While 80 percent of HR decision-makers in the U.S. believe that it's important for employees to understand their benefits options fully, they estimate that only about 60 percent of their employees do, according to a survey by benefits services firm ADP Inc. The finding has serious implications for how companies communicate one of the most important parts of their employees' total compensation.
"With many employees asked to take on greater responsibility for managing their own benefits, there is room for improvement by HR departments to engage employees in the decision-making process," said Tim Clifford, president of benefits services at ADP. "With the power of web-based and mobile technologies and decision support tools, we have new, innovative and cost-effective ways of educating employees and helping them make critical choices anytime and anywhere."
The ADP HR/Benefits Pulse Survey on Employee Benefit Tools engaged 501 HR decision-makers from companies with employee populations ranging from 50 to over 1,000.
Benefits Communications: Budgets Are Being Squeezed
Among the top survey findings:
A surprising number of large employers and the majority of mid-size firms do not have an employee communications budget related to their benefits plans:
• 66 percent of mid-size employers have no employee communications budget.
• 36 percent of large employers have no employee communications budget.
It is unlikely that this will change in the near future, as HR decision-makers at about half of companies say their budget has remained the same in the past year and few expect it to increase in the next one or two years, according to the survey report.
Of companies with a budget, HR decision-makers in about half of large and mid-size companies say their budgets have remained the same in the past year:
• 53 percent of mid-size employers' budgets remained the same.
• 47 percent of large employers' budgets remained the same.
More than half of HR decision-makers in large (57 percent) and mid-size (63 percent) companies say they are likely to maintain their employee communications budget in the next one or two years, and only one in five (21 percent) of both groups plan to increase their budget.
Tools Increase Employee Understanding of Benefits
The majority of HR respondents surveyed say decision support tools increase employee understanding of benefits and their overall engagement, yet a majority of large and mid-size companies don't provide them. Specifically:
• 72 percent of mid-size employers don't provide decision support tools.
• 51 percent of large employers don't provide them.
Decision support tools, typically software applications accessed through a company portal, give employees the ability to compare health care plans to determine which plan best meets their needs, according to the report.
Approximately half of large (53 percent) and mid-size (50 percent) companies offer these tools year-round; about one-quarter of large companies (23 percent) and one-third of mid-size companies (33 percent) provide them only during open enrollment and qualified events.
Among the companies that provide decision support tools, the most common tools reported are:
• A flexible spending account (FSA) calculator.
• A plan comparison chart.
• A medical cost calculator.
• Wellness incentive modeling.
One out of five large companies that do not provide decision support tools plan to do so in coming years, but almost half (49 percent) of large companies say they will not add them and about one-third (31 percent) are unsure whether they will.
Very few (only 13 percent) of mid-size companies that do not provide decision support tools plan to do so in the next year or two; 38 percent will not, and almost half (49 percent) are unsure of what they will do.
Mobile Tools Becoming Common in the Workplace
Mobile access to benefits information is deemed important by approximately six out of 10 HR decision-makers, regardless of company size, yet less than half of companies provide mobile access (46 percent of large companies and 39 percent of mid-size companies).
Among the top five mobile application features HR decision-makers are most interested in: health care provider information, benefits alerts and single sign-on.
HR decision-makers say that, on average, about two out of five employees use mobile technology in their regular workday activities, and half of respondents expect that this will increase over the next two years.
Among employees using mobile technology in regular workday activities:
• 38 percent are in large companies.
• 42 percent are in mid-size firms.
Among employers that expect employee usage of mobile technology to increase in the workplace over the next two years:
• 52 percent are large companies.
• 47 percent are mid-size firms.
Web-Based Portals: Ubiquitous in the Workplace
Nearly nine out of 10 large companies (86 percent) and seven of 10 mid-size companies (71 percent) have a web-based portal that hosts employee benefits information.
The vast majority (86 percent) of large and mid-size employers with a web-based portal say it is important for employees to have 24/7 access to benefits information, yet only 72 percent of large employers and 66 percent of mid-size employers provide this access, the survey shows.
Four out of 10 large companies and 38 percent of mid-size businesses that offer web-based portal access to employees have a single web-based portal that provides access to multiple types of information vs. multiple portals for each primary task. Employees of companies that offer a single portal have access to a wide variety of information—including benefits, pay stubs, time and attendance data, and tax withholding information.
Approximately two-thirds of large and mid-size companies with a single web-based portal (66 percent and 60 percent, respectively) allow employees to modify personal information through the portal, most commonly annual benefits enrollment and address and tax withholding information.
By allowing employees to modify their data, the majority of HR decision-makers see three benefits:
• They are able to maintain more-accurate information.
• Fewer calls to the HR/benefits department are reported.
• Most think that their portal has reduced administrative burden.
Among companies that provide web-based portal access to benefits information, approximately half (57 percent of large employers and 44 percent of mid-size employers) use a third-party hosting vendor.
Conducted from July 6-18, 2011, the survey asked 501 HR decision-makers to respond to a 10-minute online questionnaire. ADP was not identified as the study sponsor. The study involved U.S. enterprises with 50-999 (251 interviews) and 1,000 or more (250 interviews) total U.S. employees. Federal, state and local government and public education were excluded.
The survey respondents were policy change decision-makers and purchase decision-makers for systems/services in HR and benefits.
Help Employees to Maximize Their Health Benefits, SHRM Online Benefits Discipline, December 2011
With Economic Uncertainty, Perceived Value of Benefits Rises, SHRM Online Benefits Discipline, October 2011
Employees Want Time, Tools to Mull Benefits, SHRM Online Benefits Discipline, October 2011
'Best Companies' Take Collaborative Approach to Benefits, SHRM Online Benefits Discipline, September 2011
SHRM Online Benefits Discipline
SHRM Online Health Care Reform Resource Page
SHRM Online Retirement Plans Resource Page
SHRM Online Workplace Flexibility Resource Page