3 Actionable Ways to Get a Better Return on Investment (ROI) on Your Benefits Program

Mind the Value Perception Gap in Benefits

Employees want a better experience when it comes to benefits, while employers feel they have done enough. How can leaders address the disconnect in value perceptions?

Ask any employer, and they will say they have strived to provide employees with an exceptional benefits experience focused on their emotional, financial and physical wellbeing. Ask their employees, and chances are they will say there's room for improvement.

There is a value perception gap in workplace benefits, a disheartening development for employers who have had to grapple with soaring healthcare and employee benefits costs. Most employers have also invested heavily to ensure their benefits programs are competitive. They run benchmarking exercises to compare their organization's benefits packages against those of their peers, conduct employee surveys to solicit feedback, and are quick to introduce high-demand perks like remote work, mental health support and more to stay current. Why aren't these efforts working?

Instead of trying to mirror competitors’ benefits packages or adhering to traditional approaches, employers must build a compelling benefits program based on a robust and empathetic understanding of what their employees need, want and value. Employers must also do more in terms of benefits-value communications and education, as employees don't always realize the value of their benefits. Another way to improve the perceived value of healthcare benefits is to make sure employees have access to the benefits they most value and need, given their life stage and career journeys.

Below are three actionable strategies to bridge the gap in benefits perception:

Win Over Their Hearts and Minds

Employers must acquire an empathetic understanding of what matters most to their employees when it comes to their health, success, and financial security. Do employees worry about future medical costs? Are they forgoing medical treatment because of cost? What about retirement savings? Are they saving enough, or are they falling behind on debt payments?

Understanding employees at this intimate level can support an employer’s ability to offer benefits packages that truly matter and provide material assistance to their employees. For example, in a recent OneDigital Employee Value Perception Study (OneDigital Study), researchers discovered a large percentage of executive-level employees struggling with their finances.

As many as 36.4% of these employees, defined as contributors with 15 years or more of relevant experience, said they are considering taking out a loan from their retirement accounts. Alarmingly, over 39% of them described themselves as feeling despondent because of debt, and almost 46% said they are forgoing medical treatment because of the cost.

Employers have an opportunity here to introduce important support services that can have a material impact on this group of employees such as financial counseling, access to a financial advisor, and mental health services. Employees who believe their companies care about their wellbeing are more engaged, productive, and satisfied.

Identifying the Areas of Disconnection

Employers can and should leverage data-driven, insight-generating approaches such as quantitative research to identify areas where employees' perceived value of a benefit does not align with its actual value. With these insights, employers can efficiently direct resources toward areas with the most problematic value-perception gaps.

In the OneDigital Study, researchers found that only 58% of respondents felt their employer's medical plan was competitive with those offered by similar employers. For employers who have made every effort to match and mirror their competitor's benefits package, this finding can be especially frustrating.

Fortunately, improving employees' perception of their benefits packages is less about expanding offerings and more about strategic benefits communication. A results-focused approach should include intentional communications, programs to educate and enhance benefits value-perception, and impactful messaging tailored for the workforce demographic.

Personalizing Benefits for a Diverse Workforce

Another way to improve the perceived value of healthcare benefits is to make sure employees have access to the benefits they most value and need given their life stage and career journey.

For example, in the OneDigital Study, participants were asked to allocate a fixed budget of $100 towards various health and financial benefit offerings. It was discovered that married employees with children were willing to spend the most money on healthcare costs, such as medical insurance, health savings accounts, and supplemental health insurance.

By comparison, single parents allocated the least money towards healthcare benefits. Compared to their peers at other life stages, single parents set aside the highest amount towards financial security benefits such as life insurance, disability insurance, and dependent care flexible spend accounts.

When it comes to their health, success and financial wellbeing, employee needs vary significantly based on where they are in their life journeys. Explore some of these findings: 3 Surprises From OneDigital's 2024 Employee Value Perception Study.

Discover the key to bridging the gap between employee expectations of benefits and employer perceptions by downloading OneDigital's 2024 Employee Benefits Study.