Benefits Communication and Education Grow in Importance

Employees who receive quality benefits education are more likely to feel valued by their employer and have a positive perception of their company. They also say they’d tend to stay with their current employer, even if offered a position with similar pay and benefits elsewhere. This testament to the importance of benefits communications comes from a survey commissioned by insurer Unum and conducted by Harris Interactive, and shows the connection between how well employees understand their benefits and how engaged and motivated they are at work.

In addition to the content and presentation of the communications materials themselves, the survey indicates that giving employees enough time to review communications, as well as using a variety of media, are keys to communications’ effectiveness. Employees who had more than three weeks to review benefits education materials were far more likely to say that they had enough time to make informed decisions. And, using at least three different forms of media-such as meetings, printed materials and Web site tools-enhances communication effectiveness because it recognizes different learning styles and helps ensure that the messages sought to be conveyed will be heard by all employees.

These themes from the Unum survey are particularly significant today, because employee benefits communications have taken on increased importance, for a number of reasons-

Employees must make more choices for their benefits today than ever before.

In previous generations, employers that offered employee benefits typically provided a health plan, a pension plan, and some life and disability insurance. As health care costs exploded in the 1980s and 1990s, and increasingly shifted to employees, employers introduced multiple health plan options requiring employee choice. Simultaneously, in most workplaces, the company retirement plan morphed from a defined benefit pension plan to a 401(k) plan, requiring employees to choose whether to participate, how much to contribute, and what funds to invest in. Supplemental life and disability options became more available to most employees, along with an array of other voluntary benefits choices (group legal, long-term care, group auto/homeowners, etc.).

Given the array of benefits choices employees now face, education and communication efforts have taken on huge significance, since decision-making that is informed is most likely to result in appropriate choices. While the benefits choices available today do address employees’ individual needs, they also generally pass on to employees more responsibility. This trend first surfaced in the shift from defined benefit pension plans to defined contribution 401(k) plans, in which employees bear the investment risk. More recently, employers’ increasing adoption of consumer-directed health plans takes a similar path. Employees enrolled in these plans shoulder more of the financial responsibility for their ongoing health care costs, in exchange for a lower plan premium. For both 401(k) plans and consumer-directed health plans, education and communications supply the information that is critical to exercising the increased level of responsibility employees bear.

Getting the best value for one’s money is always important, but it’s even more so in a difficult economy.

When money is tight-like it has been both for companies and employees lately-we want to make sure we spend our dollars wisely…and information is key to making good and appropriate purchases. Surveys indicate that most people spend much more time on other consumer purchases than they do on employee benefits enrollment-which, for many employees, is among their most significant purchases in any given year. Benefits communications can help employees make good spending decisions about their employee benefits.

  • Today’s benefits plans are more complicated than ever before. Consumer-directed health plans, for example, work dramatically differently than plans employees were covered under only a few years ago. These plans offer tax advantages to employees, but this too adds a layer of complexity for employees to understand. Again, effective communications can make a difference in enabling employees to get the greatest benefit from these plans.

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