Dude! We're Getting an HMO!!!

You spend 30% of payroll on benefits for your employees.  You'd probably like them to understand the benefits you're spending all the cash on, right?

So, do they actually understand what you're providing?  They can't value what they can't understand, and of course, there's the whole thing about ensuring the spouse understands the benefits as well.

Don't bet on the fact that employees have any clue about the total value of the benefits package you're provdiding.  From CBS Marketwatch:

"Colonial Life surveyed more than 650 human resource managers and benefits administrators at the recent national conference of the Society for Human Resource Management. Employers were asked about the benefits they provide and how much their employees understand those benefits.

More than 90 percent of employers who responded said it was important to their business that employees understand and appreciate the value of their benefits. Only 21 percent of employers think their employees have a good understanding of their benefits. Nearly 5 percent think their employees know nothing at all about their benefits.

In a research study conducted by Watson Wyatt Worldwide(1), a global consulting firm that specializes in employee benefits, employees gave higher marks to employers who provided fewer benefits but explained them well, rather than a richer array of benefits they didn't understand."

If we're rating the understanding of benefits that low in a self-reported fashion, how bad must the reality be?  Additonally, what's the understanding of benefits mean?  With the right investment, can you get the number past 50%? 

If not, should your strategy be to "lead" the market when it comes to benefits?  Is it better, as the Wyatt study concludes, to do fewer things and drive the value proposition harder through a real communications plan?

What leads to increased retention or engagement?

Heavy questions to ponder.  Apparently, it takes more than the "Dude, we're getting an HMO campaign"... 

Comments

[Ann Bares]

Kris:

Good topic and point, one which we all need to be hit hard across the head with. I am amazed by the number of employers who don't even take the basic step of providing benefits - or total comp - statements. Research I posted on awhile back (see link) indicated that 55% of surveyed employers do not use total comp statements (a condition for which there is no excuse, given the technology and host of web-based producers that have made this quite easy and quite cheap to do). Come on people!

http://compforce.typepad.com/compensation_force/2006/11/employers_lag_i.html