Wellness Programs Call for Better Benefits Communications

Wellness programs are all the rage this year. But what’s the point of a program that employees don’t understand and, therefore, don’t use? Midwest Business Group on Health has done some research evaluating employee engagement in health benefits and wellness programs.

What they found: Employees still do not understand their benefits. Part of the reason why employees are having trouble meeting their wellness goals is a lack of good communication and resources. MBGH found, “Most employees and dependents don’t fully understand what health care benefits are available to them nor do they fully comprehend the summary plan description (SPD) or what requirements they need follow to achieve incentives (i.e. premium differentials) that may be part of the benefit plan design. As a result, communications efforts frequently go unnoticed, are ignored or misunderstood by the employee.”

According to MBGH, employees want:

• Clear, concise communications
  • “Employees indicate they want clear and concise communications on benefits and what’s available to them, such as cost, coverage, co-pays, benefit changes and who is in their physician network.”
  • Better tools and resources 
    • “Provide employees with best-in-class tools, resources and support, and make it convenient for them to have access to this information at any time.”
    • The ability to easily share information with spouses
      • “Include family members, especially spouses, in providing information about health care benefits and workplace programs.”

So, you may want to re-think some of your current approaches to benefits communications that probably involve a lot of lengthy documents locked behind the firewall.  Here are some quick tips:

• Establish a public website that provides on-demand access to employees and all family decision makers.
• Aggregate everything an employee will need to make educated decisions in a clear, organized way. Include plan docs, calculators, and links to enrollment and carrier websites.
• And most importantly, understand the role of the benefits guide.  It may have a place for those employees who want all of the juicy details but shouldn’t be something you lead with.  Pull out the most important points and serve them to employees in plain, non-jargon language. Your average employee is not going to understand all the insurance terms, let alone read through all of the dense plan docs. So make it easier on them with short, straightforward benefits communications.

Benefits communication used to engage and retain employees as economy improves

Mercer recently announced the results of their Attraction and Retention Survey, covering over 320 employers this year. These are their most valuable findings:

Better economy means higher employee turnover. As the economy and job market continue to improve, 62% of companies think employee turnover will increase as well. When employees have more options, they are less likely to be loyal unless their company puts effort into keeping them.

Companies are expanding again. The economy is picking up and so is hiring. Nearly all companies surveyed are hiring. In fact, only 3% are reducing their workforce. Nearly one-third (27%) of companies are expanding, up from 12% shown in the 2009 Unprecedented Times Survey. This is a clear sign of companies’ confidence in the economy.

Companies are concentrating on engagement to retain employees. Employee engagement has increased in 47% of companies in the last 12-18 months, likely thanks to companies’ specific efforts. Engaged employees are less likely to stray and have higher performance levels, according to a Mercer principal. Retention is as important as expansion, when other employers can lure good talent away.

Benefits communication is the highest contributor to increasing employee engagement. Organizations have increased non-cash rewards as a means of retaining and engaging employees in the past 18 months. The reward most often used was benefits communication, which companies have used 27% more. Even as the economy improves, non-cash rewards serve as an important means of curbing turnover. Non-cash rewards are a good way of communicating confidence and appreciation for employees. It is also much cheaper to implement rewards programs than to hire new replacement employees. If employees don’t understand, value, or even know about these rewards then they won’t merit much. That’s why benefits communication has become such a vital resource for companies to keep employees engaged and loyal.

Financial Wellness ROI

who “tough it out” and come to work but operate far below normal productivity. But, there are many types of presenteeism.  There could be any number of reasons why an employee checks out and productivity suffers.  And, while presenteeism is a relatively new term, you likely have some established policies in place for helping employees stay focused at work.  For instance, over half of US companies have blocked access to Facebook, Twitter and MySpace.  Presenteeism, in its entirety, is a huge productivity issue that far exceeds that of absenteeism.

To say that presenteeism is an ambiguous problem is certainly an understatement.  It’s impossible to measure, difficult to address and simply acknowledging that presenteeism is an issue at your organization tends to imply that the company is not well run.

But, you may find that you can take steps to address the core drivers associated with presenteeism.  And by taking steps to proactively address those core employee issues, you can solve a large portion of the problem.  Similar to the issue of employee stress, recent studies show that employee money issues are a major root cause driver of presenteeism.

Think about it for a moment.  If you were in debt trouble, on the verge of losing your home or had your retirement cut in half due to the recession, wouldn’t you spend time at work dealing with these issues? Even the model corporate citizen would have trouble answering “no” to this question.

But just how big is the problem?  Well, the Personal Finance Employee Education Foundation recently did some studies on personal financial distractions in the workplace.  You can estimate the annual cost of financial distractions at your organization with this calculation:

1. Employees in your organization: ______________
2. Divide by 4 (1 in 4 employees is in financial distress on average)
3. Multiple by 16 hours (distressed employees spend 12-20 hours per week at work on money issues)
4. Multiply by 12 months in a year
5. Multiply by average hourly wage of your employees:__________

For example, an organization of 1,000 employees has approximately 250 financially distressed employees.  The company loses 16 hours of productivity per month for each of these employees which results in 48,000 hours of total lost productivity per year.  Assuming an average annual salary of $50,000/year, this company incurs $1,200,000 per year in lost productivity from financial distractions.

This is just one of several important issues that drive the need for financial wellness in the workplace.  If you take the time to sit down with the numbers, you will likely find that introducing these types of programs may be one of the higher ROI initiatives you have available to you.

Consider for a moment the staff time and dollars go into facilitating New Hire Training and Open Enrollment each year.  Many companies we’ve met with offer half-day New Hire orientations on a near weekly basis.  Not to mention the time and effort that goes into the creation of the stacks of paper that employees receive on their first day.  Open enrollment presents a similar situation.  Each year, HR staff offer a collection of live seminars to explain benefits changes, often preceded by brochures, mailers and the like.  Despite all of this effort, nearly 80% of employers believe that their employees do not have a good understanding of their benefits.

Many employers have asked us how they free up their valuable, and in many cases shrinking HR staff to work on strategic projects while improving rates of benefits understanding among employees.  In addition, finding ways to communicate effectively has become an even higher priority as employers prepare to make difficult announcements about cutting programs and/or asking employees to take on a greater share of health care costs.

Our answers to such questions naturally start with what we know to be true about today’s employees:

• First, given the trend of increasingly distributed workforces and the importance of family decision makers, on-site seminars fail to provide reach
• Next, given the explosion of web multimedia and sites like YouTube, employees have become accustomed to rich, short-form content.  The busy professional of today simply does not have the attention span to thumb through lengthy benefits documents.

GuideSpark’s Benefits Learning Center modules embrace these trends to provide a modern and engaging multimedia solution capable of reaching your distributed workforce and their families.  This online solution automates open enrollment and new hire training workflows to free up valuable resources.  Employees have on demand access to a library of multimedia benefits presentations, allowing them to direct and personalize their learning experience.  In addition, these modules offer custom checklists for open enrollment and new hire on boarding, so that employees can conveniently track their progress.

Please take a look at the New Hire Training and Open Enrollment demonstrations on our site to better understand the power of these new modules.

It may surprise you to learn that over 50% of employed Americans received a majority of their financial and health products from their employer, making employer-sponsored benefits a critical aspect of an employee’s overall financial wellness.

If there is one statistic that encapsulates the problem that GuideSpark is attempting to solve with our Benefits Learning Center solution, it is this one: “4 out of 5 employers believe that their employees don’t have a good understanding of their benefits.”

Amazing, isn’t it?

U.S. employers spent approximately $1.5 trillion on benefits (18.6% of total compensation) in 2007 and yet only 21% believe that they have been effective in educating employees on this key element of compensation.

So, the question becomes: with all that’s at stake, how do employers like you fix this problem? Well, the first thing to do is to admit that the benefits handbook and other text-heavy approaches to communications are failing you, your benefits investment and your employees. Now, accept that the way that employees learn and get information has fundamentally changed and in a Web 2.0 world, benefits communications must be:

1. Accessible. Workforces are becoming more and more distributed each day and an employee’s family makes up 60-70% of an employer’s health care cost and are often the ones making the decisions.
2. Engaging. The attention span of the busy professional is short and shrinking. Short-form, interactive education is what an employee expects in this world of YouTube and Twitter.
3. Collaborative. The web has become a marketplace of ideas and experiences. Provide your employees with opportunities to understand what decisions colleagues are making and allow them to learn from one another.
4. Ubiquitous. Stay in front of your employees by leveraging the latest forms of communications including blogs and micro-blogs (Twitter).
5. Personalized. Integrate planning tools and calculators that allow employees to take what they’ve learned and apply it to their situation. Provide an easy on-ramp to personalized support from experts.

If you follow these principles and put together a highly effective benefits communications strategy, studies show that you can reduce the cost of benefits by 10-20% and significantly improve productivity and retention. To learn more about how to leverage Web 2.0 techniques at your company, please download our white paper.

While many HR professionals concede that their employees have a poor understanding of their benefits package, most underestimate the impact of this situation on their bottom line.  Employees who don’t understand their benefits are more likely to:

• Make poor election decisions, driving up benefit costs
• Access benefits information in the most costly way possible – through calls to your human resources staff and call center
• Be less satisfied with their compensation and more likely to leave

Benefits communications is a critical tool for managing costs in this environment.  Our offerings are targeted at improving the failing rates of benefits understanding among employees today to help employers realize the full value of their considerable investments in benefits.  We move far beyond the standard fare of thick benefits handbooks to provide a comprehensive curriculum of engaging multimedia education for today’s employee.  By providing more modern and more effective benefits communications, employers can cut the cost of benefits, while motivating and retaining employees.

Customers of the GuideSpark Financial Wellness Center can now provide employees with online and telephone access to personal financial coaches. These financial coaches have extensive financial backgrounds to help users through a variety of situations, whether it’s creating a new financial plan or helping solve an urgent financial issue.

This new coaching service extends GuideSpark’s comprehensive financial wellness solution beyond education, tools and information to include personalized support for employees. Personalized support is an important step for putting individuals on the path to improved financial health.

The GuideSpark Financial Wellness Center leverages the latest technologies and services to provide corporations and organizations with the most complete financial wellness solution available on the market. Our solution provides employees with a single financial hub for both personal financial planning and employer related planning, including detailed employer benefits education.