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Voluntary turnover is one of the biggest (and most expensive) challenges for most companies. According to Gallup, voluntary turnover costs employers about $1 trillion in a year — and in many cases, it’s a preventable problem. In addition to considering salary, job descriptions and responsibilities, and other factors, employers can often improve their employee retention numbers and attract the best talent in the field by paying closer attention to their benefits package.
Despite the obvious advantages of participating in benefits programs, many companies (up to 80%) report that their employees don’t open or read their benefits materials, and many of those who do read the materials still don’t understand the benefits. How can you make sure that your employees both understand and can utilize the benefits you’re providing to them?
Employees aren’t going to participate in benefits programs that don’t resonate with their needs and their lifestyles. That might seem like an obvious statement, but if the perks you’re offering cost your employees money to participate, and they also don’t provide a lot of perceived rewards, then making some adjustments to your benefits could improve your participation rates almost immediately.
How can you identify which benefits matter most to your employees? Ask them! You can send out surveys or assemble focus groups and put the question directly to your workers.
First, ask them which benefits you’re currently providing that they like and appreciate, and also which they don’t use (and why). Then, follow up by asking them if there were any particularly amazing benefits they had at previous jobs, or if they’ve heard of any at other organizations. Finally, ask them generally about where they’d like more support from you as an employer: health benefits? Financial wellness? Flexible schedules and time off? Education and career development?
When you’re thinking about adding a benefit or eliminating something from the package, make it a point to ask your employees how they’d feel about the change. An all-staff survey or asking managers to get one-on-one feedback from their direct reports can give you insight into future participation rates even before you implement the new benefit.
Starting a new job is overwhelming, and it’s also the time when most organizations ask fresh employees to learn all about their benefits. Wherever possible, try to eliminate paperwork and simplify enrollment into any benefits plans, so your brand-new employees don’t feel quite as inundated with information.
If there are enrollment deadlines for certain benefits, prioritize explaining those programs first, and make sure that the deadlines are clear. Signing up for health insurance and retirement plans should take a front seat to registering for open-ended benefits, such as a discounted gym membership or cell phone plan.
Create guides and resources that explain company benefits to employees and walk them through enrollment, and then distribute them in multiple forms: videos, company wiki pages, Slack/Teams channels, emails, employee handbooks, lunch-and-learn sessions, and any other formats that work for your company.
Even if your employees don’t know the ins and outs of all their benefits by heart, they should know exactly where to find that information when they need it because you’ve made it ubiquitous.
Onboarding and open enrollment are traditionally the best times to get your employees registered for benefits, but for any benefits that allow ongoing sign-up, you’ll want to consider ways to talk to your employees about those benefits.
One financial institution asks employees to self-evaluate their own well-being across several different categories, which creates an individualized action plan for the employee that includes resources available through work. This gives employees the chance to understand what support is available, and the employer gains regular insight into what programs are currently most valuable to its employees.
Educating your staff about benefits might also happen through workshops or seminars about those different benefit options, and those are a good way to share news about resources and how employees can use them. But don’t forget about the power of one-on-one advocacy.
Managers can be benefits advocates and remind their direct reports about specific programs when the topic emerges organically in conversation. And employees who are using your benefits and enjoy them can also talk about that experience with their peers, either in open discussions, messaging channels, or group emails.
These ongoing efforts can help support your entire benefits package. For example, hosting regular financial wellness workshops or seminars, or providing access to financial planning resources, can not only increase employee participation in benefits such as a workplace emergency savings account (ESA) or financial counseling services, but it can also increase participation in your 401(k) or health savings account (HSA) benefits when open enrollment comes back around.
What if your employees already know about the benefits available, but they’re simply not engaging for one reason or another? Offering rewards and incentives for enrolling in a benefits program and for ongoing involvement can be a great way for employers to improve participation rates for all of their benefits.
One obvious incentive that many employers and employees are already familiar with is matching contributions to retirement savings. Some employers offer to match a certain percentage or amount of retirement savings, which can significantly increase (and sometimes even double) the amount of money that an employee would be able to save on their own.
Another way employers can incentivize participation in their benefits plans might involve providing discounts for services that employees already use, such as reduced-price or subsidized gym memberships.
For a benefit like a workplace ESA, employers could offer several layers of incentives to encourage employees to sign up and participate:
After you’ve evaluated your benefits offerings, educated your workers about what’s available to them, and incentivized participation, how do you close the loop and determine what’s working and what could be improved?
It’s critical for human resources professionals and other benefits providers to try to measure success, iterate on what’s working well, and evaluate and change what’s not. For every benefit offered, you should be able to track the current participation rates, how employees are using the benefit, their satisfaction with it, and how effective the program is.
For example, some gym membership rebate programs (like IncentFit) can link to a wearable device and track how frequently employees are working out, which helps you as the employer understand how valuable they are finding the benefit. Another example could be a workplace ESA, which should help you monitor participation rates, and you should also be able to get insight into data such as how much money your employees are saving in those emergency accounts, how quickly they are hitting dollar-amount incentive milestones that you’ve set, and how frequently they need to access funds in those accounts for emergencies.
Set aside time regularly to evaluate how effective your benefits program is. Ask outgoing employees about their perception of your benefits package in exit interviews, conduct feedback surveys, and review any data and insight you’re collecting about your benefits on at least a quarterly basis. Then you can make well-informed decisions about what to keep, what to eliminate, and where to invest your benefits resources moving forward.
Benefits should be a critical part of your hiring and retention efforts: More than half of workers (62.3%) said they would accept a lower salary in exchange for better workplace benefits. Employees who enroll and actively participate in benefits programs could be more likely to feel satisfied with their current jobs.
In some cases, employees might be actively undermining their own compensation by declining to participate in certain benefits programs. If the company is matching savings contributions or providing cash incentives for meeting certain milestones, or paying for a fitness plan or gym membership, then deciding not to participate in all benefits offered can actually cost the employee money.
Improving participation in your benefits is one of the best ways to increase job satisfaction, retain your existing top employees, and create a productive culture at your company. If you can put together a benefits communications strategy that involves clearly and regularly explaining the available benefits to your workers, you’ll be well on your way to generating higher participation rates and reaping all of the rewards that come with it.