Library Worklife

Volume 2, No. 3 • March 2005

HR Practice

Do Your Employees Really Know What Benefits They Have?

By Paula M. Singer, PhD, and Jeri Hurley, PHR, The Singer Group, Inc.

With the average library system spending nearly 40 percent of gross salary on employee benefits, extra attention needs to be given to communicating the value of these benefits to employees. Libraries realize the importance of providing competitive benefits to employees in order to retain current employees and attract new employees. But, do employees realize how much time and money the library spends to provide them with these competitive benefits? In fact, are employees even aware of what the total benefit package contains, how it can help them, and how to best utilize it? In most cases library systems are spending thousands of dollars per year on employee benefits, while the average employee only sees the bottom line—how much money comes out of their paycheck to pay for health insurance. How can we bridge the gap between the conscious efforts of employers and the perceptions of employees when it comes to benefit packages?

Proactive library systems can bridge this information gap in many ways through a variety of communications. First, the employee needs to be informed of exactly what benefits they receive from their employer. It is the responsibility of the organization to ensure that the employee is aware of all the benefits they receive as well as the monetary value of these benefits. Typical employee benefits include:

Medical insurance with prescription drug, vision, and dental coverage
Life insurance
Disability insurance (short and/or long-term)
Flexible Spending Accounts, including medical and dependent care
Retirement plans (defined benefit and defined contribution)
Federally mandated benefits: Social Security, Medicare, workers’ compensation, unemployment insurance
Leave: vacation, sick, personal, holidays, bereavement
Others: including long-term care insurance, use of company cars, use of cell phones or laptops, and other miscellaneous benefits

The library system’s executive management team and human resources staff should put themselves in their employees’ shoes in trying to determine the most effective means of communicating benefits plans to employees. Depending on the size and culture of the organization, different communication tools will work with different employers.

Provided below are some communication tools that can be used in combination or independently to increase communication with employees about benefits:

New Employee Orientation: When a new employee begins work they should be provided with a summary of all benefits offered to them, how and when to enroll in the different insurance plans, costs per pay period of different plans, and who to contact with any questions about the different plans. All benefits plan forms and details need to be included with the new employee orientation package.
Benefit Fairs: A day set aside for the library to provide employees with access to representatives from all benefit providers can be very helpful and can help employees have their most technical questions answered. The providers set up information about their specific plans and are available to speak directly to employees. Employees enjoy the direct face-to-face contact with the providers and may end up with a better understanding of the plan that best fits them or their family. Benefit fairs are usually offered in conjunction with the open enrollment period so that the providers can communicate any changes in the plan for the upcoming year. Vendors to include: Medical plan, Prescription plan (if separate), Life and Disability plan, Retirement plan, and the Employee Assistance Plan provider, if applicable.
Benefit summaries: These are simply an easy to read brochure or one page document that summarizes the benefits provided to employees so that they can see the big picture in terms of their benefits. Employees can refer to this document instead of having to look in an Employee Guidebook or at individual insurance documents to find out what basic benefits are provided to them. This information could also be used as a marketing tool when recruiting at a job fair or with a recruiting firm. These summaries can be given to employees when hired and when any changes have been made in the plans. The summaries should be concise and easy to read for all employees.
Notes on paychecks: Short notes can be put on paychecks to remind employees of available benefits. For example: “Remember—you can receive a three month supply of your maintenance prescription for a two month co-pay by using the mail order prescription plan. Contact the Human Resources office for more information.” Or “If you have a medical or dependent care flexible spending account, be sure to use all money in the account before December 31 in order to avoid losing those funds.” Even though most employees utilize direct deposit for their pay, they still receive a pay stub.
Benefit statements: This is an extremely effective communication tool in that it shows the dollar value of the benefits package provided to the employee—a dollar value that is provided by the employer above the employee’s salary. Statements can be produced internally or professionally produced externally by another company. These statements show each employee the “hidden paycheck” and should breakdown every benefit line by line in terms of how much the library pays and how much the employee pays (if anything) for each. Pie charts and graphs are often used on these statements to show the employee that their gross salary is only a portion of their “total compensation” from the library. These statements are personalized for each employee and their selected benefits. When produced externally, they can be a large expense, but prove to be invaluable in showing employees true value of benefits.
Retirement Calculator: This communication tool uses the employee’s salary to show them, in a chart format, how small contributions to a retirement account will compound over the years, especially if contributions are started early in their career. This statement should also be personalized for each employee and should also show the library system’s match. Employees should be reminded of the match and that they should take advantage of this “free money” that is put in their retirement account when they contribute to the plan.
Retirement Worksheet: After the employee decides to enroll in a retirement plan these worksheets will help employees decide into which funds they would like to allocate their money. Decisions will be based on how many years the employee has before retirement, and the level of risk willing to be taken with their funds.
Personal contact information: All communication tools should list a specific contact person within the library and also a contact person at the various plan vendors.
Website/Intranet: The library system’s Web site and intranet are wonderful places to list all benefit summaries and a retirement calculator page that employees can use on their own. Updated links can be provided on the library’s Human Resources Department webpage and should be easy to use and access by employees. If some employees do not have access to a computer, human resources could designate a computer to be available for those employees.
Insurance company Web sites: Most vendors, especially health insurance and retirement providers, have their own Web site that all covered employees can access. On the health insurance Web sites employees can order new cards, check on existing claims, find doctors in the area, download and print forms, and research a common disease. On the retirement plan Web sites, employees can check the status of their accounts, move money into different funds, and see prospectus information.
E-mail: If the library system does not have an intranet, e-mail can be used to circulate benefit summaries and any changes in benefit plans. E-mail can also be used to inform employees that benefit information is available on company and/or provider Web sites.
Newsletters: This tool can be distributed electronically or as a hardcopy. The newsletter can be used to encourage employees to make the most of benefits, for example: “If you contribute 6 percent of your salary on a pre-tax basis to the 401(k) account you will receive the maximum match to your account!” Updates to benefit plans can be posted, and the announcement of a benefit fair and open enrollment dates can be posted in the newsletter.
Wellness Day: This benefit can be provided in conjunction with a benefit fair or held separately. On this day, the library system arranges to offer many health and wellness-related services to employees on-site. Services such as blood pressure screening, cholesterol tests, blood donation, flu shots, massages, body fat index measurements, discounts to memberships at a local fitness center, access to a nutritional expert, and information concerning Employee Assistance Plans, weight loss plans, a variety of support groups, and so on, can be offered at a Wellness Day.

Whether you decide to use one or many of the communication tools listed above it is important to provide consistent follow up with employees regarding benefits. At a minimum, you should be in contact with employees about the details of their benefits on an annual basis, more often when changes are made. Patience and persistence are key, since an employee may need to hear about the benefits three times in three different manners before they completely understand how to use the benefit. For example, a retirement calculator that calculates the compounding of retirement contributions over time may need to be given to an employee many times before they decide to join the plan.

Remember, as an, employer, since you have spent thousands of dollars to provide competitive benefits to each employee, you need to take the more important and ongoing step of ensuring your employees understand and appreciate the value of these benefits.

Please feel free to contact Paula or Jeri at pmsinger@singergrp.com or jhurley@singergrp.com.

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