An employee receives his or her paycheck at the end of the month, and scans over their gross and net pay as well as the deductions listed. What many employees may not realize is that their employers are spending an average of 31 percent over and above their gross pay on employee benefits. Do your employees understand how their benefits add to their overall compensation and are they fully taking advantage of benefits that your company provides?
According to a survey conducted by the Society for Human Resources Management (SHRM), 60 percent of employees are unsatisfied with their current benefits plans. This survey also found that 18 percent are unhappy with how benefits are managed and 17 percent are upset about how the benefits are communicated.
This creates problems on both sides of the table. Employers are allocating extra financial resources for an employee to have benefits with the intention of promoting engagement and retention. When employees don’t need, or even want, some of those benefits being offered, employer resources are being wasted and employees are left feeling unhappy about their benefit choices.
Employees who are unhappy about their benefits plans, struggle to remain engaged in the workplace. If patterns of disengagement continue then an employee could end their relationship with a company to find an employer who will provide benefit plans more in line with their wants and needs.
Competitive benefits spending needs to foster company growth by helping retain and attract top talent in the industry. At the same time, businesses need to avoid wasting resources on unused benefits and perks.
Communication Through Technology
For some employees, dissatisfaction with benefits plans may be rooted in miscommunication. The solution for boosting employee engagement and utilizing company resources could be as simple as finding a better way to communicate benefit plans and giving them the tools they need to understand their benefits and make informed decisions about what they want and need.
This miscommunication comes from outdated technology and/or little personal interaction. A trend occurring in benefits administration is the use of cloud-based technology. Employers that are shifting their current HR solutions to newer ones are finding that employees are becoming more engaged with their benefits.
Another root cause for employees’ unhappiness is HR solutions that restrict an employer’s options for providing benefits. Some solutions are unable to bend to meet a company’s unique goals and culture. Some employers choose to compromise and allow their entire benefits administration to be controlled by a third party.
However, not every employee is the same and likewise, not every company is the same. Businesses that want to be competitive in the marketplace need to be agile in how they approach benefits. Constant changes in the workplace, company growth, and diverse employee wants and needs, make solutions that offer set benefits packages less effective.
When HR and finance are aligned, both departments bring valuable insight into what a company and its employees want and need. Finance can help detect unnecessary expenditures on benefits administration and HR can bring insight into the benefits and perks that employees want.
When HR and finance use data to align for benefits administration:
- Employee engagement increases
- Company resources are saved
- Better hires are made
- Retention rate increases
- Businesses scale efficiently
Before this can occur, HR and finance need to use data as a guide. SHRM reports that employers who use data analytics have a 14 percent higher employee engagement rate than employers who don’t or minimally use data. Businesses need to have access to an HR solution that can provide the data needed to inform HR and finance of the current state of their employee benefits plan. They also need a solution that can adapt to their unique company culture and goals, while utilizing technology to inform employees about benefits provided.
About the AuthorMore Content by Andrew Larsen