Communicating the Value of Employee Benefits

In today’s candidate-driven labor market, it is essential for employers to communicate the total value of the employee benefits program that their organization offers – not just the salary being provided. Employee benefits packages can bring tremendous additional financial value to employees; however, that value can only be understood if it is clearly communicated to employees. Each year, employers contribute over $1 trillion into their employee benefits and health plans, making healthcare expenses the second highest line item behind payroll on an organization's balance sheet. Let’s take a deeper dive into the full value of employee benefits and how your program can make a significant impact on total employee compensation.

The Impact on Total Compensation

Salaries are not the only thing turning employee heads in the job market. In fact, nearly one-in-five workers would accept a lower wage in exchange for more comprehensive health-care benefits, according to the Employee Benefits Research Institute. Benefits such as flexible scheduling and enhanced PTO packages are gaining much traction as emerging employee populations shift their values towards work-life balance. Wellness programs including mental health support, family planning and parental leave benefits are also becoming a large topic of conversation for many candidates looking for employment today.

In order to effectively communicate the value that an employee benefits package provides an employee in addition to their salaries, many organizations are providing what is called a total rewards statement or a total compensation statement. In fact, a recent Mployer report highlighted that only 70% of total employee total compensation comes from their salary, while the remaining 30% is comprised of the additional benefits and perks that are provided.

Attracting and Retaining Talent

According to a recent article from the American Psychological Association, more than half of workers are actively looking for another job or watching for openings. Organizations must think about what their ideal candidates, and current employee are looking for in an employer and learn how they can promote their benefits offerings to meet those needs. It is also important to think about where those candidates may be searching for such information, such as job posting boards such as LinkedIn and Glassdoor to ensure they’re getting their messaging out in the proper channels.

Promoting the engagement and positive word of mouth from an organization’s current employees about their experience with the benefits package can be a great way to increase overall education and morale within an organization. Gallup’s report on employee engagement shows that companies with a highly engaged workforce have 21% higher profitability. They also have 17% higher productivity than companies with a disengaged workforce. There is no question that employees are more willing to engage and learn from their peers rather than a top-down approach. Leveraging some of the success stories that current employees provide can be a great way to promote the overarching goal of promoting employee well-being and success.

Niche and voluntary benefits such as fertility treatment support, paid parental leave and student-debt repayment assistance can be of significant value, and can assist in differentiating one employer’s benefits program from another competitor. These benefit offerings can round out a program for those generations who may be looking for options outside of traditional health insurance offerings and help build loyalty to the organization.

Some employers are also exploring opportunities to build long-term financial incentives into their benefits packages in order to help retain employees and reduce turnover. Using time-based incentive structures encourages employees to remain at their employer for longer periods of time, ultimately leading to a reduction in recruitment and training costs down the line.

Communication is Key

Your organization’s employee benefits package may be comprehensive, innovative, and competitive; however, it won’t translate into results unless you’re properly communicating its value. Providing year-round communications around your benefits package is an essential component to its success. Successful benefits communications plans include the following key characteristics:

• Clear and concise messaging
• Consistent reminders
• Timely notices of changes
• Digestible details for more complex offerings

Ensuring that detailed information is easily accessible and broken down into more comprehensible pieces will help promote greater understanding and utilization of benefits throughout the organization. Providing help centers, FAQ documents and other like-resources can make the process of using their benefits less complex for employees. Externally, it is important to communicate transparently to future employee prospects, that the organization takes pride in their employee benefits offerings. PeopleKeep's 2024 Employee Benefits Survey found that 81% of respondents indicated an employer’s benefits package is an important factor in whether or not they accept a job. For some organizations, this may look like providing a summary of benefits or employee resource guide to candidates throughout an interview process.

As your organization competes for candidates and future leaders in today’s competitive labor market, the effectiveness of your employee benefits communications strategy can be a key element to ensuring the value of your benefits package is recognized – potentially positioning your organization as an employer of choice in the marketplace. For additional support on how your organization can promote the value of its benefits package, reach out to your AssuredPartners team.