Maximizing the Value of Your Employee Benefits Program
by Mary Ford, Productivity
Partner, Spectrum HR Solutions
mary@spectrumhrsolutions.com
Employee compensation is about a lot more than what you pay your employees. Utilizing personalized employee benefit statements can help you to communicate the total value of your employee benefits program to your employees and open their eyes to their "hidden paycheck". Industry studies show that while employers spend an average of up to 40% over payroll on benefits, most employees have no idea what benefits they have or how much those benefits are worth. Generally over 50% of your workforce does not understand all the benefits offered and the value of their total compensation. This statistic is astonishing when you consider the low cost of providing each employee with a personalized benefit statement in the grand scheme of employee communication.
A benefit statement is a personal summary of an employee's compensation and benefits, including an estimate of the cost to provide those benefits. It highlights the value the employee receives from the company over and above the regular paycheck. Plus, because the statement can be used to confirm such information as benefit elections and beneficiaries, it also helps HR verify the accuracy of benefit records.
Comprehensive benefit statements are always a valuable communication, recruiting and retention tool. They can be used to attract new employees, improve employee morale, reduce employee turnover, and to retain the best employees. Communicating the value of your total rewards program is critical for engaging and motivating employees. If employees are not aware of the full value of their total rewards package, then your organization's return on investment is significantly lower than it should be.
You can communicate the value of your benefits program through attractive and affordable benefit statements showing your employee the value of their total compensation in an easy-to-understand format. Depending on your budget and imagination, your benefit statement can be anything from a basic one-page summary to a medium level complexity report to a personal portfolio with lots of personalized graphs and charts. Production can be as simple as black ink on one sheet of white paper to fold-outs or multi-page reports with special covers and bindings. Four factors play a key role in cost: the number of employees, the number of benefit plans, the complexity of the benefit plans, and the production approach you select. Cost also depends on the scope of the work: the amount of computer programming needed and the complexity of statement production (art work, printing, assembly, and distribution).
When providing employees with benefits statements, there are several factors to consider regarding the demographics of the organization’s employees. Are employees older, younger, married, single, or do they have families? What language is primarily used in the home? Are employees computer-savvy, or will a print version of the compensation statement be more beneficial than online? Is the employee the decision-maker of benefits or is the spouse/domestic partner of the employee? Also to consider is whether or not it is important to track those who read the statements. Online benefits statements can easily be tracked by clicks throughout the site. However, unless there are incentives or a call to action, such as a survey, it is difficult to track response to printed benefits statements. The last important point to remember is regardless of how important the information, statements will not be read unless creative communication is used to entice employees to read and participate. The employee benefits statement must be user-friendly, appealing to the eye, and easy to understand instead of a weighted and wordy document. It must be personalized, simple, concise, and speak the employee’s language. As a precautionary measure, employers should send out benefit statements that emphasize that amounts are estimates and reserve the right to correct any inaccuracies, and should ask participants to certify the accuracy of all personal information and benefit elections in annual benefit statements.
Benefit statements usually summarize the year that has passed, so they generally print after the close of the calendar year. To be effective communication tools, you want to distribute your statements as soon as possible after year-end. As with any first time effort, there's some "behind the scenes" work that must get started. Now is the time to develop your benefit statement. Remember, it takes time to make decisions, develop content, define information fields and data sources, and run tests.
You're spending thousands of dollars providing your employees with statutory and fringe benefits - shouldn't you be getting your money's worth? Attract, Motivate and Retain your most valuable asset...your employees.