3 Key Considerations for DEI-Enhanced Employee Benefits

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Employee benefits are crucial for successful DEI initiatives; providing benefits to support an employee’s family, financial future, physical and mental health not only retains but also attracts top talent. Many organizations are undergoing employee benefits program restructuring, offering DEI leaders a key opportunity for high-impact engagement. 

Overall, here are the three top concerns to think about when addressing or restructuring your employee benefits programs:

  1. Employees don’t know what benefits they already have
  2. Employees don’t utilize their benefits because of hidden penalties
  3. Employees and employers disagree over which benefits are most useful

employees don’t know what benefits they have.

Inclusive benefits may already exist within your organization but do you and/or your employees know about them? Commuter Benefits reported that only 49% of employees could accurately describe their benefits package. Voya Financial found that 35% of employees lack full understanding of any of the benefits they enrolled in during their most recent open enrollment period. 

Why does this matter? 77% of employees who actually understood their benefits reported that they saw themselves staying at their organization for the foreseeable future. If employees don’t know what benefits they have, they’re not using them. If they’re not using them, it’s unlikely they’re making fully informed decisions.

Data from the International Foundation of Employee Benefit Plans shows that 80% of employees never even open benefits communications. Only 37% strongly believe that their employers adapt benefits communications to address personal situations. And only 4 in 10 employees strongly believe their employers’ benefits communication is accessible and understandable. Clearly, there is a lack of accessible communication channels regarding employee benefits.

Properly inform your employees by doing the following:

  1. Talk about benefits all year round. Refresh and enhance understanding regularly instead of relying on the one-time discussion during onboarding.
  2. Offer individualized communication channels. Suggest or conduct research on employees’ preferred communication channels (email, paper mail, social media, pamphlets, etc.) and offer individualized communication plans to facilitate better understanding. By focusing on personalized relationships with employees, you can reduce key risks in downstream DEI operating activities. 
  3. Provide live Q&A sessions and office hours. Providing regular online and in-person events where employees can learn about their benefits in a low-stress environment will increase internal transparency.

employees don’t utilize their benefits because of hidden penalties.

In 2017, U.S. employees took only 54% of their paid time off on average. In 2018, there were more than 768 million days of unused paid time off. 

Employees fear that taking off time will cause their employer or their peers to doubt their dedication. In short, they are afraid to be replaced. Employees also often have to work extra hours before and after time off to avoid working during their paid time off. Frontloading and backloading work either way undermines true paid time off. Moreover, there is a notion that more hours clocked means the individual is hardworking and more deserving of a promotion or a raise. Employers provide employees with days off but not an environment in which the employees can actually utilize them. 

Another example of an unused benefit in fear of penalty is wellness benefits. Despite the proven advantages of increased productivity and mental health, many wellness programs that companies provide yield abysmal participation rates. This is because employees are either too busy or fear gaining a reputation of lazy or unmotivated if they participate. Other employees do not utilize these wellness benefits because they either believe them to be unhelpful or do not feel encouraged to participate. 

We see a couple of common threads here. To start, employees do not want to be seen as replaceable and not hardworking. We also see that while there are benefits that look after the wellbeing of employees, there is a lack of a culture that celebrates and encourages their health and happiness.

To encourage employees to utilize benefits:

  1. Create incentives. Encourage employees to take advantage of their benefits. This could look like rewarding employees that take all of their paid time off or employees who regularly attend wellness events. 
  2. Get C-suite or managerial buy-in. Managers and executives should lead by example by prioritizing their wellbeing and mental health. They should be setting the culture of fostering happy and healthy employees. 
  3. Increase wellness program flexibility. Offering many shorter wellness programs instead of a few longer ones will allow employees to fit them better into their busy schedules. Offer virtual or hybrid events and programs.

employees and employers disagree on which benefits are most desirable.

As the American workforce becomes more diverse, employees’ needs and expectations have grown wider, leading to a disparity between employers’ and employees’ views on benefits. When employers cannot keep up with the expectations of their employees, workforce satisfaction rate declines. Our research shows that while 73% of employers believe their employees are satisfied with their benefit, employee-reported satisfaction lies at 67%. 

These disparities only become wider when we take into account marginalized communities. 

Employers seem to struggle to provide benefits seen as desirable, especially by already marginalized employee groups. 

Some potential solutions to bridge the gap include

  1. Seek/offer employee input. Conduct regular research and surveys to understand employees’ changing attitudes and needs and update benefits packages accordingly.
  2. Offer customized packages. Recognize and understand each diversity group’s unique needs and allow employees to select benefits based on their personal situations instead of a one-size fits all package. That way employees get what they want and employers aren’t paying for what employees don’t want. 
  3. Extend benefits to all employees. This can look like taking benefits universal by extending parental leave to men, fertility benefits to LGBTQ+ employees, etc. 

Employee benefits are usually not fodder for water-cooler talk. Honestly, it’s pretty hush-hush. But without these conversations and transparency on what people need to be effective and happy employees, nobody wins. With a new outlook and understanding on what people need today, everyone can play a part into making their workplace environment more diverse, inclusive, and enjoyable for everyone.

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