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How to decrease HR costs and increase benefits utilization

How to decrease HR costs and increase benefits utilization

You can lead a horse to water, but you can’t make him drink. Like this old adage, businesses often feel like they’re leading their employees to the benefits watering hole, but many never even take a sip. Even with HR enrollments and education, tax benefits, and even free benefits, it can be challenging to get employees excited about some benefits. Here are some do’s and don’ts about how to both improve benefits utilization and decrease HR costs.


Do start with leadership as a good example

With new or existing benefits, employees are comforted knowing it’s not just for a “certain group” of employees. Have the President, CEO or similar leader speak about these benefits and how they personally find them valuable. If it’s good enough for the “top” leadership, it’s good enough for anyone.

Do give personal examples

As a tie into the “do” above, have a leader in the company give personal examples and stories. Showing employees an illustration on paper about how a benefit may be valuable doesn’t resonate as much as a personal, thoughtful story. A new Flexible Spending Account may offer great benefits on paper, but explaining how it helped someone’s family during a difficult health scare makes it human and relatable (and valuable).

Do use psychology to create priority

During enrollment events or new hire meetings, be sure employees understand what they are going to miss if they don’t act soon. Most benefits focus on what value they bring, but focusing on what value will be lost if action is taken tends to help people make decisions quicker.

Do rely heavily on outside vendors

Utilize outside vendors when possible to help educate and motivate employees. This can cut down the amount of time the HR department uses on preparation, printing, meetings, etc.

Do give employees the ability to speak with a professional one-on-one, even at a fee

One of the most common reasons employees don’t use employer benefits is due to lack of disposable income. However, employees simply may not know how to properly manage what income they do have. Allowing them to meet with a professional, such as a board-CERTIFIED FINANCIAL PLANNER, allows them to receive custom advice on how to budget and use benefits. Even if this service comes at a fee, it may still cut down on HR time and cut costs, such as taxes once benefits utilization increases.


Do not segment the audience

Don’t have special benefits education for “blue” and “white” collar employees. Certain groups of employees may think the benefits are only meant to help the company and not the workforce as a whole. There is no reason why you should segment your employees and treat them differently.

Do not allow education to turn into sales

If you invite a benefits vendor to come on site to educate your employees about a given benefit, be sure expectations are set beforehand and a representative from your company is on hand to pull the curtain if the vendors becomes solicitous. Benefit vendors should be used to educate your employees, not sell them something.

Do not use industry jargon

Most employees don’t understand benefits jargon. Use plenty of analogies when describing how certain benefits work. Graphics are helpful also.

Do not just rely on the benefits handbook

Employees are busy. They don’t have the time to sit down and read through pages of information about benefits. Although you think they should, we must face reality. A human touch that motivates them and explains how they may personally find value in a given benefit may prove more effective.

Do not forget about benefits during employee raises or bonuses

Without getting personal, don’t forget about discussing benefits when employees receive raises or bonuses. A friendly reminder that employees may be able to use part of their bonus to save into the company HSA plan or 401(k) plan may help them ease into greater utilization.

Jumping cartoon

Benefits utilization can be frustrating and time-consuming for HR professionals. Having a personal touch and being genuine about the value of these benefits sends a message to employees that is stronger than any word. If you build it, they will not necessarily come, so use some of these do’s and don’ts to help you build a stronger benefits package.

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Travis W. Freeman, CFPPresident

Travis Freeman is the President of Four Seasons Financial Education, a regular contributor to local and national media such as Fox and NBC news, the author of Make Your Money Work and a national financial literacy advocate. ...

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