HR.com: The Missing Link: How Benefits Education Boosts Employee Retention
Strategies for year-round benefits education campaigns
In today’s economic environment, employee retention is critical to business success. According to Forbes, the average turnover rate across the U.S. during 2023 was 3.8%, with about two-thirds of those being employees who quit. Considering that losing an employee can cost up to two times the employee’s annual salary, it makes sense that employers go to great lengths to retain their people.
There’s good evidence that prioritizing benefits is an effective way to keep employees satisfied. A report from Optavise, a benefits solutions provider, found that about 67% of employees who changed jobs in 2023 said healthcare benefits were extremely important or very important for their decision to change employers. Many organizations understand that a competitive benefits package is necessary to attract and retain talent, but what many employers are missing is a robust education program to accompany their benefits packages.
Without educating employees about what benefits are available and which ones they'd be best suited to use, employees will not fully recognize and appreciate the benefits that they can access. Over time, this can lead to negative sentiment toward their employer, as if those benefits were never made available in the first place. Thus, it's vital that employers and their human resources (HR) teams focus on benefits education, both during open enrollment and throughout the year, to create effective benefits utilization and ensure employee satisfaction.
The Missing Link: Benefits Education
Improving healthcare and benefits literacy through education is more important than ever. Fewer consumers consider themselves confident that they understand how their plans work and only 54% of American workers report being content with their benefits. And that matters. Because confidence correlates with how satisfied employees are in their benefits—90% of those who said they are extremely confident in understanding their plan are extremely or very satisfied with their plan, compared to 13%-14% of those who are slightly or not at all confident, according to Optavise data.
Furthermore, most don’t even know where to turn for answers to questions about their benefits policy and how to maximize their coverage but clearly want to learn more. 41% of employees want to learn how to avoid surprise medical bills, while 33% indicated they wish to better understand how their deductible, copay/coinsurance and out-of-pocket maximum (OOPM) work and what it means for their wallet. Unfortunately, data shows that they’re turning to the wrong sources for information. According to Optavise data, 46% of employees rely on external sources such as friends, family, or coworkers for healthcare guidance, increasing the potential for misinformation. Only 27% received info from their human resources team, and only 15% were educated by benefits experts.
Taken together, these data points show that there’s significant work to be done in arming employees with the tools they need to make informed choices about their benefits.
Implementing Effective Benefits Education
While HR professionals play a pivotal role in facilitating year-round benefits education efforts, they can’t do it alone, especially considering the time and resources needed to properly research, plan, and implement a meaningful effort. As a result, employers are increasingly relying on their broker partners for help. According to Optavise, 93% of brokers report seeing moderate to high demand for help with benefits communications materials, showing that brokers are trusted experts on which HR teams can rely.
To build a better education plan, brokers should do a deep dive into which programs are being used—and which aren't— so they can identify high-cost claims areas, compile questions received over the previous year by HR, managers, and call centers, and spot enrollment trends. Further, by taking a close look at what went well and what didn’t during the last enrollment period, HR teams can be sure they are answering any lingering questions and filling in any gaps they may have missed with their strategy from years past. Leveraging data and employee feedback can point to what employees need to thrive and be engaged with their health, their healthcare, and even their jobs.
For employers, a year-round campaign to promote benefits literacy is the best way to guarantee awareness and proper use of employee benefits and thus increase employee satisfaction. When employees better understand their benefits offerings, they will feel more empowered to make informed (and often cost-saving) decisions for themselves and their families and feel supported by their employers.
When done well, businesses can guide informed healthcare choices and fortify the bond between employees and the organization, creating a lasting partnership grounded in mutual appreciation that will encourage employees to stay for many years to come.
Kim Buckey is the Vice President of Client Services at Optavise.