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5 Steps for Communicating Benefits Changes

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in Best-Practices Leadership,HR Management,Human Resources,Leaders & Managers,Management Training

As your organization shifts more responsibility to employees to manage their own health and retirement expenses, you risk alienating your work force. But it doesn’t have to be that way.

Employees aren’t unhappy because their employers are asking them to shoulder more of the financial burden for their own health care and retirement. They’re upset because they feel their organizations aren’t helping them figure out how to come up with the money to do it, says a new Towers Perrin study of midsize employers and their staffs.

As a result, these changes that organizations hope will control costs are, in some cases, sapping their employees’ motivation and loyalty—which creates costly dips in productivity and increases turnover.

“Benefits serve as a powerful symbol of the organization’s commitment to employees,” says Dave Guilmette, director for Towers Perrin’s health and welfare practice. “When employees’ faith in that symbol erodes, so do their feelings of engagement and, in turn, the level of dedication and energy they bring to their jobs.”

The good news: Employees actually agree that their organizations need to control benefits costs so they can stay in business. Most even embrace the notion that they should share responsibility for paying for their health care and retirement nest eggs.

But they’re looking for more support from their employers—in the form of education, decision-making tools and clear, specific communication about what is changing and how they can manage the financial burdens.

5 keys to communication

First, let your employees know if changes are on the way.

The Towers Perrin study reveals that, while almost all employers expect to make changes to their health care and/or retirement plans in the next two years, nearly half of their employees don’t see it coming.

Here are five ways to prepare employees:

  1. Strengthen the “voice” and visibility of leadership in the change process. Employees who believe their organizations care about their welfare are more likely to believe their needs will be met (and more likely to stick around).
    Distribute formal notices of pending changes. Encourage informal brown-bag discussions between employees, HR and the organization’s leadership.
  2. Talk candidly about benefit changes. Explain the reasons for the changes (i.e., growing health care costs), as well as the implications for employees (i.e., how much extra it will cost them for health coverage). Use statistics to show that this trend is happening at a majority of U.S. companies.
    Be painfully clear about the implications. The Towers Perrin study shows that many employees don’t understand that a shift in responsibility for health care costs means they’ll have to pay more.
  3. Create messages appropriate to different employee groups. Employees with different income or educational levels will understand and be able to act on change and risk differently. Tailor messages so employees understand benefits changes in ways that are relevant to them.
  4. Start early. Before you alter benefits, let employees know the changes are coming and what they mean for them in terms of procedures and/or costs. Provide advice and resources for coping and answering questions.
  5. Offer tools to help employees manage the impact of the changes. Start helping with financial planning and money management advice, along with programs to stop unhealthy behaviors like smoking. Practical tools signal your organization’s concern for the well-being of your employees.  


Employee views of benefits costs

  • 91 percent of employees agree they have some responsibility to create their own benefits safety net.
  • 64 percent recognize that rising benefits costs are a serious business issue.
  • 42 percent say recent benefits changes have eroded their trust in management.
  • 23 percent say the changes in their benefits might spur them to change their jobs.

        Source: Towers Perrin 

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