How Employee Benefits Education Affects Retention
It’s easy to lose something if you don’t properly care for it. Whether your plants have withered, or your keys are nowhere to be found, we all know the feeling. But, sometimes, the situation is not that trivial.
In the workplace, employers must keep employees happy to avoid losing them—knowing their happiness will affect overall retention.
After all, the most valuable asset of an organization is not tangible. While inventory, property, and investments may be important, the thing that matters most is the people. Yet, despite executives attributing 72% of their company’s value directly to employees,1 52% of voluntarily exiting employees say their manager or organization could have done something to prevent them from leaving their job.2
Do your employees understand their benefits?
Many employers believe their employees are happy with their plans and are enrolled in benefits that best fit their individual needs. Unfortunately, this is not always the case.
In fact, 91% of C-level executives and vice-presidents believe their employees are happy with their benefits, but nearly a third of their employees said they weren't.3 And despite their dissatisfaction with benefits, many don’t make enrollment changes. For example, 35% of employees chose to keep the same benefits as the previous year.4
Unfortunately, there is often little effort to ensure those plans are appropriate or that employees even understand their options. In a recent study, 1,000 people were surveyed regarding their healthcare literacy. About one-third (35%) of respondents said they either somewhat understand, don’t understand, or know nothing about their coverage and benefits.5
How are employers affected by employee benefits?
The lack of benefits education may negatively impact employee retention. Studies have shown that employees spend just 32 minutes on average researching their options, so they may not be fully utilizing their workplace benefits to maximize potential savings.6
But, it’s not just the employee’s finances at stake. When an employee leaves due to benefits frustration or miseducation, there are costs to the employer as well. Research by the Society for Human Resource Management (SHRM) suggests that the overall replacement costs of a lost employee can be as high as six to nine months of their salary.7
So, if an employee makes $60,000 per year, it could cost up to $45,000 to replace that single employee. Not only is replacing an employee a fiscal loss for employers, but it’s also a loss of their unique knowledge and experience.
What if employees were better educated on benefits that fit their unique needs?
When allowed one-on-one benefits consultation and education, employees are more likely to choose the right coverage options. In turn, they may increase their overall satisfaction and avoid wasting money on inappropriate benefits. When it comes to retaining employees and increasing total compensation satisfaction, benefits education can play a critical role.
For more information regarding effective benefits education processes, check out these links below:
This blog is up to date as of December 2020 and has not been updated for changes in the law, administration or current events.
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