As a result of competing priorities during the financial crisis, benefits education and communications moved to the bottom of companies’ priorities for their benefits programs. According to The Importance of Employee Benefits Enrollment and Diversity Communications Strategies, the third in a series of research briefs stemming from Prudential’s fifth annual study of employee benefits, helping employees make better benefits decisions and addressing the diverse benefits needs of a company’s employee population have been at the bottom of the list of employer objectives, with plan sponsors ranking them at 35 percent and 28 percent respectively in terms of importance.

“Given the challenges companies’ HR professionals have faced, ranging from downsizing to understanding the impact of the new health care legislation, it’s not surprising that companies have focused less on benefits education and communications,” said Jean Wiskowski, vice president of Marketing, Prudential’s Group Insurance business. “In improving markets, the value of benefits programs as a competitive differentiator will continue to grow. So, closing the benefits knowledge gap is critical for employers and employees. With the right information, employees can take full advantage of their benefits, and employers can realize the intended value of their benefits programs.”

Underscoring the change in prioritization in benefits, in Prudential’s Study of Employee Benefits: 2007 & Beyond, plan sponsors rated benefits education more important than cost-sharing or giving more financial responsibility to employees. Today, those statistics are reversed. In the latest study 34 percent state cost sharing as a highly important benefits strategy compared to 19 percent in 2007, and 28 percent state increasing employee benefits as highly important compared to 34 percent in 2007.

As employers prioritize giving employees more decision-making and financial responsibility for their benefits, the study clearly reveals that most working Americans are not feeling informed enough to make the best decisions for themselves and their families. About 24 percent of employees surveyed indicate that they tend to choose the same benefits and 44 percent read some information and possibly discuss options with a relative or friend, but in general don’t make many modifications from year to year.

“Inadequate communication during the benefits enrollment process doesn't encourage employees to really think through their selections,” said Wiskowski. “These decisions can have a dramatic impact on both their health and financial security. To help employees make the best choices, the programs and the consequences of their decisions need to be well understood.”

The study also highlights some of the opportunities and challenges for companies to most effectively communicate to increasingly diverse workforces. The study indicates that 70 percent of Whites and 75 percent of African Americans rate employee benefits higher in importance when deciding whether to take a job, as compared to 41 percent of Asian Americans. African Americans are more likely to be “highly interested” in having tailored communications than any other ethnic group. Women show a clear preference for receiving benefits communications via workplace e-mail rather than home e-mail. Despite the growing differences in communication preferences across the diverse groups of employees in the study, only 21 percent of plan sponsors think that tailoring benefits communications to their various employee segments is “important” to their benefits strategies—a drop of five percentage points from four years ago.

“Employers who commit to creating a benefits strategy that is reflective of their entire workforce will clearly have a competitive advantage,” said Wiskowski. “This data provides an opportunity for companies to look at a variety of communications approaches that achieve the goal of getting employees to sign up for the benefits and protections appropriate for them and their families.”