SHRM Survey Findings: Employee Benefits in California—Communicating Benefits

April 23, 2014

Introduction

• This is part six of a series of SHRM survey findings examining employee benefits in the workplace of California organizations. • The following topics are included in the six-part series titled Employee Benefits in California: » » » » » » Part 1: Wellness initiatives Part 2: Flexible work arrangements Part 3: Health care Part 4: Leveraging benefits to retain employees Part 5: Leveraging benefits to recruit employees Part 6: Communicating benefits Employee Benefits in California —Communicating Benefits ©SHRM 2014 2

Key Findings California

• How knowledgeable are employees about their employer-sponsored benefits?

The majority (80%) of California organizations reported their employees were “very knowledgeable” or “somewhat knowledgeable” of the employer-sponsored benefits available to them. • Are organizations effective in informing employees about their benefits?

communications budget in fiscal year 2012. Roughly three-fourths (79%) of organizations “strongly agree” or “somewhat agree” with the statement, “My organization’s employee benefits communications efforts are very effective in informing employees about their benefits.” However, only about one-fifth (22%) of organizations had an employee benefits • What are the top employee benefits communications methods organizations use? The top three communications methods used by organizations in California are online or paper enrollment materials (83%), group employee benefits communications with an organizational representative (64%) and one-to-one employee benefits counseling with an organizational representative (50%).

• Are organizations using social media as a platform in their employee benefits communications efforts? social media within the next 12 months (both in California and nationally).

Very few organizations use social media in their communication efforts. Overall, 2% of California organizations reported using social media. Among organizations not using social media in their employee benefits communications efforts, 8% of organizations indicated they plan to start using Employee Benefits in California —Communicating Benefits ©SHRM 2014 3

What do these findings mean for the HR profession?

• In this post-recession period of slow salary growth, some employers and HR professionals are using comprehensive benefits packages as a means to attract and retain talent. Consequently, clear communication about benefits has become important. Most HR professionals think their benefits communications are effective, but less than one in four (22% in California, 24% nationally) had an actual benefits communications budget.

• HR professionals have likely spent much time navigating the ins and outs of the Patient Protection and Affordable Care Act (PPACA). Given the complexity of the law, HR professionals should pay particular attention to health care-related benefits communications for the foreseeable future. Although some employers may choose to opt out of coverage and pay a penalty, some experts have argued that decision will have a negative impact on recruitment and retention. HR professionals appear to be aware of this. More than four in five respondents (81% in California and nationally) said health care is the most important benefit to the majority of their employees.

• Most organizations in California and nationally are not using social media channels for benefits related communications. However, that may change in the future, perhaps due to employers’ increased use of social media in other aspects of business operations, as well as workers’ increased comfort with those forms of technology.

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Focus and Knowledge of Benefits

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Overall, how knowledgeable are your employees about the employer sponsored benefits available to them? Very knowledgeable Somewhat knowledgeable Not very knowledgeable Not at all knowledgeable 1% 0% 16% 13% 18% 19% 64% 67% California (n = 365) Overall (n = 429)

Note: Respondents who answered “not sure” were excluded from this analysis. Percentages may not equal 100% due to rounding.

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How does your organization determine the knowledge level of employees about the employer-sponsored benefits available to them?

Employee surveys Intranet use Employee focus group Employee meetings* Log of question volume and/or type* Other 13% 13% 7% 10% 6% 9% 5% 3% 9% 7% 27% 24% California (n = 373) Overall (n = 441)

Note: Percentages do not equal 100% due to multiple response options. An asterisk (*) indicates that this response option was developed from open-ended responses.

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Which benefit from your organization’s benefits package is the one most important to the majority (more than half) of employees? Health care Flexible working benefits Retirement savings and planning Leave benefits Family-friendly benefits Preventive health and wellness Professional and career development benefits Housing and relocation benefits Other

California (n = 355)

81% 5% 4% 3% 3% 3% 2% 0% 1%

Overall (n = 423)

81% 4% 5% 3% 3% 2% 1% 0% 1%

Note: Respondents who answered “not sure” were excluded from this analysis. Percentages may not equal 100% due to rounding.

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In three to five years, which benefit from your organization’s benefits package do you think will be the one most important to your employees?

Health care Retirement savings and planning Family-friendly benefits Flexible working benefits Preventive health and wellness Professional and career development benefits Housing and relocation benefits Leave benefits Other

California (n = 355)

65% 10% 7% 6% 5% 5% 1% <1% <1%

Overall (n = 418)

67% 11% 6% 7% 6% 1% 0% 1% 0%

Note: Respondents who answered “not sure” were excluded from this analysis. Percentages may not equal 100% due to rounding.

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Communicating Benefits

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How strongly do you agree or disagree with this statement, “My organization’s employee benefits communications efforts are very effective in informing employees about their benefits.” Strongly agree 17% 24% Somewhat agree Somewhat disagree Strongly disagree 5% 6% 16% 15% 55% 62% California (n = 354) Overall (n = 426)

Note: Respondents who answered “not sure” were excluded from this analysis.

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Did your organization have an employee benefits communications budget in fiscal year 2012?

Yes No 22% 24% California (n = 299) Overall (n = 360) 78% 76%

Note: Respondents who answered “not sure” were excluded from this analysis.

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Did your organization’s fiscal year 2013 employee benefits communications budget increase, remain the same or decrease when compared with the fiscal year 2012 employee benefits communications budget? Increased in 2013 Remained the same in 2013 Decreased in 2013 2% 8% There is no budget in 2013 0% 4% 28% 40% 58% 60% California (n = 65) Overall (n = 85)

Note: Only respondents whose organizations had an employee benefits communication budget in fiscal year 2012 were asked this question.

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Within the last 12 months, did your organization make any changes to your employee benefits communication materials? Yes No 43% 42% 57% 58% California (n = 341) Overall (n = 410)

Note: Respondents who answered “not sure” were excluded from this analysis.

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Which of the following employee benefits communications methods does your organization use?

Enrollment materials (online or paper) Group employee benefits communications with an organizational representative One-to-one employee benefits counseling with an organizational representative Intranet Direct mail to home/residence Newsletters (online or paper) Benefit fairs Virtual education Social media Other

California (n = 361)

83% 64% 50% 44% 32% 30% 27% 18% 2% 9%

Overall (n = 431)

82% 62% 55% 46% 33% 34% 24% 14% 3% 9%

Note: Respondents who answered “not sure” were excluded from this analysis. Percentages do not total 100% due to multiple response options.

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Within the next 12 months, does your organization plan to using social media as an employee benefits communications tool?

Yes No Not sure 8% 8% 33% 34% 59% 57% California (n = 353) Overall (n = 416)

Note: Only organizations that currently do not use social media as an employee benefits communications method were asked this question. Percentages may not total 100% due to rounding.

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Demographics

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Demographics: Organization Staff Size 1 to 99 employees 31% 100 to 499 employees 36% 500 to 2,499 employees 2,500 to 24,999 employees 25,000 or more employees n = 310 5% 10% 18% Employee Benefits in California—Communicating Benefits ©SHRM 2014 18

Demographics: Organization Sector Privately owned for-profit Nonprofit organization Publicly owned for-profit Government sector Other 2% 7% 13% 19% 60% Note: n = 322. Percentages do not equal 100% due to rounding.

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Demographics: Organization Industry Professional, scientific and technical services Health care and social assistance Manufacturing Finance and insurance Government agencies Educational services Transportation and warehousing Retail trade Whole trade Real estate and rental and leasing Accommodation and food services Administrative and support and waste management and remediation services Construction Information Utilities Religious, grantmaking, civic, professional and similar organizations Mining Arts, entertainment and recreation Repair and maintenance Agriculture, forestry, fishing and hunting Personal and laundry services Other Note: n = 328. Percentages do not equal 100% due to multiple response options.

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Percentage

24% 13% 12% 10% 8% 8% 7% 3% 2% 2% 2% 2% 1% 9% 7% 6% 5% 4% 4% 4% 4% 4% 20

Demographics: Other Does your organization have U.S.-based operations (business units) only, or does it operate multinationally?

U.S.-based operations only Multinational operations n = 324 79% 21% What is the HR department/function for which you responded throughout this survey?

Corporate (company-wide) 78% Business unit/division 15% Facility/location 16% Note: n = 234. Percentages do not equal 100% due to rounding.

Is your organization a single-unit organization or a multi-unit organization?

Single-unit organization: An organization in which the location and the organization are one and the same.

30% Multi-unit organization: An organization that has more than one location.

70% For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both?

Multi-unit headquarters determines HR policies and practices.

59% Each work location determines HR policies and practices.

A combination of both the work location and the multi-unit headquarters determines HR policies and practices.

rounding. 5% 37% Employee Benefits in California—Communicating Benefits ©SHRM 2014 21

SHRM Survey Findings: Employee Benefits in California—Wellness Initiatives Survey Methodology

• • Response rate = 13% 373 HR professional respondents in California organizations from a randomly selected sample of SHRM’s membership participated in this survey • • Margin of error +/- 5% Survey fielded May 3 - June 7, 2013 Employee Benefits in California—Communicating Benefits ©SHRM 2014 22

Additional SHRM Resources

• Benefits Communication Resource Page • Open Enrollment Resource Page • Managing Medical Leave in California • Communicating with Employees About Health Care Benefits Under the Affordable Care Act Employee Benefits in California—Communicating Benefits ©SHRM 2014 23

About SHRM Research

• For more survey/poll findings, visit www.shrm.org/surveys • For more information about SHRM’s Customized Research Services, visit www.shrm.org/customizedresearch • Follow us on Twitter @SHRM_Research Project leaders: Christina Lee, researcher, SHRM Research Yan Dong, SHRM Research Project contributors: Alexander Alonso, Ph.D., SPHR, vice president, SHRM Research Evren Esen, director, Survey Research Center, SHRM Research Copy editor: Katya Scanlan, SHRM Knowledge Center Employee Benefits in California—Communicating Benefits ©SHRM 2014 24

About SHRM

Founded in 1948, the Society for Human Resource Management (SHRM) is the world’s largest HR membership organization devoted to human resource management. Representing more than 275,000 members in over 160 countries, the Society is the leading provider of resources to serve the needs of HR professionals and advance the professional practice of human resource management. SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. Visit us at shrm.org

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