Is there such a thing as too many benefits?

There is such a thing as too many employee benefits. That may sound surprising — like telling a young child there’s such a thing as too much ice cream. It sounds untrue, until the stomachache hits.

Are you spending on the right benefits?

Benefits leaders have launched countless new initiatives and benefits in the past two years. And it raises questions: Did companies go too far during the pandemic? Should companies pull back and offer fewer choices? Did they offer too much ice cream and not enough of the other food groups?

If you’re not thinking carefully about what you offer, you run the risk of unneeded spending on benefits that will go unused. Here are three ways to think about what you are offering, and where you might be able to cut back.

Focus on the most popular benefits first

People are pretty consistent when it comes to what health benefits they want from their job. In 2017, Harvard Business Review surveyed 2,000 job seekers about which benefits they valued the most. The benefits the survey participants put at the top of their lists were relatively straightforward: better health, dental, and vision insurance, followed by more flexible hours and additional vacation time.

At the bottom of the list were benefits that sound great on paper but often didn’t get used. These included an on-site gym and free fitness or yoga classes. These may be nice to have, but workers didn’t indicate they were as necessary.

But what do employees mean by “better” when it comes to insurance? A survey the following year helps fill in the blanks. When asked what they liked the most about their health plans, employees listed comprehensiveness and affordability.

When asked what they liked the least, the overwhelming majority said costs.

Although healthcare needs have changed during the pandemic, the core of what your employees want from their healthcare benefits has not. They want affordable plans that cover their healthcare needs — not flashy gimmicks.

Communicate simply

People want healthcare plans they can afford. But they also want to know what benefits you are offering in a clear, straightforward way. Because even the best resources will go to waste if employees don’t know about them or pick the wrong choice during enrollment time.

Expanding your offerings may seem intuitive — more choices are better, right? But according to the Center for Retirement Research at Boston College, that’s not always true. It argues that a growing body of research finds that Americans “don’t understand the information they already have and are making bad decisions based on these misconceptions.” (To come back to the metaphor: 10 flavors of ice cream are great. 1,000 flavors are not so great.)

How can you as an employer help cut down the confusion?

Think about how you are communicating about your offerings to employees. Are you offering one-on-one meetings? Group classes? Do you reach out to them only during open enrollment or are you continuously educating them throughout the year? What can you do to reduce the amount of jargon that your communications use? You may also want to communicate about benefits like mental and financial health when employees go through key life events, like marriages or divorce, births and death, promotions, and so forth. The more targeted your communication can be to your employees’ needs, the better communication it is.

This is an area where employee surveys will go a long way. Ask workers what they need and whether or not they understand what’s offered. That will let leaders figure out what is working and allow managers to zero in on problems before they grow too large.

Experiment — and don’t be afraid to pivot

Does that mean that you shouldn’t experiment with new health benefit offerings? No, not at all. The pandemic has brought with it an explosion in new offerings — and that’s a good thing. As employees’ needs have changed, so too have what employers should be offerings.

In 2021, “39% percent of smaller firms and 58% of larger firms provided or expanded online counseling services for emotional or financial distress, relationship issues, or other stressful situations,” according to the Kaiser Family Foundation.

But whether these offerings will become a regular part of employer health benefits remains to be seen. As you experiment with new benefits, it’s important to regularly measure how much employees are using them and their degree of satisfaction with them. As you experiment with health plan offerings, it’s important to use analytics to determine what is working and what isn’t. If nobody is buying scoops of spumoni, maybe it’s time to take it off the menu.

Offer the benefits that will keep your employees happy

To have a fighting chance in the ongoing war for talent, you need to be offering strong employee healthcare benefits. But you can’t afford to waste resources on options that employees don’t understand or don’t want to use. By focusing on the most popular offerings, communicating regularly and clearly, and embracing new experiments, you’ll put yourself in a good position to attract and retain talented employees.

Now if you’ll pardon us, we need to eat some ice cream.

Jennifer Jones, MSM RD, is population health practice Leader at Springbuk and an experienced health care professional with a background in clinical dietetics, wellness programming, and employer health. With over 20 years of experience, she has worked in various settings, including health care systems, occupational health organizations, and health and welfare benefits advisory firms.