According to a recent study by Prudential, many employees’ perceived value and satisfaction with their benefits is declining.
Based on the fifth annual Study of Employee Benefits: Today and Beyond, 45 percent of plan participants who were polled stated that their level of benefits has decreased this year, and only 38 percent think their employer offers a wide range of benefits (down from 55 percent in 2007). Specifically, employees feel they are receiving fewer benefits from their companies and paying more for the ones that are being offered.
This contrasts with the strategy many companies have regarding their benefits package, since 57 percent of plan sponsors said that increasing employee satisfaction with the value of their overall benefits package is highly important.
Why benefits education is the key
Once the job market starts seriously heating up, competition for the best workers could hinge on how a company’s benefits package is viewed as well as keeping current workers on board so they are not looking at the grass being greener somewhere else regarding benefits. The best way to communicate the importance of the benefits package is to be consistently educating employees on the programs, not just for the newly hired, but for the total employee base.
However, for some companies, benefits communication and education is a low priority. Prudential found that “helping employees make better benefits decisions” and “addressing the diverse benefits needs of your employee population” are at the bottom of the list of objectives in terms of importance for some employers, with only 35 percent and 28 percent of plan sponsors rating them as “highly important.”
So, why the disconnect? I think there are several reasons that employers do not prioritize benefits education even though they are very eager to increase employees’ satisfaction with their benefits. The most common ones we encounter include:
- Short staffed HR departments that are forced to triage and focus on only the most urgent issues as opposed to the longer term strategic planning that education requires.
- Concerns about legal liability associated with crossing the line into providing employees “advice” about benefits.
- Cynicism that education doesn’t really work because retirement plan providers have struggled to increase retirement plan deferral rates despite offering online and live educational support.
- Uncertainty about the best way to actually help employees make benefits decisions.
I’ll be doing a special series over the next month with my blogs on how HR departments can overcome each of these obstacles in order to help their employees better manage their benefits – so those benefits actually DO benefit their employees, and keep them engaged, empowered and highly satisfied with their jobs.
This was originally published on the Financial Finesse blog for Workplace Financial Planning and Education.