Benefits Communication More Important Than Actual Benefits, Study Shows

February 23, 2005 ( - Words are stronger than deeds when it comes to health benefits, it seems.

According to a Watson Wyatt survey, employers who offer rich health benefits packages but have poor communication strategies about the benefits see an average turnover rate of 17% for top-performing employees. Those employers with less costly benefits and an effective communication strategy have a turnover rate of 12%, according to a press release from the company. The human capital consulting firm suggests that supplementing a rich benefits practice with a good communication strategy can lower turnover to 8%.

Employee satisfaction is also tied to communications, according to another Watson Wyatt poll. Only 22% of employees at firms with poor communications and rich benefits program are satisfied with their package; conversely, 76% of employees at firms with less rich benefits but good communications are satisfied.

“The results really drive home the fact that effective communication is vital for employers if they want to see returns on their health benefit investments and retain top talent,” said Kathryn Yates, global director of communication consulting at Watson Wyatt, in the press release. “Employers can spend huge sums of money on benefits, but if their employees aren’t aware of the cost or don’t appreciate the value of the benefits, they aren’t going to see a return on their investment.”

The survey also found that companies that fail to control rising health care costs see a higher turnover in top-performing employees. Among the companies whose health costs top 14% of total compensation, the average turnover rate is 12.5%. For those companies with less than 10% of compensation going towards health care costs, the average turnover is 8.8%. The average health care expenditure for the average company is the survey was 11% of total compensation costs.

Watson Wyatt ( ) is a human capital consulting firm working in the benefits and human capital strategies areas.