Do your employees recognize that benefits and their associated cost are part of their compensation?  Financially, the cost of an employer’s benefit package with group insurance and retirement benefits ranges from 30-40% of direct personnel costs. The Bureau of Labor Statistics’ Employer Costs for Employee Compensation puts benefit costs at 31.4% for civilian workers.

However, if you listen to the media and others, the only focus and concern regarding employee compensation is pay and how small merit pay budgets remain. ASE’s 2019 Salary Budget Survey reports merit pay budgets continue at just around 3%. 

If employers simply rely on an employment orientation session to cover the value of benefits, benefits may be lost in the “noise” and the rest of the onboarding process.

If an employer’s benefit communication is left to the company employee handbook, a benefits guide, or a response to an employee’s question, this too may not drive home the true value of the employer’s benefit package.

If your organization provides an annual or more frequent employee benefits report, you are on the right track. A customized benefits report provides each employee a breakdown of all benefits and their value (what the employer pays for them). The report includes pay and even work-life benefit programs to inform each employee what their total compensation is.

To take benefit communication to the next level, it is recommended employers consider a more robust “marketing” approach to further implement successful benefit communication. Commerce Clearing House July 10^th Ideas and Trends issue reported on a presentation; Benefits Engagement: The 10 Keys to Unlocking Benefits Communications given by the benefit consulting firm Segal Benz. The presentation outlined additional components to a benefit communications program. These components consist of:

• Feedback – Gather data and insight into what employees want in their benefits. Feedback can be obtained from employee focus groups, surveys, and user testing.

• Keep the Benefits Simple – When communicating about a benefit, simplify the details. Avoid the legal caveats/disclaimers and focus on what the benefit does for the employee and their dependents (if appropriate). Leave the technical communication requirements to the Plan Documents and Summary Plan Descriptions.

• Year-round – Segal Benz recommends a multi-channel and year-round approach that is intended to spread the benefits information into smaller “bite-size” chunks. This can be done through benefit summary guides, newsletter updates, post cards, employee meetings, health fairs, and teaching your managers how to promote benefits and intelligently answer questions at their employee meetings.

• Target Messaging – Because workforces are diverse in their make-up (older-younger, family-single, higher paid-lower paid) the content of benefit messaging should be adjusted for relevance to the particular groups. Segal Benz recommends getting creative in slicing and dicing communications about the benefit programs.

• Employee Experience – Take a look at what it takes for an employee to access the benefit, use the benefit, and make changes to the benefit.

“If something takes 11 steps through different platforms to accomplish, employees are going to disengage and not complete the process.” If the benefit program is too complicated or time consuming, it will not be appreciated by employees and therefore will lose its value.

HR and benefit professionals need to plan for better benefit communications. This means including the benefit communications program in the budget for benefits. To get management on board with better communications of benefits, consider these tips:

• Remind them of the overall cost to the employer for these benefits. At 30-40% of total personnel cost, this should get them thinking.

• Second, determine the cost of voluntary turnover. How much turnover might have been due to the employee receiving a modest pay increase and not full recognizing the value of your organization’s benefit package.

• Third, ensure that the organization’s benefit package is competitive. ASE’s 2019/2020 Michigan Policies and Benefits Survey and the 2019 Healthcare Insurance Benefits Survey (see this week’s article) provide excellent data on competitive benefit programs.

• Lastly, do a cost/ROI estimate of the benefit communications budget needed to more effectively educate employees on the value of benefits. As an HR professional, providing the Operational and Financial departments this cost analysis will go a lot farther than a simple anecdotal recommendation to talk more about benefits.

ASE Additional Resources
Benchmark Surveys – To access the results of any of the surveys mentioned in this article please contact the surveys department at [email protected].

Source: CCH Ideas and Trends (July 10,2019) HR INSIGHT—Experts recommend marketing approach to benefits communication