What’s the ROI on Benefits Communication?

85% of employees are confused by their benefits, but effective communication strategies can help steer employees in the right direction.

Robust employee benefits options can be both a blessing and a curse for HR teams. On one hand, a diverse benefits package means meeting your employees’ diverse needs with quality choices. On the other hand, these same employees often struggle to fully understand the benefits available to them, leading to confusion, stress, and poor utilization or participation.  

According to our 2023 Benefits Insights Report, nearly 85% of employees reported that they were confused about their benefits. Although this number may seem high, benefits literacy among employees has been declining steadily over the last five years, with confusion rising two-points since 2022.  

While the initial reaction to these numbers might be to question how to get employees to fully understand their benefits, the hard reality of the situation is that employees are never truly going to understand their benefits. And they shouldn’t really have to.  

With the benefits landscape constantly evolving, and growing more complex every year, HR admin professionals are often finding it next to impossible to manage the burden of all their to-dos, let alone get employees to better understand or activate on their benefits.  

Despite this growing disconnect, the good news is that year-round benefits communications and personalization in the benefits experience can help HR teams achieve better results while creating a more engaging and supportive experience for employees.  

What challenges are employees facing when it comes to activating and understanding their benefits?

One of the biggest benefits challenges that HR professionals face in today’s ever-changing benefits landscape is how to maintain employee engagement with their benefits year-round and ensure that they have access to the right benefits when they need them. With employer healthcare costs expected to rise 6% to 10% year over year, there’s a lot more at stake for employers than simply increasing benefits literacy.  

A closer look at our Benefits Insights Report revealed several challenges that employees commonly face when it comes to understanding and optimizing their benefits. One of the largest being a lack of understanding of the value of their benefits available. This is particularly true for younger employees, such as Gen Z workers, who may not yet fully grasp the benefits of paying out of pocket or investing in long-term plans.  

In addition to seeing the value of the benefits available to them, another challenge that many employees struggle with is the complexity of benefits jargon that may inhibit them from making the best selection for their needs. While these challenges are certainly a source of frustration for HR professionals, the good news is that it’s possible for employers to help employees make smarter benefits decisions with the right technology and effective communication in place.  

Decision support tools, for instance, can help steer employees to the best plan options for their situations, increasing participation. For example, out of the 46% of Businessolver clients that offered an HSA, only 23% of employees enrolled without the use of decision support tools, versus with this tool nearly 35% of employees enrolled.  

But it’s not enough just to have decision support tools in place. While decision support tools can make a big difference in helping guide employees to make the right benefits decisions, getting them to activate on those benefits starts with effective, personalized communication year-round from employers.  

What does a good communications plan look like?

With nearly 70% of employees opting into targeted benefits communications when given the opportunity, it’s clear that employees are craving more support from their employers to help them activate on their benefits. But what does effective communication look like?  

Look at these four tactics to incorporate into your strategy.  

1. Understand your employees: Gain valuable insights about your employees by utilizing your annual enrollment data to identify distinct groups based on generational differences, plan types, biometrics, life stage, and other relevant characteristics. 
2. Be relevant: Relevancy is key – tailor your messages to match the needs and preferences of your audience. Remember to be selective; bombarding a 23-year-old employee with a reminder about HSA catchup contributions will only lead to them ignoring you. 
3. Communicate year-round: Communicate regularly with employees, not just during benefits decisions, by providing information throughout the year when they are actively using their benefits. This approach fosters better engagement and encourages employees to become more informed and engaged consumers. 
4. Use preferred communication channels: Discover how each employee likes to be reached by using your benefits administration solution – send informative web-based materials to those who request it, connect via text messaging with those who prefer it, and deliver expensive printed materials exclusively to those who ask for them. 

While these tactics are only the tip of the iceberg when it comes to effective communication with your employees, the key to finding success is with the right technology in place for making personalized communication at scale possible.  

Want to dive deeper into the data we covered in this blog? Check out our 2023 Benefits Insights Report today.