Do employees know the true value of their benefits packages? Most don't. Benefits statements can help employees understand their benefits better and can help employers get more recognition for one of their biggest investments.
Estimates show that benefits constitute 30 to 40 percent of an employee's total compensation package. Yet most employees don't have any idea how valuable their benefits are as part of their overall compensation.
"A solid benefits package is a plus—but only if employees know and understand what their employer makes available to them," said Marianne Adams, assistant vice president of enrollment services at Colonial Life & Accident Insurance Co. "Benefits statements are helping many employers today get greater value from the benefits they provide."
An Education Tool
Benefits statements, as in this sample template, offer a snapshot of an employee's total compensation, including a list of benefits for which the employer pays all or part of the cost. By listing standard benefits such as health coverage and life insurance, as well as vacation time, parking, wellness center memberships and any voluntary benefits offered, these statements help employees see their "hidden paychecks"—the dollar value of the benefits that constitute their total compensation package.
"Too many employees today don't really understand their benefits packages," Adams said. "Therefore, they have no idea how much their benefits are worth or don't consider their value when looking at their total compensation." For instance, a June/July 2010 Harvard Business Review Analytic Services survey report pointed out the need for improved benefits communication:
• Just 43 percent of HR leaders say their employees are satisfied with their benefits.
• Even fewer (30 percent) believe that their employees are satisfied with their benefits communication.
"Employers find benefits statements tremendously valuable in helping their employees better understand and appreciate everything they provide," said Adams. "We strongly encourage companies to take advantage of benefits statements to help with the increasingly important task of benefits education and communication."