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Choosing in which benefits to enroll is a significant decision as an employee, yet many aren’t well versed enough to make the right choices.
This is according to a report by Businessolver, which found that 80% of the half-million employees surveyed are not knowledgeable about their benefits packages. The “MyChoice Recommendation Engine Benefits Insights Report” also found that 30% of the respondents are outright confused by benefits.
“Employers are spending about a third of all compensation dollars on employee benefits, and these benefits are increasingly important as an asset for recruitment and retention in today's labor market,” said Rae Shanahan, Businessolver's chief strategy officer. “As these benefits packages become more complex to meet the needs of an increasingly diverse, multi-generational workforce, employers need to understand how their employees are making choices and take steps to help them navigate decision-making to maximize their benefits investments.”
Benefits Literacy in Crisis
Only 19% of respondents described themselves as “a pro” when it comes to benefits. This level of confusion was relatively evenly distributed across age groups, with a quarter of Baby Boomers, a third of Gen Xers, and 35% of Millennials responding they're confused. The data also reveals that most employees are risk averse, with 65% describing themselves as low-risk takers.
As a result, HR professionals must reevaluate how they're communicating benefits information to employees, what they are communicating and how often, to help address the ongoing crisis in benefits literacy, according to the BusinessSolver release. By offering personalized guidance around very complex decisions, HR can empower their employees to make benefits choices based on knowledge, not emotion. This in turn leads to better awareness of and engagement with their entire compensation package.
Financial Well-Being Is a Key Component of Benefits
The MyChoice Recommendation Engine Benefits Insights Report also highlights how employers must take steps to support employees' overall financial well-being along with their physical and mental health. According to the data, 50% of respondents would “feel panicked” by a typical emergency room bill. Notably, even those higher on the earnings scale agree with this sentiment — 26% of employees earning $100,000 or more a year said they would panic.
Financial issues are common to all demographics, but employees at different ages face different challenges. For example, 63% of Millennials are most concerned about their monthly budget, and 56% of Gen Xers agree. Baby Boomers, on the other hand, are more worried about a large, unexpected cost (53%). This data suggest that employers should offer varied financial well-being benefits so that employees at different life stages have access to the help they need.