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How to Improve Employee Benefit Utilization

4 tips to help employees better take advantage of their benefits

Published 3.16.2023


Updated 1.10.2024

For HR teams who work hard to develop robust benefits packages, seeing a low employee utilization rate across the offerings can be disheartening. These are great benefits! Why aren’t more people using them? Benefit utilization rates remain notoriously low. One study report by Chestnut Global Partners found that less than 7% of employees fully utilize their EAP benefits offered by their employers. Here’s the other thing: benefits are costly—whether or not employees use them. According to a 2019 report by the Bureau of Labor Statistics, employee benefits in the U.S. make up 31% of total compensation costs.Benefits are complex, and it's easy to put off in the hustle of everyday life. Often employees fail to take advantage of employee benefits because they don’t know they exist or don’t know enough about their features. Just 19% of employers say their employees have a high level of understanding of their benefits.

Here are 4 tips to help employees better take advantage of their benefits

1. Communicate with the right words and at the right time

Benefit teams know the ins and outs of complex employee benefits offerings and can engage with the vocabulary used to have these conversations. Words like equity, vesting, deductible, HSA/FSAs come easily to the pros.Employees, not so much.Part of helping your workforce take advantage of their employee benefits means communicating the perks to them in plain language. If you’re struggling to get out of the legalese, work with the communications team at your company to craft explanations in everyday language.Once you’ve developed a jargon-free communications plan that breaks down benefits into easy-to-understand language, share the information with employees at key moments. A 2016/2017 report found almost 70% of employees want to hear about benefits at big life stages, like starting a family or buying a home, but only 46% of employers have plans in place to engage with employees during these moments. Benefits professionals and HR leaders can use third-party predictive modeling to target employees at key life moments in a way that keeps employee data safe and secure while providing relevant benefits information.

2. Get more champions on board

For greater employee benefits utilization, get more champions on board. Work with your organizations' other departments to spread the word about offerings and raise employee awareness. Try targeting functions based on their role in the organization and sharing a clear value proposition. For example, work with diversity teams to educate employees on fertility benefits and employee assistance programs (EAPs). Ensure recruiters understand which benefits are most likely to appeal to employees at different life stages. Educate mid-level managers on the highlights and talking points of what your company offers for benefits, so they can connect with individuals during one-on-ones and share information more broadly during team meetings.

3. Use a financial wellness program that maximizes total rewards

A lot of the benefits companies offer today impact an employee’s financial picture, like 529 plans, HSAs, 401(k), stock options, and various healthcare and dental plans. These can significantly impact employee financial health but are easily forgotten in the stress of everyday work and home life.With Certified Financial Planner™ professionals to steer employees toward smart financial moves, a holistic financial wellness benefit can help you increase employee benefits utilization of other benefits. Take the education company Udemy, for example. As employees began working with Origin's financial planner professionals, employee 401(k) contributions across the company went up. Origin financial planners were able to work 1-on-1 with employees to explain the benefits of their employer-sponsored 401(k) match, encouraging them to make the most of this previously underutilized benefit.

4. Survey employees and ask for feedback

Surveys can help you understand how employees feel about current offerings and help you get a pulse on what they’d like to see in the future. Surveys also help HR and benefits teams understand what benefits appeal to whom—a gold mine of data to help you attract talent in the future. A mid-career professional starting a family will have different priorities for benefits than an entry-level grad who is concerned about paying down student debt. An individual nearing retirement will have different needs than both. Conduct surveys that ask specific questions about currently offered benefits. When it comes time to ask about potential future benefits, be as specific as possible. For example, if you’d like to provide a financial benefit, include details like a “financial wellness program with access to 1-on-1 financial planning, tax guidance and preparation, and automatic savings and investing.” This provides a more vivid example of the benefits than simply asking employees if they’d like a financial benefit.