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Effective Communication
November 2005

An Employers’ Most Valuable Tool
By Christopher Beach

Communication. Open and healthy, I understand what you are telling me, and likewise you are receiving what I am sending. Everyone is on the same page. Life flows in this lane. Easily, efficiently. Hard to do. But something all of us do every day, but not always optimally. As an engineer, communication should be fairly simple. You input the variables into a formula and the output is clear. But the dynamics of interpersonal communication is not that straightforward. What are the variables? What formula are you using? For every employee, both the variable and the formula are different. In communication, the old adage that practice makes perfect doesn’t seem to fly, often we may just be repeating the same murky communication skills.

In every level of society, in every relationship between humans whether between spouses, parent and child, co-workers, company management and employees clear communication is the Holy Grail – that which makes relationships work or don’t work. When communication is poor the results are clearly obvious even if the causes remain obscure according to two recent studies done by MetLife and Watson Wyatt on Employee benefit trends and US workers. What they concluded is companies need do a more effective job. They need to communicate more clearly to their employees the full amplitude of what they’re getting in their employee benefit package. Companies who communicate clearly, the studies conclude, have a higher level of return on employee satisfaction levels.

The studies’ conclusions were so riveting to me – as to the wide gap between the perceptions of employers and their employees – I undertook the task of determining if what was found on a national level would also be found here in Virginia. What my approach lacked scientifically speaking, anecdotally bore out the studies’ conclusions. Incredibly, companies who offered a “bells and whistles” Employee Benefit Package were often seen as lacking while others who offered less or an average plan but communicated well, scored better. That companies have to do a better job of communicating as the studies concluded, was certainly demonstrated by a client whose employee was totally dismayed when he realized, “I thought I had Chiropractic coverage included with my health plan!” I leave to your imagination of how this misinformation or lack of communication might have impacted his perception of his employer and the employer’s plan.

The most riveting finding reported that 28% percent of those surveyed have the perception that their employer spends less than $1,000 annually on health insurance, while half believed that figure to be less than $2,000. When I asked an employee of a well known engineering firm how much he thought his employer spent on behalf of his family’s health plan, he replied, “I have no idea”.

That’s a crushing realization when the average employer spends around $7200 annually on family coverage. It’s a worse eye-opening experience when in today’s workplace, the cost of providing health insurance has risen at least twelve (12%) percent per year. Even at a minimum level, it is three (3) times the rate of inflation in our country. Many companies have been forced to pass on the increase, reduce the benefits or do both! If an employer properly communicated that in fact, on average, that they spent over $3,000 for single coverage and $7,000 for family coverage, then the employee will have a sense of cooperative ownership and will perceive their employer is looking out for them. What has also been discovered is that companies unsuccessful at controlling their health care budgets, as a share of the total compensation, have a higher turnover rate among employees who are considered key or top performers.

Again, communication is everything because perception, not facts rule the world.

Is there a pattern here? Possibly. With so many financial concerns that employees face, coupled with the perceptions that their employer is not doing much to help them, we are looking at half of our workforce who is either distracted or disgruntled and most likely not productive. Such employees are more likely to be looking for the next best thing or employer. Evaluating the cost of finding, hiring and training new employees, an employer’s money would be better spent in finding ways to retain their workforce. For Kevin Kokal of Alliance Engineering, doing so is of prime importance. “I am genuinely concerned about the employees’ health overall and about my employee’s personal life. I want my health plan to attract and retain people. Our number one tool is our reputation. We are known for our integrity.”

Understanding your employees is one step on the path to keeping them happy and productive. For a moment step into your employees’ shoes to better understand their daily challenges. Another interesting fact, which both studies surprisingly tell us, is that 71% of your employees, on average, are worried about paying the bills during a period of sudden income loss. Breaking out the numbers, 82% of the female workforce place that as their number one concern. And I ask you, what does worry and stress of such magnitude do to your employees? Perhaps contributes to increased incidents of accidents, mistakes and doctor visits?

Is there a better approach? Yes. COMMUNICATION. Clear, concise, speaking to the employees’ concerns. If you do this, you as the employer are going to be viewed as more involved by your employees.

As an employer, here is how to do it:

1. Don’t wait until the open enrollment period. The studies show that when your annual enrollment period comes around, 57% spend less than 30 minutes considering their options for the coming year. At Delta Airport Consultants, however, the average employee will spend at least 90 to 120 minutes on examining their options for the coming year. And they do not go through this process alone. Each employee will have the opportunity to spend time with a Financial Planner. If more assistance is needed, they are encouraged to take advantage of other resources that are available. Their employees are educated by Benefit Consultants and Financial Planners as to how each benefit decision will impact their future and their goals. This is very interactive. At Alliance Engineering, time is spent educating their employees on the dynamics of the costs associated with their employee benefit plan. These approaches will take the employer and place them in position of being on the same side of the employee, valuing what the employee provides to the company. The MetLife survey has revealed that “almost half (43%) of all employees would like their employer to provide them with access to a financial planner to help make decisions about how to invest their 401(k) money. Typically, employing this practice comes at a minimal cost, but the return is far greater, namely, increased employee loyalty.

Again, communication.

2. At a minimum, utilize a payroll stuffer/ insert – at least on a quarterly basis – highlighting where and how to get information on their benefits. Depending on the size of your firm, your approach will vary. A smaller firm typically has an easier job of relaying this information to their employees because of more regular interaction between the owners/ managers and staff, but once growth occurs, it becomes more challenging. All firms can use this simple approach of communication, giving employees’ information on their benefits on a continuous basis.

3. Consider a dedicated intranet/ internet system that enables employees to receive updates and information that is “pushed” to them by the Human Resources department if your firm has reached this stage of growth. With such a service, the employee and/or spouse can log in which usually leads to further research as a properly designed site will highlight other areas of interest, much like a search on Yahoo, Amazon or Google will suggest other areas or topics “of interest”.

4. Perhaps the most effective tool available is the “Total Compensation Statements”. These statements are customized for each employee using hard data taken directly from your company. Not only can these statements show the cost of the individual employees’ health plan, but it can highlight the payroll taxes paid on their behalf by your firm. Most employees are quite surprised when they find out what they are truly earning and that they see it in black and white.

Communication is the most valuable tool that you have available as an employer. If done properly, the cost of your providing benefits to your employees can become an effective tool in increasing productivity, happiness and loyalty. In order to implement a program, review what you are currently doing and add these tools in steps, so that it is not overwhelming to you and the employee. Use a payroll stuffer/ insert to start the flow of information. Then use that same tool to create awareness of the other tools that you will be adding in stages. Communications is a formula that occurs in stages, and if done properly, it will be communicated back to you positively.

About the Author

Christopher J. Beach, President of Richmond, VA based Beach Benefits Group, Ltd., has over a decade of experience and involvement in Employer Based Benefits programs for companies headquartered in Virginia, North Carolina, Tennessee, Maryland, and Texas. His firm specializes in engineering company practices to better understand and provide Compliance Oversight, Benefit Plan Designs, and unique approaches to improve marketability of clients to prospective employees and the retention of current employees. Mr. Beach currently serves as a Director at Large of the Central Virginia Association of Health Underwriters, and is available for consultation for both public and private firms regarding employer/employee benefit issues. Company information is available at Mr. Beach can be reached directly at 877.634.7296, or via email at

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