Because of the steady increases in those costs that we've all experienced
in the last few years, savvy human resources professionals are always on the
lookout for something that will help them squeeze every last drop of employee
loyalty and goodwill out of their benefits dime.
Consider the results from the Society for Human Resource Management's
2005 Job Satisfaction Survey. Of the top five aspects of job satisfaction,
survey respondents placed benefits in the number one position.
Here's the rub: Employees need and want top quality benefits, but companies
are less and less able to afford them. So what can you do?
Nelson L. Griswold III, senior vice president of communications at Cornerstone
says part of the answer is to offer employees a range of benefits they can purchase
on their own. However, voluntary benefits alone are not enough. Rather, the
way in which you communicate your benefits can mean the difference between a
program that works and one that doesn't.
Clear communication is always important, but never more so than at benefit
enrollment time. "There has to be an extremely strong emphasis on professionally
done, professionally produced, pre-enrollment communication," Griswold
says. "The problem is that, all too often, the materials are written from
an insurance industry perspective. They use a bunch of language and a bunch
of terminology that employees simply don't understand."
Take-Home Pay Only Part of Story
Open enrollment time is an opportunity to make sure employees understand and
appreciate what the company is really doing for them, says Griswold. He suggests
personalized benefit statements, detailing the costs of everything from gross
pay and retirement contributions to the value of your noncash programs such
as the employee assistance plan: "This is possibly the most effective tool
HR can use to generate morale and enthusiasm among employees about their benefit
package and their compensation level. Most employees, in our experience, tend
to judge their worth by the net amount they see on their paycheck every pay
"Any HR pro will tell you that's a small percentage of what's
being provided by the company to the employee," Griswold continues. "A
benefit statement, properly done, will lay out all of the cash compensation
and the noncash compensation. By looking at this, the employee gets a bird's
eye view of the overall compensation package that he or she is actually receiving."
The results of this kind of communication can be dramatic. Cornerstone, a provider
of enrollment services for companies nationwide, was asked to conduct a voluntary
benefits enrollment for a mid-sized hospital. "They have about 735 eligible
employees," he explains. "The enrollment was entirely voluntary--no
employee had to participate, and there was no requirement that any employee
meet with a benefit counselor."
Griswold's company prepared customized benefit statements for rank and
file employees, and invited them to meet with an enroller to review the statements.
"I think there was some question on the part of most people involved as
to how much of an impact (the personalized benefit statements) would have on
"As it turned out, almost 100 percent of eligible employees met with a
benefit counselor and went over their benefits in the statement. A large percentage
then chose to participate in one or more voluntary benefits that the company
offered to them. It was very successful." So successful, in fact, that
the hospital's CFO requested benefit statements be provided to the executive
Voluntary Benefit Customers
Reap Rewards from Providers
But why is enrollment in voluntary benefits important? Say it with us one more
time: the rising cost of health care. Griswold points to the SHRM survey
in which the workforce places the greatest importance on benefits. "Employees
are looking for great benefits," Griswold says.
"And yet, in HR, people are trying to figure out how they're going
to pay for the major medical and any other benefits they already offer, never
mind additional benefit offerings. Voluntary benefits provide employers the
opportunity to give their employees a choice of additional benefits, at preferred
rates, even guaranteed issue for life insurance. That means that an employee
who would not be eligible to get insurance in the open market would be eligible
for life insurance through the enrollment offering. And this is at no cost to
the company," he continues.
The company also benefits through, in many cases, better rates on employer-paid
benefits. "We've been very successful with a number of carriers in
providing better rates on the employer-paid benefits companies offer, such as
short-term disability insurance, or long-term disability insurance, if they
also offer voluntary benefits," Griswold says.
"The carrier will say, for example,
'If you're offering our long-term disability, we'll give you
a lower rate on it if you'll allow us to offer your employees a whole life
policy and a critical illness policy.' At least one carrier I know about
will even offer an employee assistance program at no charge to the employer.
So there are bottom line benefits to the employer for offering voluntary benefits.
But more important is the whole morale boost, and the greater level of security
that the employee has because of these additional benefits," he explains.
While many companies offer voluntary benefits during their annual open enrollment
period, Griswold believes a more effective approach is to hold a second enrollment
period focused solely on voluntary benefits.
"We prefer to have the voluntary benefits offered off-cycle, maybe
4 to 6 months after the regular
open enrollment," he says. "From HR's standpoint, when an open
enrollment includes voluntary benefits--which require some education--having
an enroller sit down with
an employee and go over the
benefits can eat up too much time.
It can keep the employee off the
line too long.
"By breaking it into two enrollments, you're actually talking about
a much shorter amount of time for each enrollment period that the employee has
to be away from his or her desk or away from the production line. It also puts
the employee's focus on these additional benefits that are being offered.
That supports part of HR's agenda of emphasizing a broader and deeper benefit
Having been through open enrollment time, you may be shaking your head and
cringing at the thought of a second one. Not to worry, though. Companies that
specialize in enrollments can handle the whole process.
"Unlike the major core benefit enrollment, a voluntary benefit enrollment
is minimally invasive," Griswold continues. "The enrollment firm does
most of the work. We can prepare and provide all of the pre-enrollment communication
materials; all we need is a census spreadsheet from HR in order to create our
Then at the end of enrollment we produce and submit to HR a very clean deduction
file that is simply plugged in payroll. It's a very simple process from
HR's perspective. The process can be completed while HR is focusing on
much more pressing and demanding issues."