Are employees actually using the benefits you offer?

Posted March 21, 2017

By Ed Zalewski, PHR, editor, J. J. Keller & Associates

Of the top three benefits offered by employers (paid time off, retirement plans, and health plans), none are fully used by all employees. As an employer or a human resources department professional, you should be asking why.

Employees who decline to join your health plan probably either have other coverage or do not feel the need for insurance. For other benefits, however, participation or utilization rates could likely be higher.

For example, nearly every employee with paid time off (PTO) probably uses some of the time. However, many employees do not take all of their PTO every year. A 2015 survey by the US Travel Association found that the average employee fails to use five days of vacation each year.

Employees’ reasons for not taking PTO may range from concerns about catching up on work after vacation to feeling that PTO use is frowned upon. If employees are not using PTO, consider investigating the reasons. If the time goes unused, the PTO plan probably isn’t serving its purpose of encouraging work-life balance and increasing employee retention.

Identifying the reasons for underutilization of other benefits may also require some investigation. For example, studies indicate that nearly one-third of employees with access to a 401(k) plan do not participate. Also, fewer than 10 percent of employees use an employee assistance program (EAP), even though using an EAP has no cost to employees.

Some employers assume that more communication with employees will increase participation rates. However, communication won’t help if the information provided does not address the employees’ specific concerns.

If you’d like more employees to use your benefits, you’ll need to identify the reasons for non-participation. Employees may feel they can’t spare any cash to save for retirement, or may believe that taking PTO would negatively affect their promotion opportunities. Once you’ve identified the reasons employees aren’t using your benefits, you can address those specific concerns to hopefully increase participation.

About the author:

Ed Zalewski is a certified Professional in Human Resources and an editor at J. J. Keller & Associates, a nationally recognized compliance resource company that offers products and services to address the range of responsibilities held by human resources and corporate professionals. Zalewski specializes in employment law topics such as the Fair Labor Standards Act, employee benefits, and discrimination and harassment. He is the author of J. J. Keller’s FLSA Essentials guidance manual and BottomLine Benefits & Compensation newsletter. For more information, visit www.jjkeller.com/hr. View Ed’s LinkedIn profile.