Benefits Education: 3 Keys to Improve Employees’ Financial Wellness

Employees’ benefits are a constant balancing act: While employees have pushed the national average for 401(k) savings higher – thanks in part to automatic enrollment – both workers and their employers are simultaneously grappling with rising healthcare costs and their impact on coverage.

Amid all of this, one clear trend is taking shape: employees are more tuned into their benefits plans than ever before. They’re paying close attention to what companies offer, looking for opportunities to customize benefits for their specific needs, and expecting employers to help them make the most of their plans. 

With this increased attention comes increased pressure on companies to not only offer benefits that meet and exceed employees’ needs, but provide their workers with the resources they need to understand and maximize the value of those offerings.

Employees Still Don’t Understand Their Benefits

Many employers believe they’re already effectively supporting their employees’ financial well-being. But employees tell a different story, according to Payroll Integrations’ Employee Financial Wellness Report: While nearly half of employers say they’re fully supporting employees’ financial wellness, only 28% of employees agree. This disconnect points to a deeper issue than the benefits companies offer and what employees need. It’s about how benefits are communicated by employers and understood by employees.

Even the most well-designed benefit packages can fall short if employees don’t understand them. Too many workers struggle to navigate how to use their benefits – and some don’t fully grasp what’s available to them in the first place. Employees acknowledge this gap – and it’s why nearly three-quarters of employees want more information and guidance around their company benefits.

When education is broken down by generation, it’s Gen Z workers who feel the least educated on benefits, with only 24% of them feeling completely educated on their offerings (compared to 31% of Millennials, 26% of Gen X and 25% of Boomers). While this may partly reflect that Gen Z workers have spent the least amount of time in the workforce, it’s also likely that they hold their employers to a higher standard. They view this as a core part of their workplace experience and expect employers to provide clear guidance.

Companies are making significant investments in benefits programs, but if employees don’t understand or use them, it’s as if they don’t exist. 

Unlock Participation With Better Education

If employees don’t know that certain benefits exist, they won’t participate in them.

For example, in a survey of nearly 1,000 employees, 61% of employees said they didn’t know that their workplace offered caregiving support, which has become a highly sought-after benefit by many.

This knowledge gap is even more pronounced with wellness reimbursements like Lifestyle Spending Accounts (LSAs), in which only 3% of employees were aware that their companies offered them as a benefit.

Employers can’t assume that providing benefits is enough if they want to play a meaningful role in their employees’ financial well-being. Those need to be paired with real education and overall company-wide awareness about them, with more than the once-a-year open enrollment discussion. Employees need to know what benefits are offered, why they’re important and how they can make the most out of them. The impact of this is not surprising, but clear: When companies fill the benefit-knowledge gap, employees are more likely to participate in the benefits.  

Take health savings accounts, for example. Back to the Employee Financial Wellness Report: Forty-four percent of employees who felt educated on their benefits were three times more likely to participate in this benefit than those employees who did not feel educated. And 70% of benefit-educated employees participated in retirement benefits, while only 52% of those who don’t feel educated said they opted in. These are only two of many examples, but once employees know how these benefits can support them and their financial wellness, they are more likely to opt in. They are called benefits for a reason.

Ditch the Admin, Put Employees First

Most employers understand the impact of providing more educational opportunities around their benefits. Most simply don’t have the time or might hit a ceiling when they discover how bogged down their HR teams already are with administrative work.

HR managers spend about 12 hours of their work week on everything from onboarding employees to managing payroll deductions to ensuring compliance with the latest requirements. Twenty-seven percent of them report spending 20 hours or more on those same tasks.

Companies have long relied on spreadsheets and manual processes for these tasks, which is why teams are spending a large chunk of their week managing them. But solutions like automation technology can put many of these necessary, but time-consuming, tasks on autopilot. This can free up HR teams to focus on strategies to improve their benefits programs and fill the benefits knowledge gap. That might include:

1. Regular Check-Ins

Host in-person or virtual conversations with HR team members where employees can ask questions and hear more insights on the offerings.

By providing readily available check-ins outside of October or November (when plans may be preparing to restart), workers can feel more supported and in-the-know. This will not only reassure employees, but it will provide HR a look into areas where they should focus more or less on education.

2. Bring in Outside Financial Expertise

Bring in outside advisers and encourage participation in financial courses. Some aspects of, say, 401(k) plans might require additional expertise.

If you suggest options and create time with advisers, employees can gain an added layer of knowledge.

3. Tap into Tech

Try technology to do more than save time. By creating landing pages and making assets and important links available online, educational resources will be more readily accessible. This will also provide a virtual space to share key updates and deadlines as they happen.

At the end of the day, employee perceptions and market conditions will continue to evolve – but a strong, consistent benefits education strategy will ensure that no matter what happens, your workers are in-the-know.