The unexpected benefits of effective benefits education; research offers clear guidance on what works and why

The unexpected benefits of effective benefits education; research offers clear guidance on what works and why

By Richard F. Stolz

We all know employees can’t appreciate benefits they don’t understand. But not everyone realizes how strongly linked good benefits education is to the way employees feel about their employers and their financial security.

Once those connections are clear, the big question becomes: How can we help employees understand and appreciate their benefits? The right combination of time and tools can make all the difference.

Making the connection

The quality of a company’s benefits communication program is positively correlated with how employees rate their company as a place to work. And although employers appear to have made progress in raising the quality of their employee education programs over the last few years, there is plenty of room for further improvement, according to a recent survey of more than 1200 working Americans conducted by Harris Interactive for Unum.

Of the 37% of employees who rated their company’s benefits communication program very good or excellent, 81% described their employer as a very good or excellent place to work. In contrast, of the employees who rated their benefits education as fair or poor (25% of those surveyed), only 23% rated their employer as an excellent or very good place to work.

Other factors come into play, of course, including the quality of the benefits menu itself. But even those who do not rate their benefits package highly are more likely to view their workplace more positively when the benefits communication is considered strong.

Impact on financial security perception

“At a time when many employees are feeling uneasy about their personal financial situation, it is particularly important for employers to maximize the effectiveness of their communications efforts,” according to Barbara Nash, Unum’s VP of corporate research and director of the study.

That’s because the quality of their benefits education may be a factor in their sense of financial security. More than one-third (36%) of surveyed employees say they do not feel secure about their finances. But that number is much lower (20%) among those who rate their benefits education favorably. And employees who feel more financially secure also give higher ratings to their employer as a place to work.

Employees were specifically asked about their level of confidence of having funds for future expenses, or to deal with the financial consequences of a significant illness or injury that kept them from working. Half reported they are “not very” or “not at all” confident, an increase from 46% in the prior year’s survey.

Employers that offer disability benefits can help employees alleviate some of this insecurity with effective communication strategies about the purpose and value of the benefit, Nash suggests. “Employees who understand the value of their disability benefits have a stronger view of their own financial security.”

But many employees lack sufficient information with regard to disability benefits. “This is a place where employers need to spend more time helping their workers appreciate the benefits they have,” according to Nash. Only 25% of employees strongly agree with the statement that they have enough information to make a good decision regarding disability benefits. This is understandable since 40% of the employees did not recall receiving any benefits education that specifically explained their disability benefits.

When employees receive benefits information specifically about their disability benefits, however, their understanding and ability to make good decisions is much improved. “Employees absolutely need to have this information, especially as more and more are asked to make choices regarding their participation,” Nash says.

Keys to effective education

What makes employees rate a benefit communication effort highly? One significant factor identified in the survey is the amount of time employees are given to review their benefit choices. Employees who were given at least three weeks to digest and ask questions about their benefit choices rated their benefits education the highest.

Another consideration is the number of learning options employees are given to be educated about benefits. “People have different learning styles,” Nash says. “Our research shows that employers should offer at least three ways for employees to learn about their benefits.” In this year’s survey, the average number of methods available to employees was between 3 and 4 (with larger employers offering more choices). The question is which are most effective.

Traditional brochures and other printed materials describing benefits remain the most prevalent learning format, and according to Nash that’s a good thing; they also have the highest utilization rate by employees, at 71%. “Although employers may see cost savings in doing away with printed materials, there is no question that many employees want to discuss their choices with family members, and this offers the best way of doing that.”

Employees’ preferred learning methods

When employees are asked to identify their preferred methods for learning about their benefits they most frequently select methods that their employer is already offering:

  1. Printed materials they can take home and review
  2. Information personalized for them that includes their cost for the benefits
  3. Access to a website that provides information on the benefits and lists FAQs
  4. Group meetings with the opportunity to ask questions of benefits experts
  5. Online interactive tools that help them calculate their benefits needs

At least for now, mobile apps, online message boards and online chats are not very popular. However, younger employees, predictably, were more likely to prefer these methods than older employees. For the most part, however “younger employees are not that different from older ones in terms of their preferences”, Nash says.

“Overall,” Nash adds, “improving your benefits communication effort might not involve more than some fine-tuning here and there, but the results, in terms of employees’ appreciation of their benefits and of your organization as a place to work, can be very significant.”