Employees are taking a more active role in managing their benefits. According to Prudential’s recent “Seventh Annual Study of Employee Benefits: Today & Beyond” (the “Study”), 30 percent of employees say they are doing more homework on their available benefits. They believe they’re making informed decisions, as well: 63 percent say they are confident with the benefits they selected in their most recent enrollment period, an increase of nine percentage points from 2010.
There’s an interesting story behind these numbers: only 15 percent of employees say they ask their human resources (HR) department for in-depth advice on their benefits. That low rate might be partly explained by the reduced size of many internal HR departments, but it also reflects a shift toward using other information channels, such as group presentations and social media.
Enrollment materials continue to be a particularly important tool as 82 percent of employees say they read those materials. These findings mean your clients need effective enrollment materials delivered through the appropriate channels—simply mailing impersonal mass communications two weeks before the enrollment period won’t connect with today’s employees. Consider these strategies for helping your plan sponsors enhance their benefits communications.
Connect needs and benefits.
Employees won’t spend their money on benefits that they don’t perceive as valuable. For example, a LIMRA study, “Facts About Life 2010,” found that 50 percent of employees would have financial insecurity if the family’s breadwinner were to die.
But a 2011 Prudential survey showed that only 40 percent of employees thought life insurance was important. The disconnect between the potential financial impact of disability and the value of disability insurance was even greater, putting employees at more of a financial risk.
It is the insurance carriers’ role to help identify and close these gaps through education and communication. The traditional approach has been to focus on enrollment materials and those materials are still vital. As a benefit consultant or plan advisor, however, you can introduce plans to additional education and delivery methods.
These can include personalized communications, online presentations, webinars, video-based presentations and social media, among others. Many employers have the infrastructure required to use these communication vehicles. By providing employers with quality educational materials delivered through multiple channels, you can increase the odds that employees will “connect the dots” between their financial needs and the benefits solutions available to them. Connecting the dots will help them take action to close critical coverage gaps.
Very few people bother to read impersonal junk mail or spam email messages. This applies to benefits communications, also: Prudential’s research shows that 88 percent of employees say they want tailored communication versus generic “dear employee” messages. If your clients don’t personalize their benefits communications, they risk failing to fully engage their employees. Companies can use several approaches to increase personalization.