By Blake Rogers, Jimmy Hinton and Ricky Reynolds
If your company is like most employers, it’s investing a significant amount of money in something you think is really valuable: workplace benefits for your employees. But is this investment returning a good yield — in other words, are you getting your money’s worth?
Unless employees understand and appreciate the benefits their employers are providing, the answer is “probably not.” But there’s a simple solution to help ensure you get blue chip returns on your benefits investment: benefits communications.
The benefits environment is changing
The benefits landscape has changed significantly in recent years. Some of the driving factors include:
- A graying workforce. In 2010, the number of employees in their 50s and 60s was the largest on record, according to the Bureau of Labor Statistics. But the first of 77 million Baby Boomers turned 65 in 2011, which means more of this generation will soon be retiring. Changes like these will require employers to replace older workers with a younger workforce to make up for the loss of talent and tenure.
- The recession. Workers say benefits have taken on greater importance since the recession. A 2011 Monster.com survey showed 82 percent of employees say they’re more interested in knowing what their insurance benefits cover and how they work. And 74 percent say they’re more aware of what benefits they have — and don’t have — at work.
- Health care reform. Provisions of the Affordable Care Act are starting to take effect. Among them are higher incentives for participation in wellness programs and the launch of health insurance exchanges in late 2013. Employees will look to their employers for even more information and guidance as the marketplace changes.
These changes are forcing employers to carefully evaluate their current benefits and search for ways to improve or maintain them without increasing costs.
Employees must understand their benefits to appreciate the value of your investment
The vast majority of workers don’t understand the value of the benefits they now have. Benefits today account for more than 30 percent of employee compensation, according to a March report from U.S. Bureau of Labor Statistics. Yet few employees know what it actually costs employers to provide benefits — health insurance in particular. A 2011 LIMRA study showed that even though 60 percent of employees thought they knew they cost of their medical insurance, only 15 percent could actually provide a reasonable estimate.
Employees who understand their employer’s benefits investment are more likely to be satisfied with their workplace. A 2011 Unum survey showed 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. And employees who value their benefits packages are three times more likely to believe their employer cares about their well-being.
Not knowing the true value of benefits can have serious consequences for companies. First, with an improving economy and expanding opportunities, workers are more likely to look for new jobs when they don’t fully appreciate their existing benefits. Second, employers shell out more money in training and recruiting to replace dissatisfied workers who leave their jobs. And companies that don’t effectively communicate the value of their benefits packages aren’t getting the credit they deserve.
Improve communication without additional investment
A Colonial Life-Harris Interactive poll earlier this year of employees whose employers offer benefits affirmed several tactics that could help employees better understand their workplace benefits. These practical tips will help you improve benefits communication at your company:
- Provide benefits information employees can access at home or work. Employees rarely make benefits decisions alone. Rather, they often want to discuss and make benefits choices with their families. Relying solely on workplace communication tools such as group meetings and the company intranet isn’t enough. Complement electronic communication at work with printed brochures or web-based resources that outline your benefit offerings, their purpose and their cost.
- Provide benefits information that is easier to understand. Simplify the use of insurance and benefits jargon in your communications so the message is better understood. Use concrete, real-life examples to illustrate your points whenever possible.
- Provide an opportunity to talk with a benefits expert on company time. A 2012 study by the Society for Human Resources Management showed only one in four employers offer this option, yet 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 who participated in a personal counseling session say it improved or significantly improved their understanding of their benefits.
- Provide benefits information more frequently. Communicating employee benefit choices once a year at annual enrollment simply isn’t enough. Companies should look for opportunities to communicate their benefits packages throughout the year as part of an overall communication strategy.
- Provide benefits information more personalized to employees’ needs. Older employees nearing retirement have different benefits than younger, unmarried workers. Employees with dependent children living at home need different benefits than workers without children. A one-size-fits-all approach to communication won’t work with a diverse workforce. Many companies offer employee-paid voluntary benefits to give employees greater choice and the opportunity to customize their benefits packages to better meet their individual needs.
Even without a hefty benefits education budget, you can greatly expand your benefits communication efforts by tapping into resources from benefits providers. Some carriers offer communication services at no cost in exchange for meeting individually with employees during enrollment. These partners can communicate your core benefits package, along with any voluntary products you’ve chosen to offer employees.
Maximize your benefits return
Offering an attractive menu of benefits without a solid communications strategy puts your company’s investment at risk. Maximize your investment by improving the way you deliver benefits communication to your employees