Investing in Total Reward Statements Can Provide More Value Than Investing in Richer Employee Benefits

• Employees can only appreciate the value of a benefit if they understand its monetary value. The truth is that most people have no idea how much it costs to purchase health insurance for their families — certainly not at the benefit levels provided by most companies.
  
  A 2005 study by Watson Wyatt further demonstrates that how well a company communicates the value of its health benefits can do more to retain top-performing employees than the actual richness of the benefits themselves. Communication plays a critical role in improving the retention power of health benefits. The study found that, among employers that offer rich benefits but have poor communication strategies, the average turnover rate is 17% for top-performing employees. Among employers that offer less costly benefits but have effective communication strategies, the average turnover rate is 12% among top performers. Supplementing rich benefit programs with effective communication practices yields employers an even lower average turnover rate of only 8% for top performers.
  
  These findings correspond with the results of the firm’s WorkUSA® 2004 study. Only 22% of surveyed employees at organizations that poorly communicate the value of their rich benefit programs are satisfied with their benefit package. Conversely, 76% of employees at organizations that effectively communicate the value of less rich benefit packages are satisfied. The effectiveness of the communication about the value of the benefits is clearly the determining variable – not the richness of the benefit package itself.
  
  Have you thought about how your Total Reward Statements can help you more effectively communicate the value of your Total Compensation package?
  
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