Companies are taking a number of measures, from cutting staff to decreasing hours to increasing workloads, to help cope with the current economic instability. However, companies across all industries face a paradox when it comes to human capital management.
While conventional wisdom might dictate that scaling back is the only option, forward-thinking organizations recognize that they also need a strategy to respond to the needs of an over-extended workforce and retain key talent so they can maintain their competitiveness and be ready when the economy rebounds.
In today's climate, it is even more critical for organizations to forge ahead, promote a sense of stability, ensure transparency, and communicate the value they place on each employee. As a result, human resources professionals increasingly find themselves on the front lines as they assume a more vital role in allaying concerns among employees.
Indeed, the global consulting firm of Watson Wyatt suggests that organizations use communication to maintain employee morale in times of financial crisis. And when it comes to maintaining morale, it’s critical to address what’s most important to employees, which next to job security, is their benefits and compensation.
The link between employee morale and benefits is stronger today than ever. According to MetLife’s 7th Annual Employee Benefits Trends Study, 56% of employees reported that they appreciate their workplace benefits more than ever before because of the market volatility. In addition, nearly half (46%) said that they are also taking a greater interest in understanding the benefits they receive through the workplace because of the economy.
At the same time, one-third of all workers are concerned that employers will reduce workplace benefits over the next 12 months. However, the good news is that fewer than 15% of employers surveyed expect to make such cuts, according to MetLife. The reason? Perhaps because 39 percent of employers (and 50% of those employers with 2,500 or more employees) believe that workplace morale is strongly linked to the quality of employee benefits.
However, while employers see the connection between benefits and morale, which translates to increased productivity, surprisingly they are not seeing a similar correlation between benefits and loyalty (i.e., retention). In the MetLife survey, 72% of employees said retirement benefits were a significant factor influencing loyalty, compared with 40% of employers. Moreover, 69% of employees said that non-health benefits (i.e., life, dental, disability, and vision) play a strong role in workplace loyalty, compared with only 41% of employers.
Sort through all the statistics and the mandate for human resources becomes clear — the benefits that are provided, as well as the way in which they are communicated and delivered, is an integral component in assuaging an anxious workforce, assuring employees of their value, and making sure top performers are retained. For the organization as a whole, concentrating on improving awareness of total compensation will help improve the bottom line.
Making a strategic communications investment
University Medical Center, a private, not-for-profit, 355-bed hospital located in Tucson, Ariz., illustrates how solutions that can effectively and efficiently automate functions, such as benefits enrollment, can be viewed as a strategic investment that not only improve internal efficiencies, but also serve as a communications vehicle.
In 1990, University Medical Center converted to a new payroll and human resources information system. However, it wasn’t until 2007 that they addressed the need to move to an online benefits enrollment service to relieve the burden created by manually processing benefits elections. While flexibility and ease of use were obviously key determinants is the selection of an online solution, University Medical Center also wanted the system to serve as a corporate communications platform. In this context, University Medical Center viewed benefits enrollment as an opportunity to embed strategic communications into its online solution and build an infrastructure that would also be flexible.
Accessibility is the first principle of communication — in other words, your message needs to find its recipient. And in today's world, where people are more inclined to get information online — whether it’s through a work or home computer or via a laptop or other mobile device — it is critical that organizations build flexibility into their communications.
To that end, University Medical Center’s employees were able to access the online service 24/7 and log in from anywhere — home, work, or even a library. Many employees logged in from home — preferring the ease and flexibility of being able to have family members on hand to communicate with while going through the process. Human resources staff was also on hand during regular hours to provide support and answer questions.
Moreover, University Medical Center selected a solution where they were able to customize the look and feel of the site (i.e., portal), as well as integrate messages that reinforced their culture. The online enrollment services landing page included a message and instructions from the hospital’s CEO. The flexibility to customize its online service helped University Medical Center create a site that was familiar to employees while reassuring them that the process was easy and reliable.
Most important, the key to a successful solution is having good communications and enrollment tools that walk employees through the process. To that end, University Medical Center also uses its portal to provide resources — including FAQs, Summary Plan Descriptions (SPDs), a copy of its Benefits Handbook, and links to each benefits provider. By providing how-to communications and automating communications protocols, organizations can empower employees with the tools and information they need to make decisions.
From a communications perspective, University Medical Center also rolled out online total compensation statements to reinforce its value proposition. In addition, they mailed pre-enrollment statements to employees in August so that they had plenty of time to view their current elections in anticipation of open enrollment for the next plan year. Updated online statements, which can be viewed by employees and show their new elections, serve to reinforce University Medical Center’s commitment to provide information and communicate value.
Another important component in an efficient and effective benefits communication strategy is increasing utilization. Overall, University Medical Center reported that participation in their benefit plans increased — 120 employees who were eligible, but had not previously enrolled, did so using the online solution. They also had an increase in FSA and supplemental life insurance participation. University Medical Center attributes the increase in enrollment to the actual solution, which served as an education tool to clearly explain the benefit options and the costs per pay period.
Communication as a core business function
Much has been written about the value of communications in business while, at the same time, it has long been considered a “soft” function that cannot be tied to a quantifiable return on investment. However, a Watson Wyatt study, Connecting Organizational Communication to Financial Performance, reported that a significant improvement in communication effectiveness is associated with a 29.5% increase in market value. While no one can predict with certainty when the economy will recover, stabilize, and return to a level of market growth previously seen, it’s clear that a company’s ability to maintain communication with its most important asset — its human capital — about what matters most to them — benefits and compensation —i s a strategic investment for its immediate and long-term success. — E.B.N.
