With U.S. employers now spending nearly 40 percent of payroll on benefits, they need maximum value from their benefits packages. That’s why a strategic approach to benefits communication is no longer a business tactic limited to big organizations; it’s a necessity for businesses of all sizes.
Employers agree that understanding and appreciating the benefits they provide is important, but few think their employees actually do. Take a look at these statistics:
• 92 percent of U.S. employers surveyed by Colonial Life in June 2009 agree it’s important to their business that employees understand and appreciate their benefits, but only 19 percent think their employees actually have a good understanding of them.
• Nearly 5 percent of employers think their employees know nothing at all about their benefits.
Ten Factors that Influence Benefits Communication
Obviously, there’s a gap between what employers want and what they believe they’re actually getting when it comes to benefits communication. Yet it’s relatively easy to develop a strategic approach to benefits that can boost employee appreciation and comprehension. Start by taking a quick assessment of these 10 factors that strongly influence benefits communication.
The Baby Boomer generation (born between 1946 and 1964) is aging and leaving the workforce. Generation Y (born between 1981 and 1999) is entering en masse, outnumbering the Boomers and bringing technology savviness with them. In addition, the number of working women is expected to be nearly 9 percent greater in 2016 than it was in 2006, more than the growth rate projected for men, according to projections by the U.S. Bureau of Labor Statistics. The number of Hispanics entering the workplace is also projected to increase by nearly 30 percent, reaching 26.9 million in the next seven years.
These changes mean that companies need not only to adapt their benefits packages, they also need to adjust the way in which they communicate those packages.
2. Life Stages
In what stage of life are your employees? Are they single? Newly married? Newly promoted? Ready for retirement? Employees have different needs from their benefits packages at different stages of their lives. A strong communication strategy makes accommodations for these variables.
3. Internal Resources
Most HR staffs work with decreasing resources. So employers must evaluate the current complexity of their benefits offerings, enrollment processes and claims management systems. How much time and money is available to support them? Be realistic in your assessment of how much support you can provide internally and how much support you might need from outside sources.
4. Geographic Location
Having employees in dispersed locations, as well as those who do not work in an office, complicates benefits communication—especially for large employers. Global workforces that speak multiple languages also present challenges. How can you facilitate more-personal communication under these circumstances?
5. Employee Culture
What is the culture of the organization? Is it one of openness and proactive communication? Or is it more close-lipped, with information offered on a “need to know” basis? What changes, if any, have been made recently to your benefits plans? Are employees concerned about these changes? Is morale good or bad? All of these factors affect your benefits communication strategy.
6. Existing Communication Channels
What channels do you use to communicate in your company? Do you hold regular employee meetings? Do you have a company newsletter? If so, how often do you distribute it? Do employees and their families receive copies? Multiple touch points work best in benefits communication, so be sure to inventory all methods available.
What technology does the company offer for communication? Do all employees have access to computers? The Internet? An intranet? Are videos, podcasts, blogs, text messaging and online surveys an option? Although technology creates greater efficiencies and a new approach to benefits communication, be careful not to substitute it for face-to-face and ongoing communication.
8. Employee Schedules
What hours do your employees work? Is your business open round the clock? Is it open on weekends? Do any employees telecommute? These variables can become barriers to communication if not taken into consideration upfront.
9. Year-Round Communication
The benefits needs of employees change throughout the year. New employees enter the workforce, and older employees retire. People get promoted, married and divorced and have children. An effective benefits communication program gives employees access to make needed changes throughout the year.
10. Consumer-Directed Plans
Has the company moved toward a consumer-directed health care plan? These plans combine a high-deductible insurance plan with a health savings account (HSA) or health reimbursement arrangement (HRA) that employees use to pay for unreimbursed health care costs. While consumer-directed plans give employees more control over their benefits, employees must understand how to use them properly. Effective benefits communication and education are critical to these employees.
After the Assessment—What Next?
After assessing the variables that can affect your benefits communication strategy, it’s time to develop a plan. While some handle the entire benefits communication process themselves, typically employers turn to enrollment firms or voluntary benefits providers for help in communicating their benefits. Some companies charge for their services, and others offer them free as part of their enrollment.
Ask your broker to help you find the right benefits communication partner. Brokers should evaluate a carrier based on the following criteria:
• A strong partnership. The most successful benefits providers work with companies using a consultative approach to develop a business strategy around their benefits plans. Employers should view vendors as part of their HR team, as opposed to just another provider of a commoditized product. The ability for the enrollment group and the company’s HR directors to work as a team is crucial.
• Customized communication. Effective programs work best when benefits communication is employee-friendly. Employees need to be shown how their benefits work together, and they need guidance on how to make decisions that are best for them and their families. Communication materials should be top-notch, attractive and easy to understand. Well-produced materials help employees feel comfortable that they are working with a professional, high-quality company.
• Enrollment capabilities. Enrollment technology should provide the flexibility and automation that employees need and the control that HR managers require, and be capable of coordinating enrollment in multiple locations.
Because employee benefits have a profound impact on job satisfaction and morale, benefits communication is one of the most important responsibilities an employer bears today.
Tom Gilligan is senior vice president of marketing and branding for Colonial Life, a provider of supplemental insurance including accident, disability, life, hospital confinement, cancer and critical illness coverage.
Open Enrollment for 2010 Will Be Different, SHRM Online Benefits Discipline, September 2009
Dental Benefits Under-Valued Without Effective Communications, SHRM Online Benefits Discipline, August 2009
Build Benefits Engagement Online, SHRM Online Benefits Discipline, May 2009
Communicating Your Benefits Value Calculus, SHRM Online Benefits Discipline, April 2009
Benefits Communication—A Tool to Boost Morale, SHRM Online Benefits Discipline, April 2009
SHRM Online Benefits Discipline