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Benefit dollars are wasted when they don't fit with employees' needs
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Nearly 90 percent of employers view attracting talent and improving engagement as the top objectives they want to achieve by offering employee benefits. However, many (70 percent) say they are struggling to help employees understand and value their benefits package.
And only 7 percent of global HR professionals say that they are consistently delivering against their benefits plan objectives, according to research from Thomsons Online Benefits, a provider of global benefits and employee engagement software. The firm's
Global Employee Benefits Watch 2016/17 report, based on a survey of 448 global HR and reward professionals conducted in the first half of 2016, revealed that HR teams are grappling with gaps in their benefits strategy that include:
Result: Benefits Dissatisfaction
Employers' inability to design benefit strategies that respond to employee needs, and then to effectively communicate the relevance of their offerings, is having a significant impact on employees' appreciation of their benefits. Over 60 percent of employees are dissatisfied with their benefit plans, according to a companion survey sponsored by the firm that was completed by 1,120 employees working for large organizations.
The employee survey found that:
"Global employers spend a significant amount on benefits, on average 31 percent of employee salary. But there's a real risk that they won't see the full return on this investment," said Chris Bruce, London-based co-founder and managing director of Thomsons Online Benefits. "HR professionals understand the link between benefits engagement and broader workplace engagement, but they're stumbling at engaging employees in their rewards."
For instance, by applying data analytics, he advised, "employers can create a benefits strategy based on quantifiable insights into how employees are interacting with their [benefits package] and the benefits that they really want."
A Communications Chasm
Much of the problem also lies in communications, where issues range from outmoded technology to a failure to get personal.
"Almost 70 percent of employees in global organizations want to hear about benefits around key life stages, such as marriage or home purchase, but only 46 percent of employers use these moments as an opportunity to engage with their workforce," Bruce said. "Perceived value of benefits also increases by over 20 percent if employees receive total reward statements, demonstrating the full value of their package."
Moreover, those who received an online total reward statement delivered through a benefits portal perceived their benefits as having a higher value than those who do not, the survey showed. But while 64 percent of employees want access to their benefits online, only 44 percent of employers currently offer this access.
When employees are very satisfied with the technology for managing their benefits, they were almost twice as likely to view their benefits as innovative or unique—93.8 percent versus 46.6 percent, the survey found.
Meeting the Benefits Enrollment Challenge
"The challenge in the benefits enrollment space is that there's too much content, too many decisions and choices to be made," said Kevin
McNamara, enrollment strategist for The Standard, a provider of voluntary insurance products based in Portland, Ore.
"Medical plans are getting more complex, and while voluntary benefits such as critical care and disability coverage can fill in the gaps, at the same time they're creating more options and more things for the employer to communicate," he noted.
Typically during an open enrollment communications campaign, employees are presented with "very thick stacks of paper that have the details. All that clutter makes a very confusing decision path for employees to select the benefits that meet their needs," he said. "Employers are asking us, as a carrier, for more creative ways to get them content, primarily online content and video content in particular."
He referenced a study last year by LIMRA, an insurance industry research firm, which showed that 70 percent of employees would
want to use an online option to learn more about their benefits, and nearly 1 in 4 employers already feel that mobile technology is very important for voluntary benefit enrollments.
People want access to their benefits the same way they conduct other transactions, he observed. To make benefit selections, "they like using the Internet, but they want short snippits of relevant information, and they want it to be available on that device that sits in their pocket—not just on a desktop or by going to a group meeting."
Longer communication materials are necessary to disclose all the features of a plan "but they don't necessarily fit into how employees want to read or view that information," McNamara said. He advised "combining that deep dive with shorter online content and targeted videos" that focuses on the needs that a benefit is intended to fill and how the plan works.
He added, "With all the decisions employees have to make, they need more help now than they ever did in the past."
Related SHRM Articles:
Employees Dazed and Confused by Benefit Choices,
SHRM Online Benefits, September 2016
Open Enrollment Tips for the Coming Season,
SHRM Online Benefits, September 2016
At Open Enrollment, HR Departments of One Step Up,
SHRM Online Benefits, September 2016
Transparency, Decision Support Are Next Wave in Benefits Self-Service,
SHRM Online Benefits, August 2016
SHRM Resource Page:
Guide to Benefits Open Enrollment Season, SHRM Online Benefits, September 2016
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