Why HR Leaders Should Educate Employees To Boost Confidence in Benefits
Both employers and employees believe benefits play a crucial role in talent retention. However, there are disparities in the realities employees face and what HR leaders perceive. Nayya conducted a survey to understand what employers should do when developing employee benefits strategies.
For almost a year, the mass exodus of employees, also termed the Great Resignation, has forced organizations to rethink their employee attraction and retention strategies. Compensation and benefits play a critical role in these employee retention strategies. According to studies, both HR leaders and employees agree that financial benefits are a priority.
However, a disparity exists between employee realities and HR’s perception of the benefits. Nayya recently conducted a survey to understand what employers should do in this regard as they develop their retention strategies. A key finding was that HR leaders must focus on bringing benefits confidence and education to the forefront while developing their 2023 goals and strategies.
The following are the insights in detail.
See more: Only Two-Third Workers Understand Employee Benefits They Enrolled for: Voya Survey
Employee Realities Impact Their Plans Around Savings and Benefits
Employees face several realities that affect their plans around their benefits. For example, inflation and medical events affected employees’ plans to a great extent last year. About 59% of employees did not meet their financial goals in 2021. About 40% of employees faced an unplanned medical event in addition to inflation, making them miss their savings goals. Additionally, there is a severe lack of understanding among employees regarding the selection and application of those benefits. About 47% of employees take two or more hours to choose their benefits during enrollment.
Employees Are Not Confident When Selecting Benefits Without Decision Tools
The study found that about 63% are not confident when selecting benefits without a tool to support their decisions. Only 14% said they were confident about the benefits. When this is broken down by generation, about 20% of boomers, 14% of Gen X, and 10% of Millennials were confident. But none of the Gen Z employees were confident. This may show that confidence grows with age, but not by much. Moreover, about 62% of parents or employees with dependents were unconfident when choosing benefits. Lack of confidence in selecting benefits also increased in companies with more than 15,000 employees.
The most common method of benefits education from the HR during open enrollment was in the written form outlining the plans. About 62% also said that the most common method of finding in-network care was visiting an insurance carrier’s website or app.
Employees Feel Their HDHP Plans Fall Short of Expectations
About 68% of employees felt that their benefits had fallen short of their expectations. Further, 73% of employees with high deductible health plans (HDHPs) felt their benefits had fallen short. About 60% migrated to an HDHP within the last 2-3 years.
About 65% of respondents experienced an unplanned medical emergency or event. As such, 63% faced significant medical expenses or debt. And 65% of respondents felt unconfident when choosing their benefits.
HR Leaders Think Employees Understand Benefits
A significant disparity exists between what HR leaders think and what employee realities are regarding the confidence in benefits selection. For example, about 39% of HR leaders felt confident, and 43% felt moderately confident that employees understand the benefits. Only about 18% felt unconfident. This is in stark contrast to the percentage of employees that felt confident.
It was further found that HR leaders in Fortune 1000 companies had higher levels of perceived confidence. About 46% of HR professionals in Fortune 1000 companies felt confident, while 37% in non-Fortune 1000 companies felt that way. When it came to the confidence in them being able to support employee benefit decisions, about 72% felt confident.
HR Leaders Face Challenges While Offering Benefits
While most HR leaders are confident, many also face challenges when offering benefits and during open enrollments. Some of the top challenges include:
- Driving employee engagement and communication
- Reminding employees to submit elections
- Voluntary benefits awareness and utilization
- In/out of network care steerage
- Ensuring employee participation, and
- Training and Education
Less Than Half of HR Leaders Offer New Benefits
About 67% of HR leaders felt that benefits extremely impacted retention, while 22% thought it had a moderate impact. Only 13% thought it had little effect. On the other hand, about 90% of employees felt that benefits matter when deciding whether to stay or quit a job. In fact, when four factors — culture, compensation, benefits, and remote/hybrid environment — were compared, benefits emerged as the second most important factor after compensation, which employees evaluated to stay in a job or quit.
While more than two-thirds of HR leaders realize that benefits play a crucial role in employee attraction and retention, only about 37% were offering new benefits in 2022. Of these companies, about 67% offered mental health and emotional wellbeing benefits, while 26% offered wellness reimbursement. About 15% revised their parental benefits.
What new benefits HR leaders are offering this year
Source: 2022 HR and Benefits Leadership Trends
HR Leaders Investing in Employee Education Feel More Confident
The study found that the more time HR leaders invested in educating and answering the employees, the more they felt confident in employees understanding the benefits. For example, 28% of HR leaders said they spent 0-20% of their time providing benefits-related education and answering questions during open enrollment. About 26% spent 20-40% of their time doing the same. Only about 27-30% invested more than 60% of their time educating and answering questions related to benefits during open enrollment.
See more: Interested in a Stress-Free Open Enrollment This Year? Here are 4 Tips
What HR Leaders Should Do
It can be seen that there are several employee realities, such as inflation, unseen medical expenses, and a lack of understanding of the benefits offered that affect their confidence in selecting employee benefits during open enrollments. However, HR leaders and businesses are not much conscious of these realities. As such, there is a gap between what employees need and what HR leaders perceive and offer.
There is a need to bridge this gap. HR leaders must understand employee needs and tailor their benefits to these requirements. Data analytics can go a long way in improving employee benefits. Companies should also provide the necessary education, confidence, and decision support tools around benefits to ensure employees can maximize their utilization when needed. This improves employee experience and retention.
What steps have you taken to boost employee confidence and uptake of their benefits? Share with us on Facebook, Twitter, and LinkedIn.
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