Do Employees "Get" Benefits - Not

Compensation is one of the least understood aspects of your company's people practices and policies. Employees do not comprehend the true cost of your compensation package.

Employers don't want employees to talk about compensation with each other, so compensation can take on an aura of mystique. Companies rarely advertise their pay scales, so it is difficult to obtain meaningful information for the jobs in your market. Yes, I know salary calculators and online resources exist, but the comparison is still difficult.

Even more of a mystery than compensation, though, is the cost and the value of your benefits. According to a survey conducted by the Charlton Consulting Group and analyzed and reported in the HR Daily Advisor, employees "estimate the cost of benefits pay to be 30 percent or less over and above pay. In fact, according to government statistics, the average cost of benefits is nearly half again that … 43 percent of pay."

Employers need to recognize that this employee misperception probably exists in your company. The key to helping employees understand the true cost of the benefits you provide for them is education. You need to communicate to people, starting in their job offer letters, the value of your benefits package.

This message should be reinforced during new employee orientation. The only way you can capitalize on your benefits dollars invested in your employees is if your employees know the value of your investment in them. One way to address this ongoing need for education is to provide an annual benefits statement to each employee. Another is to provide annual training that describes and summarizes the value of each benefit.

Don't assume your employees comprehend this - they don't. It's your job to educate to make the most of your investment in your employees.