The Secrets to Better Benefits Utilization & ROI

If you’ve ever wondered how employees feel about their benefits, here are a few noteworthy insights from the 2018 MetLife Benefits Study:

  • 62% of employees surveyed say benefits were an important reason they accepted a job with their employer.
  • 87% say that having insurance and benefits gives them peace of mind.
  • 71% say they worry less about unexpected health and financial issues thanks to their benefits.
  • And 73% say that having benefits customized to their needs increases their employer loyalty.

Clearly, benefits matter to employees—a lot. But this raises a question that continually vexes employers: if benefits matter so much, why do employees rarely utilize them to their full advantage?

The MetLife study chalks up this utilization conundrum in part to poor “fit.” In short, benefits often aren’t sufficiently tailored to employees’ needs, they fail to provide adequate flexibility and choice and they’re lacking in much-needed nontraditional perks such as financial counseling. In fact, MetLife’s 2017 study reached similar conclusions, noting that employers who deliver tailored benefits “help an increasingly diverse workforce find the security it’s looking for.”

However, fit isn’t the only issue standing in the way of better benefits utilization. The sad fact is many employees simply don’t understand their benefits or even know about all of the programs employers offer them.

The correlation here is pretty straightforward: where understanding and awareness levels are low, utilization rates will follow.

More Communication and Education Are Essential

More Communication and Education Are Essential
Just how widespread is this problem? According to a Harris Poll conducted for the AICPA in April 2018, only 28% of American workers are very confident they’re using their benefits to their fullest potential. The vast majority of employees need help in understanding the value of their benefits and putting them to use properly.

“Benefits can be confusing and they require incredibly clear communication,” noted MetLife. “When benefits information is easy to understand and framed within an employee’s reality, they see the personal value of a benefits experience.”

Indeed, educating employees on the “personal value” of their benefits is the key to unlocking greater utilization. The 12 members of Forbes magazine’s Human Resources Council recently examined the benefits utilization challenge and offered strategies on how HR can improve the situation. Here are a few:

  • Develop a Benefits Communication Plan—While HR professionals are well versed in all aspects of the company’s benefits, “the average employee is often less conversant in issues such as vesting, match, copay, deductible, in/out of network, etc. Crafting plain language communications is part of the formula. Work with your communications department to develop a multichannel communications strategy.”
  • Educate in a Variety of Ways—“Individuals learn in many ways, so HR should provide a variety of platforms to share this information. HR can provide Q&A sessions onsite, various printed and digital mediums distributed to employees and around the office, webinars for those who work remotely, record videos to share with employees and email important updates, reminders and share information on a regular basis.”
  • Make Everything Less Complex—One member of the Council observed, “In all the years I’ve been in HR, I’ve never encountered a person who didn’t want to fully utilize their benefits. They simply didn’t understand how to navigate the complexity or how all the benefits worked. I’ve found that making myself available for a number of days following an enrollment period and checking in with new employees to better explain the benefits really helped.”

Take a Cue from Marketing Principles

Take a Cue from Marketing Principles
Another key thing HR can do to raise benefits utilization is to think and act like a Marketing department. That means borrowing a few of their strategies, which are specifically designed to cut through the clutter of the marketplace, educate buyers and motivate them to take action. You want these same outcomes with your employees.

Here are three Marketing strategies you should consider applying to your benefits communications:

1. Communicate frequently. Some marketing campaigns are known as “drip” campaigns because they deliver key messages in a continual flow at regular intervals over a defined period of time. Take the same approach with your benefits programs. Yes, employees are inundated with communications from other sources, which is exactly why you need to fight for their attention. Determine the frequency you think will make an impression without becoming a nuisance. For some programs, this might be quarterly. For others, greater or lesser frequency will be appropriate. And remember, employees (like all of us) pay more attention to messages that impact us personally, so benefits communications have a built-in advantage over many competing communications.

2. Communicate in small bites. This is easier to do if you increase the frequency of your communications. Communicating everything at once—at annual enrollment, for example—can be overwhelming to employees. Educating them in small doses not only makes it easier for employees to understand and digest your messages but it also enables you to keep your messages simple, which reinforces the effectiveness of your communications.

3. Personalize communications as much as possible—and make benefits real. Employees need to appreciate and understand the value of the benefits you provide. To make the value crystal clear, give employees a personalized statement or summary showing the dollar value of each benefit as well as the value of their benefits package as a whole. Also show employees how their benefits compare against those of industry or regional competitors. Of course, there are technologies and tools to help you capture the value story, benchmark your benefits and add personalization to your communications.

But what if you don’t have the budget to invest in communications tools and technologies? What happens if your HR department, like so many others these days, is busier than ever? How can you implement some of these ideas and ramp up the volume and frequency of your benefits communication?

Some HR departments turn to benefits brokers for assistance, which can be a costly proposition. A far more cost-effective solution is to seek help from your benefits providers. No one is better positioned or qualified to assist you in educating your employees about their benefits.

Your providers should have experts on staff who can help you determine the best messages and methods for your communications. They should also be able to help you decide which channels will be the most effective for reaching the various segments of your employee population, how frequently to communicate and exactly when to communicate. For example, LifeCare has a dedicated team of Marketing experts committed to supporting tailored client communication plans year round.

If you’d like to learn more, contact us here or call us at 1-(866) 675-3751.