Employer Communication Critical During Economy Crisis

As employees continue to struggle with the effects of the current economic crisis and how it will impact their own families, the resulting stress is having a significantly negative impact on their production at work. In fact, a recent poll conducted by Raleigh-based Workplace Options indicated that nearly half of surveyed employees have become less productive at work as a result of the financial stress. Additionally, many employers are experiencing serious employee morale issues resulting from fears about unemployment or other cutbacks. Others experience a lack of loyalty among employees who believe their jobs are not secure and believe they can find opportunities elsewhere. However, employers can address most of these issues through a dedicated and effective communication program.

During times of crises, the right employer communication can help ease stress, build loyalty and maintain positive staff morale. According to a recent report from Watson Wyatt Worldwide, most employees consider communication as the second-most important employer characteristic, behind strategic direction & leadership. However, Practice Leader Richard Guinn suggests that most employers either provide too much or too little information during a crisis. In a recent article on employer crisis communication, Guinn outlines several considerations for executives to consider when providing information, but the key is simply to listen to the needs of the employees and respond. Employers should also provide resources such as personal financial education programs and Employee Assistance Programs (EAPs) to help workers who are craving reassurance in these tough financial times.

Communicating Benefit Value Can Pay Dividends
One particular tactic that can help ease staff anxiety about the current economic situation and help them feel more appreciated is educating on the value of their benefit plan. While benefit plan investments may be obvious to most executives, studies show that most employees fail to realize what their benefits are worth or to what extent their employer subsidizes those benefits. When an employer can communicate that a package with such things as medical and dental benefits, employer-paid life insurance, 401(k) matches, tuition reimbursements, social security contributions and paid time off often equals up to one-third of an employee’s salary, the effects on employee morale can increase drastically. In addition, as more studies have shown that benefit value education directly correlates to higher employee satisfaction, such programs also help in retaining talent that might otherwise be looking for a change in employment.

The problem for most employers, however, is actually communicating this value. Calculating and conveying the total benefit contribution made to each employee can be a daunting, and often impossible, task for employers whose HR departments are already overtaxed with personnel issues. Fortunately, there are viable solutions available – and most can be facilitated with the help of an employee benefits consultant that specializes in benefit plan communications. Some employers have found the use of personalized benefit statements (or “hidden paychecks”) as a reliable means to get the message across to workers. Others use special presentations at enrollment or customized educational pieces throughout the year. All of these solutions can be implemented with ease and at little or no cost to the employer.

Staying Ahead of the Curve
There is plenty of bad news surrounding our economy these days, and employees are constantly bombarded by it. One of the most important things that any employer can do is take the time to be proactive and communicate with employees. Whether it is conveying benefit value or just informing employees of the company’s current financial status, any communication will go a long way toward building trust, loyalty and a more productive workforce.

For more information on this topic, please click on the following links…

Employee Stress Over Economy Puts Firms’ Employee Communication Efforts to the Test

Communicating the Value of Benefits Helps Offset Anxiety of Tough Economic Times

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Important Notice: Hill, Chesson & Woody does not engage in the practice of law, accounting, or medicine. Therefore, the contents of this communication should not be regarded as a substitute for legal, tax, or medical advice.

January 16, 2009

Hill, Chesson & Woody strives to keep our clients' group decision makers abreast of trends influencing the employee benefits market. Look for Eyes on Benefits to bring you news and information affecting you and your employees.

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