Each day, people make decisions, but all decisions aren’t created equal.
For example, buying a new car has more downstream impacts for most people than deciding what shirt to wear to work (unless you happen to be a stunt person and only some of your shirts are fire-resistant. Picking the wrong one could have very serious unintended consequences.)
Fire-resistance aside, even the most routine decisions require some level of judgement. Choosing between one or more different options requires knowledge and context. You can also throw in preference. (This detergent is better at getting out grass stains from my son’s baseball pants. Their latte tastes better. I’ve worn black three days in a row.)
But, what if you didn’t have any knowledge or context, or your knowledge was spotty? Would you be able to make a good decision?
Sometimes yes; sometimes no.
When the stakes are relatively low, knowledge or comprehension isn’t terribly important. Choose the wrong detergent and you can set things right at your next trip to the store. Best-case scenario, you’re out a couple of bucks; worst-case is set-in grass stains.
However, when it comes to benefits choices, making decisions without some solid knowledge exposes employees—and their employers—to potentially serious adverse impacts.
Poor benefits literacy is pervasive, and it can undermine employees’ ability to make the types of decisions that enable them to use benefits as intended—as a way to protect themselves from risk and help them meet personal and financial goals. Once they make their enrollment decisions, only a small minority of employees feel like they’re actually using their benefits optimally.
The first step in addressing benefits illiteracy is understanding the extent of the issue. By analyzing real-time employee responses to questions in our decision support tool, our MyChoicesm Recommendation Engine Benefits Insights Report offers a comprehensive look at the top issues surrounding employees’ benefits decision-making, including lack of knowledge and confusion.
Based on the report, we drilled down to who is confused by their benefits and the degree of that confusion in this handy infographic. It provides information on the demographics associated with lack of benefits knowledge and can help employers understand both the extent of the problem and where to focus educational and communication efforts.
Benefits protect employees from exposure to risk, but lack of knowledge is keeping them from making decisions that result in options best fit for them. An appropriate level of benefits literacy helps employees enjoy peace of mind without breaking the bank—either theirs or yours.