Better Employee-Benefits Communication Means Happier Workers

Robertson identified several challenges from an employer’s perspective. “We’re still seeing employers looking at cost containment, whether that’s passing on some of the costs of increased premiums to employees, or perhaps reducing the benefits themselves.”

That particular challenge leads directly to another: disgruntled employees unhappy about higher costs and fewer benefits. “There are some that have reached that level of acceptance where they’re making changes proactively, whereas there are some that are still at that anger stage, and these are the ones you need to worry about. Even though they’re a minority, they’re probably a vocal minority.”

Other challenges include operating with a lean benefit budget and a tougher legal environment.

To meet those challenges, Robertson said they’re seeing employers increase communications with employees regarding benefits. “We’re seeing a lot of employers who are increasingly using total rewards statements to look at it from a holistic point of view and put together all the benefits so employees can see how it impacts their own personal financial situation.” Customized and targeted benefit statements are also popular.

The most important return on investment for better benefits communication, Davidson said, is the reduction in the number of employees who delay retirement. “Employees who no longer want to work—they’re not engaged, they don’t want to work but they have to for financial reasons—this group of employees ends up costing the company a lot of money, both tangibly and intangibly,” she said. Those costs include the difference in salary a company pays an older worker compared with a younger counterpart, higher health care costs and the presenteeism and drop in performance and productivity they suffer because they don’t want to work.

Davidson stressed that not all employees will experience that drop in productivity and value to their company as they near retirement. She related a story about a law firm Financial Finesse recently spoke at where some of the partners were in their 80s and still highly engaged in the firm. “In their case, they don’t want to retire and they’re a net asset to the firm, but that is not the reality for most employees.”

Second, benefits communication helps retain talented employees. Davidson said 94% of employees say benefits are an important reason to stay with their company. “The more they appreciate, understand and maximize the value of their benefits, the more likely they are to stay, and intellectual capital makes it incredibly important to retain talented employees.”

Finally, employers can realize lower health care costs when their employees understand the value of their benefits. “There’s significant connection between health care costs and decreases in financial stress and better adoption of health and wellness programs,” Davidson said.

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Read Want a More Profitable Firm? Let Employees Work From Home by Angie Herbers on AdvisorOne.