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Are Your Employee Benefits "Sleeping" or "Exercising" on the Job?

It is estimated that 5-10 percent of employers directly communicate with their employees about the treasure chest of benefits they provide each year in addition to employee salaries or hourly wages.? This is an astounding figure when you learn, on average, an employer spends about 41 cents on benefits for every dollar they spend on payroll.? Research shows that employees barely understand the costs associated with the benefits they receive.? Although they may often appear ungrateful about their benefits, the truth is, most don't understand what it costs the employer to provide them. Employers should bear the brunt of criticism for employees being in the dark and having negative attitudes towards benefits, as they have neglected to educate employees about the serious business investment they make in providing benefits.? These attitudes are enough to make you scream because this is such a good news story that should be shared with every employee whenever possible.

So, what is an employer to do? One of the best practices every employer should strive to achieve is making sure your employees understand the value of every dollar you spend on benefits. This can be done through several ways but my favorite is an annual Total Compensation and Benefit Statement that places a dollar value on every benefit employees receive.? These statements need not be complicated.? They can be put together by the HR and Payroll functions where most of the data resides.? If staff levels are small, or the task is perceived as too overwhelming for in-house production, there are several reliable companies that specialize in creating benefit statements.

Benefit statements should provide employers an opportunity to distinguish their organization from other employers.? This is accomplished by:

1.?Communicating the culture and values of the organization. Tell your story by explaining the benefits you value and fund; educate, motivate, and create a recruiting/retention blueprint for the future.
2.?Branding your organization.? Take the opportunity to tell your employees what a great place you are to work; explain why you are unique from competitors; create a clear brand as to why you are the employer of choice in your geographic area or niche.
3.?Highlighting benefits that make you different as an employer.? This can include health and wellness programs; childcare initiatives; job-sharing opportunities; career development; and work-life initiatives.

The format of benefit statements can take on several shapes and approaches. Most benefit statements include the following information, but the list is not meant to be all-inclusive:

1.?Personal Information

  • Employee Identification Number
  • Date of Birth
  • Date of Hire
  • Annualized Pay

2.?Retirement Benefits

  • Pretax 401K Savings Plan Contributions
  • Defined Benefit Pension Plan Contributions

3.?Life Insurance and AD&D
4.?Disability Insurance

  • Short-Term Salary Continuance
  • Long-Term Salary Continuance

5.?Medical Insurance
6.?Dental Insurance
7.?Vision Insurance
8.?Flexible Spending Accounts
9.?Annual Leave (PTO, Holidays, Bereavement, Sick, Personal)
10.?Social Security/Medicare
11.?Voluntary Insurance (AFLAC, etc.)
12.?Workers' Compensation
13.?Unemployment Compensation Insurance
14.?Wellness/Healthy Lifestyles Programs
15.?Tuition Reimbursement

Once you have identified the preferred format for benefit statements, give serious thought to the timing for distribution.? Some employers prefer distributing statements at year-end; some during the annual performance review cycle; and others during the compensation review cycle.? Regardless, select a process that complements your other employee communication strategies.

Last but not least, if you find employees are unhappy with your current benefit menu, consider conducting a benefit survey to identify what they value.? A benefit survey will: (a) shed light on how they would force-rank current benefits; (b) identify what benefits they would prefer to add or drop; and (c) identify what benefits they are willing to pay more or less for.? Benefit surveys are easy to prepare and administer.? They provide an excellent insight into the total reward equation employees have calculated for your business.? They will also tell you whether your employee benefit programs are "sleeping" on the job or "exercising" vigorously when it comes to spreading the good news about your benefit programs.

Progressive Benefit Solutions has extensive experience in assisting our clients with Benefit Statements and Benefit Surveys.? If we can assist you with developing tools to assess your employee benefit value climate, please contact Rusty Bramlage at 919-602-6555 or rbramlage@probenefitsolutions.com.Posted December 29, 2012

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