Boning up on benefits communication - Employee Benefits - Brief Article

When it comes to creating loyal employees, could communication about benefits be as important as offering them? A new study by Aon Consulting Inc. says it is.

According to Aon's Workforce Commitment Index, which measures a company's success in building and maintaining employee trust, good communication of benefits has a higher correlation with commitment (.38) than health plans (.22) or employer-paid pensions (.26). In general, the more closely benefits meet employees' expectations, the less likely employees are to pursue other employment opportunities, says Patricia Zar, senior vice president at Chicago-based Aon. Talking about benefits shows that employers care about their employees, she adds.

Indeed, benefits communication trumps even employee pay, says Zar. When bonuses and raises are scarce, managers need to remind employees what their benefits are worth, she says.

Charles Elson, director of the Center for Corporate Governance at the University of Delaware, concedes that employees whose benefits meet their expectations may feel more highly valued. But if the economic basics aren't being met, he says, no amount of positive spin can keep someone at a job. Pay and the benefits plans themselves--not talk about them--are what retain employees, says Elson. "In the long term, you cannot make a plan look better than it is in reality."

Nonetheless, it's important that employees understand and appreciate what their benefits plans are worth, argues Dan Ryterband, New York-based managing director at compensation consultancy Frederic W. Cook & Co. Perception is what drives employee behavior when it comes to benefits, he says. And frequent, honest, and direct communication can improve that perception. "You can have the best benefits plan in the world," adds Ryterband, "but if employees perceive it as a poor plan, it doesn't do much for the bottom line."

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