For Many Employees, Benefits Matter as Much as (or More Than) Salary

For today’s workers (and job seekers), the bottom line extends beyond the total on their paycheck.

In fact, almost three-quarters of American workers say benefits matter as much as — or more than — their pay, according to the results of the inaugural Employee Benefits Survey, released this fall by benefits administration platform Selerix. The study also found nearly 4 in 10 surveyed workers have declined a job offer because the benefits package missed the mark.

Similarly, from a retention standpoint, 63% of U.S. workers surveyed for Workhuman’s Human Workplace Index shared that they would leave their current position for a job opportunity extending better benefits but the same pay — or even a lower salary. (Workhuman is an employee recognition and rewards platform.)

With benefits playing a key role in employee satisfaction and retention, employers should be aware that there’s work to do when it comes to better communicating benefits to their workers and making sure they’re engaging with them. Only 27% of polled workers for the Selerix study said they “perfectly” understand their benefits options — while 35% have regretted a benefits selection.

“That’s like building a beautiful home but skipping the walk-through,” said Selerix chief executive officer Tim Pratte. “Employees have the right tools but not the confidence to use them.”

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Why Are Employees Disengaged with Their Benefits?

The problem isn’t always — or even usually — poor benefit offerings, asserted Katy Johnson, the president of the American Benefits Council, a nonprofit organization that advocates on employee benefits matters.

Johnson often hears that employees are, in fact, engaged and focused on their benefits, but pointed to an influx of benefit innovations and offerings in recent years, which enhance the employee experience when utilized effectively but can be confusing or overwhelming when employees don’t know about or understand them.

“We sometimes hear about employers providing a full array of benefits, and then when they dig into the utilization data, they can see a specific benefit they rolled out to address an issue they believe their workforce is struggling with is just not being utilized,” Johnson said. “The biggest consequence of that is the employees aren’t getting the intended benefit.”

Pratte reiterated the challenge of complexity when it comes to employee engagement with benefits, citing confusion from plan terms, coverage tiers and a jumble of acronyms, as well as the fact that 7 in 10 workers spend less than an hour making benefits decisions — often alone and from home.

“That’s not decision-making,” he said. “It’s guesswork under pressure. The system assumes understanding instead of building it.”

Facing a limited benefits selection can make workers feel as though their individual needs — based on life stage, health and financial status — are not being met, said Kathleen Schulz, the organizational well-being and global innovation leader at consulting firm Gallagher. But having too many options can become overwhelming and frustrating.

It often comes down to a lack of effective communication about benefits offerings. Dissatisfaction with benefits — even a comprehensive package that was thoughtfully crafted — can lead to disengagement, mistrust and turnover, particularly in a competitive labor market, Pratte said.

Three Ways to Make Progress

Offering great benefits is just the start. The experts interviewed for this article offered the following tips to help employers ensure their employees are understanding, utilizing, benefiting from — and appreciating — their benefits.

1. Look at the Data

Examine utilization data for the benefits you offer, particularly high-value programs implemented due to an observed or stated need among the workforce, such as mental health solutions, family-building benefits, or programs to support workers during emergencies or in times of need, Johnson said. If utilization is low, examine why. Are workers truly not needing or wanting certain benefits? Or, do they not know about them or understand how to use them?

Use employee data to better understand generational and gender breakdowns, life stages, financial status and the impacts of social determinants on health, Schulz said. Benefits preference surveys and insights from focus groups or employee resource groups (ERGs) also can be helpful.

“Leveraging data to deeply understand the workforce can ensure benefits will be relevant and valued by the workforce and allow for a more personalized approach to benefits and well-being,” Schulz said.

2. Communicate Year-Round

Don’t just send out benefits information during open enrollment or when an employee is hired, Pratte said. Instead, he advised, share information early, and continue to share it throughout the year in simple, bite-sized, personal ways.

Johnson added, “Maybe when somebody is hired, they hear about the panoply of benefits. But then when someone gets pregnant, has a death in the family or has a family member who is sick — at that point, how do employers ensure the information that’s most relevant to that employee at that time is available to them? Employees are much more inclined to dig in and understand the benefit when they need it most.”

3. Personalize Benefits — and Benefits Communication

Selerix’s research found that workers who believe their benefits offerings are tailored to them are three times more likely to be satisfied and confident. To enable that, Pratte said, offer personalized benefits tailored to your workforce’s demographics, life stages and situations.

Adding or expanding voluntary benefits offerings also allows employers to provide personalized and relevant benefits in a cost-effective way, Schulz said.

Personalization also means offering tailored communication. Employers have spent years trying to determine how best to communicate benefits information to workers, Johnson said — and now, the most successful ones are utilizing multiple modes of communication. That may mean walking around a factory floor speaking directly with employees, setting up a table in the lunchroom to provide information about open enrollment, mailing out postcards about benefits offerings, offering in-person open-enrollment sessions, producing webinars and sending out companywide texts.

“In today’s information age, where there’s so much coming at everyone all the time, trying to make sure benefits information breaks through is always a focus for employers,” Johnson said. “Using all the different modes of communication that are possible at once is the best way to make sure you’re reaching the full workforce.”

Offering manager training to ensure employees can get their questions answered, and utilizing technology tools to take some of the load off HR and their total rewards professionals, are also key steps, Schulz said.

Improving the benefits experience increases the likelihood that workers are happy with where they are — and that’s a win for employers.

“In today’s market, benefits aren’t just part of the offer; they are the offer,” Pratte said. “Benefits are no longer a side conversation in recruiting or retention. They are a make-or-break factor in the employee deal.”

Editor’s Note: Additional Content

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