The recession has taken its toll on many components of employers’ total rewards packages in recent months. While some of our client organizations have implemented minor benefit tweaks, others have implemented hefty increases in employee contributions for benefits and cancelled 401(k) matching. There is no one simple solution or pat answer, to be sure. But one thing that is clear amidst the clamor is that an effective communication plan is needed, no matter what your message is.
Clearly, the organization is well advised to make prudent benefits adjustments if they are needed to keep things afloat. The point we make is to do so in a thoughtful manner that will not result in unintended consequences. When it comes to the company’s Benefit Plan, you may be planning to raise deductibles, co-pays, or out-of-pocket maximums; eliminate some medical plan choices, or increase employee contributions to make ends meet. If so, the most critical thing to remember is that honest communication is key. Employees will be well positioned to react to your announcement when you give them the information they need to understand why you are doing what you are doing. Be as transparent as you can about the changes–let your team members know how much the company spends on benefit programs. We are constantly reminded that most employees in many organizations have no idea how much their company is spending on benefit programs until they leave and get a glimpse of COBRA premiums…shocking! And if the perceived value of the benefits is low, then you are not getting the bang for your buck, no matter how much your organization is spending.
Entitlement is still alive and well in corporate America, even in the midst of these tough times. But to change that mindset, it is clearly the employers’ move. Honest and straightforward communications will carry you far in gaining employees’ interest and respect. Benefit Plans still have value, in spite of the changes many organizations have been forced to make. Make sure that you do whatever it takes to get the message out!
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