Benefits: Adult Education

By helping employees make the most of the benefits companies offer, employers help themselves as well.

If you want to offer employees an inexpensive benefit that will foster loyalty and boost productivity, consider a navigation system. No, not a GPS, but a tool that will guide them in making a host of decisions about everything from tuition-reimbursement programs to 401(k) strategies to consumer-directed health plans. By offering more and better education around benefits, companies not only help employees make the most of their perquisites, but also gain from increased retention, higher productivity, and related forms of goodwill.

“Benefits are probably the largest untapped potential retention tool that organizations have,” says Steve Miranda, chief of human resources at the Society for Human Resource Management in Alexandria, Virginia. But all too often, he says, “they turn into nonperforming assets because they aren’t being used to create ‘stickiness.’” In other words, to tap the full benefit of benefits, companies should package them with more-useful instructions. “People are clamoring for more communication,” says Miranda.

This won’t come as news to most companies, of course. Ever since 401(k) plans began to replace traditional pension plans more than 25 years ago, companies have found themselves in the uncomfortable role of trying to educate workers about how (and how much) to save for their retirements. Entire industries have grown up around this single mission, yet few companies would say they handle this task well. Some pass out brochures touting the wonders of compounding and expect employees to take it from there. Most, however, err in the opposite direction. “More and more, we find that companies back up a truckload of information and everyone’s eyes immediately glaze over,” says Nenette Kress, senior vice president and national practice leader for communications at The Segal Co., an HR consultancy. “There’s so much information that they can’t take it in. They are overwhelmed.”

Inertia is a problem even under the best of circumstances; information overload only makes it worse. And if maximizing their participation in 401(k) plans seems daunting, imagine what may be at stake in the emerging realm of consumer-directed health plans. CDHPs offer lower premiums but higher deductibles and require employees to make a series of critical decisions about their own health care. HMO or PPO? Brand-name pharmaceuticals or generics? Does an aching back merit a doctor’s visit, or a hot bath? “Benefits now require employees to make very important decisions that are fraught with long-term implications,” says Kress. “They need help understanding it all.” With so much at stake, the self-service approach to benefits, which has dominated for a decade, is now giving way to a desire on the part of companies to extend a helping hand.

Retention Junkies

Why should employers — most of whom have shaken free from any previous pretensions of paternalism — take on the extra tutoring duties? Simple: because both current and potential workers put a premium on their benefits packages. Last year the Emerging Workforce Study, a survey commissioned by recruiting giant Spherion Corp. and conducted by Harris Interactive, found that benefits actually outranked compensation as the key factor in employees staying put. Out of 3,152 employees, 78 percent named benefits (including health care) as a critical retention tool, slightly ahead of compensation (cited by 75 percent). Moreover, workers see plenty of room for improvement in their plans; only 34 percent expressed satisfaction with their health benefits.

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