Better ROI From BenefitsMike Simonds
Benefits are the second most important driver of job satisfaction, coming in just behind job security, according to the Society of Human Resource Management. Further, research by Unum shows a direct connection between how well employees understand such benefits as health, disability, and life insurance and whether they feel valued and engaged at work. In a climate of economic and regulatory uncertainty, employers must take three steps to ensure the strongest return on their investment in benefits. 1. Offer the right choices As people work past "normal" retirement age, for the first time in history the workplace contains four distinct generations: the "traditionals," who were shaped by events following World War II, followed by Baby Boomers, Generation X, and finally, Generation Y, who don't remember a world before the cell phone. These employees represent a range of ethnicities, and their home dynamics are redefining family. The one-size-fits-all benefit packages of the past don't meet the needs and expectations of today's workforce. Instead, employers should assemble an array of "voluntary" benefits: a flexible range of choices and funding possibilities from which employees can choose. Baby boomers, who may need to care for their own children in addition to aging parents, are more likely to opt for long-term care insurance. At the other end of the generational spectrum, members of Gen Y may be accountants or programmers during the week—and adventure sports enthusiasts on the weekends. This portion of the workforce is more likely to want accident insurance. Voluntary benefits eliminate the guesswork and frustration for employers trying to create plans that meet individuals' needs. 2. Be creative in managing the costs. The social dynamics discussed above have taken hold during a time of unprecedented economic pressure. Employers must manage benefit costs—stabilizing expenses and making them predictable. At the same time, employers need to build robust benefit packages to attract and retain talented employees. This balancing act is moving employers to shared funding or employee-funded benefits. The same pattern has played out in the retirement market, where the employer-funded pension has given way to the 401(k) model of shared contributions. For life insurance, for example, an employer may provide a base level of coverage and offer employees the chance to purchase additional amounts at group rates. Or an employer may need to stabilize costs by limiting health-care coverage or increasing deductibles. To help fill the gaps, employees may purchase supplemental medical or critical illness insurance. 3. Strengthen the connection with employees. Employees need to feel valued and engaged. Research clearly shows a direct connection between how well employees understand their benefits and their perception of, and loyalty to, their workplaces. In an Unum survey of more than 1,100 workers, employees who reported receiving quality benefit education were nearly twice as likely to say their employers care about their well-being, and 70% said their employers value their work. Among employees who said their benefit education was fair or poor, just 41% said they believe their work is valued. Quality benefit education is a simple, effective way employers can show employees that they are appreciated. The approach to communication, however, should be as diverse as the employee population. Employers should work with a benefit provider that uses at least three different forms of communication: visual (videos or printed materials with images), auditory (podcasts, videos, or in-person talks), and hands-on (online interactive tools). Employers should also give workers ample time to review the materials and ask questions. Unum's research shows that employees allowed three weeks or more to review benefit education materials were far more likely to say they were able to make informed decisions than those who had less time. Three weeks gives them opportunity to: Take materials home to share with a spouse Evaluate their personal situation Attend any informational meetings offered Consult with family or friends Do benefit research online Owing to expansion of the foreign-born workplace, employers should provide multilingual brochures and application materials as well as access to bilingual customer service representatives who can assist them on the phone. Employee benefits are one of the clearest ways employers can demonstrate their appreciation for the work employees do every day to build their success. Ensuring that employees understand and value those benefits helps strengthen the foundation of a relationship that benefits everyone.
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