonial Life show 97 percent of employees say personal counseling sessions improved or significantly improved their understanding of their benefits.
* Communicate benefits information more frequently. Communicating employee benefit choices once a year at annual enrollment simply isn't enough. Look for opportunities to communicate your benefits packages throughout the year as part of an overall communication strategy.
* Personalize benefits information to meet employee needs. All employees are not the same. They have unique needs, family situations and financial concerns. Therefore, a one-size-fits-all approach to communication won't work. Whenever possible, make benefits education personal and relevant to employees. Individualized counseling sessions and interactive decision-making tools can be effective ways to offer personalized communication.
Effective benefits education doesn't have to break the bank. HR leaders can tap into the educational resources offered by many benefits providers to develop a strong communications strategy. Some carriers even offer communication services at no cost in exchange for meeting individually with employees during enrollment. This kind of personal communication can help employers effectively communicate their core benefits offerings, along with any additional benefits made available during enrollment.
Using a qualified benefits provider for enrollment communication offers several advantages:
* They are the experts. They specialize in employee benefits education and know the best practices.
* They offer additional resources. Many vendors have access to benefits information in multiple foreign languages, benefits statements, online education tools and calculators and customizable websites.
* They extend your HR staff. Some vendors offer a nationwide network of professional benefits counselors who can coordinate enrollments across multiple locations. This helps ensure consistency in the enrollment process. Using these vendors to verify employee and dependent information during enrollment can help keep company records current and ensure employees and dependents are actually eligible for benefits.
* They can increase participation in wellness programs and other offerings. Personalized benefits counselors can communicate an employer's entire benefits package, including wellness programs where participation can directly enhance the bottom line.
* They can measure employee satisfaction. Some vendors offer post-enrollment surveys of employees to measure satisfaction rates. This kind of feedback offers human resource professionals valuable insight about the employee experience.
Employers offer benefits to their employees because they care about the health, financial well-being and quality of life of their workforce. But unless employees know about their benefits and appreciate them, employers can't get a full return on their investment. Partnering with a strong benefits partner to develop a comprehensive communication strategy can help employers extend their resources and get the most from their hard-earned dollars.
Rich Williams is vice president of growth markets at Colonial Life & Accident Insurance Co.