Help Employees Understand the Value of Their Benefits

Benefits are free.

Well, butterflies are free, but benefits are not. In fact, companies spend 43% of their payroll on benefits, on average. So, what looks “free” to employees isn’t free at all.

In a story called “Do Employees ‘Get’ Benefits — Not,” writer Susan Heathfield summarizes recent research by Charleton Consulting Group that says employees significantly undervalue their benefits:

Even more of a mystery than compensation, though, is the cost and the value of your benefits. According to a survey conducted by the Charlton Consulting Group and analyzed and reported in the HR Daily Advisor, employees “estimate the cost of benefits pay to be 30 percent or less over and above pay. In fact, according to government statistics, the average cost of benefits is nearly half again that … 43 percent of pay.”

Here’s what works:

1. Tell them what they have. Seems simple, but just writing out a list on a mimeographed piece of paper or burying information five clicks deep on your website doesn’t count toward “telling them.”
2. Write in plain English. Okay, if you’re in Denmark, write in Danish, but make it a plain Danish. Fancy words and legalese don’t work. Write like you talk, unless you happen to be Sir Lionel Barrymore, in which case you can write Benefits: The Shakespearean Sonnet.
3. Don’t lead with “look at all we’re paying for you.” Kids hate this one. I know mine do. “Look at all I do for you” is annoying at best, and cloying at worst. Sure, you want employees to be able to understand how much money it takes to fund benefits, but leading with that is a sure-fire way to get them to stomp on your total compensation statement.
4. Make clear and simple pictures of what you invest versus your competition. Too many times employees leave for “a dollar more an hour” only to discover that they’re giving up a LOT more. People think in pictures in their heads. Know that. (I wish I could draw a picture right here.)
5. Tell them more than once. Yes, it’s great to tell employees about their benefits at orientation and then again at open enrollment. But that’s not enough. The way to reinforce the value of benefits is to communicate regularly about benefits. Maybe just one at a time would do. How about pushing information about your long-term disability insurance? That’s one that often takes a small investment by the employee but can be highly valued and essential if they are ever injured. Make your communication come in bite-sized pieces and frequently.

About the Author

Frank Roche

Frank started IFRACTAL over 7 years ago with Sarah Chambers. Together, they've created HR communications and HR software for some of the world's leading companies. Frank is also studying Flamenco guitar and origami.

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