Recent research shows that 25% of the overall workforce feel only a little or not at all informed about their employee benefits and how to use them. Unfortunately, this gap widens when it comes to young employees, as 47% of Gen Z workers report feeling this way.
When young employees don’t understand benefits, they can’t fully take advantage of them, leading to a lack of support in the areas where they need it most. To fix this issue, it’s crucial to understand why it happens and implement actionable strategies to keep it from negatively impacting your workforce.
Why Understanding Benefits Is One of the Biggest Gaps in Employment
While HR professionals may think they’re communicating well, benefits information doesn’t seem to be getting through to Gen Z employees. Often, the gap persists due to several structural and psychological barriers.
First, younger employees may experience what feels like a “literacy gap” due to most benefits materials being written in industry jargon.
Employees don’t think in terms like “coinsurance,” “deductibles,” and “out of pocket maximums.” Consequently, they may struggle to translate plan documents or communication from vendors or HR into how that benefit actually works during a real-life medical or financial event.
The fallout from this issue compounds when employees are bombarded with open enrollment information once a year. The window is brief, and employees often feel pressured to simply elect the same benefits year after year without any real understanding of their options or new offerings.
Because brokers rarely help employers build structured, ongoing education programs, employees end up abandoning benefits or failing to fully take advantage of them, which leaves them feeling unsupported when it matters most.
4 Strategies HR Can Use for Explaining Employee Benefits at a High Level
Benefits education is about more than simply forwarding vendor-provided resources. There are several ways to help your young workforce truly make sense of what’s available to them and make selections that will yield real-world results.
1. Use Real-World Scenarios to Show Instead of Tell
Instead of distributing memos delineating plan details, try creating a few relatable employee personas that demonstrate how different benefits might work in practice.
Even a quick visual guide with three profiles that match your young workforce can help employees self-identify their needs and understand the outcome of their choices in plain language.
2. Provide a Standardized “Cheat Sheet” for Jargon
In many cases, employees might disengage during renewal season because they’re too embarrassed to ask for help in understanding basic terms.
HR professionals can easily strip away the complexity and answer questions that employees may be too afraid to ask by providing a one-page glossary that translates insurance jargon into plain language. Make sure to use clear metaphors to show how these terms impact employees in real-world scenarios.
3. Leverage Technology for Personalization
Where possible, consider how you can implement interactive “decision support” estimators.
Find or build a simplified mathematical calculator or widget where your workforce can use their personal employee compensation figures to estimate and compare costs for each of their plans. This helps them understand which plans may provide the most bang for their buck.
4. Alternate Between In-Depth Sessions and Microlearning
Consider giving employees access to bite-sized, asynchronous micro-content that they can consume on demand to help them understand various options or concepts related to their employee compensation and benefits menu. A few topics may include:
- Where to find benefits information in the employee handbook
- What to know about this year’s benefits options
- How to use a health savings account
Additionally, you can offer longer 45- or 60-minute sessions throughout the year. These longer sessions provide in-depth information and a chance to ask questions so that people actually understand what their benefits package includes.
Education Is the Foundation of an Effective Employee Benefits Program
Having a great employee compensation and benefits strategy is meaningless if your team doesn’t understand how to use them. Investing in clear, year-round benefits education is what drives plan utilization, protects your employees’ financial health, and maximizes your corporate ROI.
The good news is that you can turn confusion into clarity and empower your workforce to make smarter benefits decisions today.
Contact our team at Benefits Advisory Group to learn more about how our tailored education, communication strategies, and annual virtual group sessions can transform your open enrollment experience and elevate your entire benefits program.