Often the biggest reasons voluntary benefits programs fail is that employers believe they are giving employees exactly what they want. This belief if usually based on anecdotal feedback, which, while useful, only provides one view of the overall picture. Understanding both the current and future needs of employees and then tailoring the offerings to those findings is how employers can garner the greatest impact in terms of lowering costs and attracting and retaining talent.
Consider these facts:
- Companies are facing opposing pressures to drive employee engagement and to manage rising costs.
- 61% of employers say that benefits are very important and receive full management support as part of total rewards strategy.
- 81% of respondents face benefits costs that are greater than 10% of total payroll.
- Companies are expecting an 18% annual benefit cost increase over the next five years .
Innovative companies are adopting a customer-centric approach in designing benefits with “customer” being replaced by “employee”.
Why new benefits programs fail—and why personalization may be the answer
One of the biggest challenges companies face when rolling out voluntary benefits programs is getting employees to participate and engage over the long term. In these cases, HR must ask whether employees really want that benefit (customer-centric), or whether the company thinks the benefit will give them a competitive edge in attracting talent (company-centric).
Take the example of wellness programs. Initiatives that directly benefit the employee in terms of reduced benefits costs, such as checkups and biometric screening, see plenty of participation, but the take-up rate for other, activity-based initiatives is often low. The reasons cited vary from “I was busy at the time” to “I didn’t think I needed it” to “It was too difficult to participate.” Yet companies continue to offer programs that are not based on analysis of employee needs. Personalized design implies integrating employee experience and using analytics to create more employee-centric, meaningful programs.
With benefits being one of the top five drivers of employee retention, it is vital for HR to examine the three steps to personalizing benefits for greater impact outlined in this article.