Benefits Education Boosts Employee Loyalty
The many benefits of Employee Benefits
The data is in: A recent survey from Harris Interactive reports that workers whose employers provide them with detailed and frequent education about the non-cash workplace benefits they receive are more likely to have positive feelings toward their employer, and to report that they feel valued by their employer. The survey, sponsored by Unum, a well-known disability insurance company, found a strong positive correlation between how well employees understood their benefits package and employee productivity.
The survey’s authors did make a number of recommendations, including the following:
- Provide time for employees to read through their benefits materials. The survey’s authors found that employees were more likely to report they were able to make informed decisions about their benefits packages if they had at least three weeks to review them before committing. The takeaway – the sooner you can get information to workers, even before the open enrollment period begins, if possible – the better.
- Employ a multi-pronged approach to benefits-related communications. For example, ensure that detailed plan information is available on the Web, via print materials, and through worksite presentations and meetings conducted by management or benefits professionals.
The survey’s authors also reported that workers are feeling overwhelmed, at times, with all the market choices available to them. A generation or two ago, all they had to worry about were their health plans and perhaps a pension plan. Now, with Section 125 ‘Cafeteria’ plans, voluntary enrollment, flexible spending arrangements, health savings accounts and many other new developments and innovations within the employee benefits industry, workers have a lot more variety available to them, and more choices available. But it does take more time and effort to learn about all of the options available.
Workers are still having trouble with the mass migration from traditional defined benefit pensions to defined contribution pensions. Traditional pensions have been jettisoned over the past 30 years by employers in favor of the much less costly defined contribution pensions (think 401(k) plans and SIMPLE IRAs). But these plans have also placed much more of the risk burden on employees, as well as the decision-making burden. Many of them are not up to the task – creating a need and desire for much more education from their employer on how their retirement plans work and how to make the most of them. This challenge, however, also creates an opportunity for employers to set themselves apart in a competitive labor market by providing the benefits education and guidance that so many workers want and need.
We have also seen a lot of expansion in the number and types of medical plans available, from HMOs to PPOs to HDHP/HSA combinations – all of which can be confusing to many employees. Again, the study’s authors found that exceptional employers could help build employee loyalty by providing substantial education on how these different plans worked and how to select the best ones for the workers’ own individual situation.
The data say that employee benefits have a tremendous value, not just by virtue of the fact that they are available. The study found that the employer realized the improvement in employee loyalty and goodwill only when their employees made a concerted effort to provide workers with guidance and education.
Employee turnover means the benefits education project will be an ongoing challenge. Depending on your own situation, an annual benefits briefing right before open enrollment period every year may not be enough. You may have to do it semiannually or quarterly if you have a fair amount of turnover.
Finally, employers should know that they don’t have to do everything themselves. Employee benefits vendors have a tremendous amount of expertise and experience in briefing employees, and are generally happy to assist in proving materials and even conducting informational briefings, in many cases.