Survey: Employees Lack Understanding of Their Benefit Plans

Posted on December 15, 2011

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A new survey put out by payroll processor ADP finds that HR professionals believe that 40% of employees do not fully understand their employer’s benefit plans. At the same time, the survey found that 80% of HR professionals feel that it is very important that employees understand their workplace benefits.

So, obviously, these HR pros are spending lots of resources on employee benefit communications, right?

Well, for the most part, that is not the case. According to the survey . . .

  • 36% of large employers and 66% of midsized firms do not have budgets dedicated to benefit communications
  • Of those HR professionals who are lucky enough to work for organizations that do have dedicated benefit communications budgets, roughly half responded that their budgets have not increased over the past year. Overall, respondents believed that their communications budgets would remain stagnant over the next couple of years.

To be sure, ADP’s findings are both interesting and a bit disappointing. One would think that employers would “get it” when it comes to understanding the importance of employee communications in general and benefits communications in particular. As I note often when speaking with both current and potential clients, compensation and benefits are effective as tools for employee engagement, retention, etc only to the degree that they are understood and appreciated. Total compensation statements are certainly one effective means by which to educate employees and increase appreciation, but there are other means as well, as this article points out. The key lesson for employers is that, without appropriate communications, it’s likely that benefits will go underused and underappreciated, ultimately resulting in companies not achieving the ROI they might otherwise realize from the investment in compensation and benefits.