Communications Are Most Important Factor in Generating Satisfaction with Benefits
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Effective communications can have as much impact on employees’ satisfaction with their benefits as the actual benefits offered or the amount of money a company puts into a benefits plan. This finding, from a study by the Prudential Insurance Company, illustrates one way for companies to contribute toward positive employee morale, even when economic factors necessitate benefits cutbacks or restructuring.
The study looked at a number of variables that affected employees’ perceived value of their benefits. The effectiveness of communications topped the list, followed by a company paying all or most of the cost of benefits and then by a company offering a range of benefits. According to the study,
how employees perceive the value of their benefits directly influences how important benefits are to employees when selecting a job or when deciding whether to stay with a current employer.
This is because effective communications help employees to not only understand, but also appreciate, the benefits they have or those that are available to them. Thus, the study validates the positive connection between employee benefits and an employer’s recruitment and retention efforts.
A separate survey from Watson Wyatt Worldwide dramatically shows the impact of benefits communications: Companies with above average benefits but ineffective communications had a 25% employee satisfaction level, while those with below average benefits but effective communications had a 76% employee satisfaction level. Stated another way, it can be better for a company to provide fewer benefits but explain them well, than to provide an expansive-and costly-package of benefits that employees don’t really understand.
Keep the following considerations in mind when assessing your benefits communications-
- Written communications should be in simple and understandable, yet engaging, language. Employees will respond best to communications that they can directly relate to, so use specific examples or modeling tools to help employees select benefits and understand how the benefits can work for them.
- Recognizing that different individuals learn in different ways, use various media at your disposal for your communications. Go beyond written communications to also include emails, meetings/seminars, announcements, posters that highlight images and graphics, interactive web tools, and video conferencing.
- Communicate throughout the year, not only during open enrollment. Use non-enrollment periods to highlight particular features of your benefit plans, perhaps focusing on one each month. This enables you to hone in on benefits or plan features that are particularly useful or unique, and that perhaps get overlooked during the frantic activity of annual enrollment. Such features might include wellness features in the company health plan, modeling tools available through the 401(k) plan, the advantages of pre-tax employee contributions, changing benefits during the year in response to a family status change, etc.
- Help employees understand how the company’s benefits offerings are particularly relevant to them. For example, if your company offers voluntary benefits, employees are likely to have broad choices that go well beyond the one-size-fits-all approach to employee benefits. Highlighting the convenience, access and cost-savings features of workplace voluntary benefits can help employees see how advantageous such offerings can be to them.
- Communicate the full value of your benefit’s program by providing regular benefit statements. Reminding employees of their total compensation is a great way improve your employees’ perception of existing benefit programs.
If the prospect of embarking on a benefits communications campaign seems daunting, give us a call. We can help you provide ideas and strategies along with actual communications materials to enrich your employees’ understanding of their benefits.
Don’t underestimate the value of communications and education as a way to strengthen your company’s benefits package. As the research above indicates, dollars spent on communication and education can be as valuable an investment as dollars spent on the benefits themselves.
Be sure to take a look at a few of our sample benefit communications pieces online or give us a call today.
Use Communications to Involve Employees in Health Plan Spending Control
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Implementing cost-sharing increases or cutting benefits in an effort to bring health plan costs under control can be unpleasant tasks for employers, with concerns about how the news will impact employee productivity and morale. The better employees understand the reasons such plan changes are necessary, however, the lesser the chance that the changes will have a negative impact.
Employee communication materials like total compensation statements, total reward or benefit statements are great tools to help explain and communicate changes to programs.
According to the 2009 UBA Employer Benefit Pers
- Make sure employees are aware of the reality of health care costs. Research and publicize to employees national health care cost data and cost trends. Be specific: for example, contrast the average cost of a hospital stay or doctor’s office visit today with that of five or 10 years ago. Do the same for the average cost of coverage under various types of health plans.
- Share specific cost data from your company’s health plans. Employees frequently think of the cost of the health plan only in terms of what they pay in premiums, and overlook the employer’s contribution. This narrow view hides the true cost of health care coverage, as well as what the employer pays toward the cost of coverage (which, ideally, employees should see as part of their total compensation package).
- Use concrete examples to illustrate how health plan spending can cut into the ability of the company to make outlays in other areas. For example, determine the approximate dollar amount increase in the company’s health plan contribution one year to the next, and compare it to some other company expense. Is the amount of the increase equal to an employee salary? Stated differently, has health plan spending growth prevented a needed hiring? Use this process to show how health plan cost increases can eliminate raises and bonuses, result in the cancellation of company events, delay the purchase of new equipment, and the like.
- Help employees see that when they use their health benefits astutely, they not only save themselves money, but also keep plan costs down as well. For example, when employees use preferred providers, they receive the highest plan benefit, and the plan pays the lower, negotiated preferred provider rate. If employees have begun to understand the point above-how health plan spending can impact salary increases, staffing, investment in equipment, etc.-this can motivate them to use the plan more wisely.
- Use statistical data to show employees how, generally, unhealthy people use more health care, resulting in higher plan costs. If employees accept this, they’re more likely to try to follow recommended preventive care schedules, attempt to change unhealthy behaviors, and overall aim to become more physically fit.
Employers want employees to be active participants in controlling rising health care costs. To-the-point communications can bring employees on board in this effort, resulting in more manageable costs for employer and employee alike.
Contact us to discuss how we can help you to communicate with your employees.
January 31, 2010
Benefits to Consider as the Work Force Ages
Categories From Our Newsletter, News
If you thought you looked a little older this morning as you got ready for work, you’re not alone. According to a 2008 Business & Education Resources Study examining shifting workplace demographics, the percentage of employees who are 40+ has increased year after year. In 1990, 40% of the workplace fell into this distinguished category. In 2000, 48% of workers were 40+, and by 2010, 51.4% of U.S. workers will be older than 40. These increases reflect the aging of the 78 million baby boomers, those born between 1946 and 1964.
The increase in life expectancy amplifies the boomer effect. Only 100 years ago, the average life expectancy was 47; compared to 77 years today. As we live longer, we may begin to experience increasing age-related changes in hearing, vision, and even dexterity. The sometimes gradual degeneration of vision or hearing can profoundly affect an individual, both personally and in the workplace.
Normal changes in the aging eye include decreased ability to focus at short range, reduced acuity, a need for better lighting, and reduced contrast sensitivity and depth perception. Left unchecked, such problems can result in expensive errors and even accidents, creating the potential for high costs for employers.
According to the American Society on Aging, 15% of the overall population suffers from some type of hearing loss, with 60% of this group over the age of 55. Hearing loss can be a trickier situation to manage than vision degeneration, because it may go undetected or ignored for longer periods of time. Employees with untreated hearing impairment are more likely to miss some of what is being said in group or one-on-one discussions. Verbal instructions may be misunderstood and not followed correctly, which can result in errors or accidents. Overall workplace information exchange can suffer.
Regular visits to an optometrist or ophthalmologist are the best way to promote healthy eyesight, and a good first source to screen for hearing problems is a general practitioner, with referral to a specialist if appropriate. Most hearing and vision problems are readily correctable through hearing aids or corrective lenses. Be that as it may, many employees delay seeking treatment for hearing or vision loss for financial reasons. Postponing treatment can result in the kinds of workplace costs and risks discussed above.
To encourage employees to take care of these important senses, employers can offer vision and hearing coverages as voluntary benefits. Voluntary benefits are paid in full by the employees who choose to purchase them. However, employees typically save money because the benefits are offered at group discount rates, and often save time by learning about the benefits while they are at work. (Some employers do choose to make a contribution to the coverage.)
Voluntary vision care plans are plentiful, and can offer a variety of choices to employees. Usually, vision care plans cover eye exams and corrective lenses (either eyeglasses or contacts). Plan enhancements could include safety eyewear for individuals in certain industries; laser or Lasik surgery; and polycarbonate lenses for children and active adults.
How a vision benefit is provided also varies according to the plan that is selected. Some plans offer discounted fee services and lenses through a list of exclusive providers or retail outlets; others use a preferred-provider approach and pay a larger or smaller benefit depending on the provider used; and still others pay according to a fee schedule.
Hearing care plan benefits might include discounts on audiologists’ fees, and compensation for hearing aids and related products and services (for example, batteries and cleaning).
Voluntary vision and hearing benefits become ever more valuable with an aging workforce, creating a win-win situation: Employees as well as their employers are likely to benefit from better hearing and vision health in the workplace.
Contact Us to discuss how we can help you to communicate with your employees.
