international business unit VI Article Critique and DQ question

benefits magazine march 201634

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Branding Benef its:

By thinking of employee benefits as products, HR

professionals may be able to use marketing techniques to

“sell” employees on taking advantage of them.

by | Cindi Van Meir

Apply the Four Ps of Marketing to Make Benefits More Engaging

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W ith four out of five em- ployees basing their job decisions on nonsalary factors,1 employers in-

creasingly view benefits as a powerful weapon to help them win the war for top talent in a tightening job market.

At the same time, because of health care cost increases and spurred on by the Affordable Care Act (ACA), em- ployer-sponsored health care is experi- encing a dramatic shift toward a more consumer-driven model, in which em- ployees are being asked to take greater responsibility for their health care costs.

Employers want employees to have a positive, loyalty-inspiring relation- ship with their benefit program—to understand and appreciate the value benefits provide. And in communicat- ing that value, human resources (HR) professionals no longer can assume a traditional approach will work. It’s time to get creative. That’s where marketing can help.

The Four Ps of Marketing Marketers create brand buy-in and

loyalty by determining the appropriate mix of what are known as the four Ps of marketing: product, price, promo-

tion and placement. If each element is executed properly, the customer will clearly see the value in the offering and be perfectly willing to pay for it.

In terms of consumerism when it comes to corporate benefit programs, the employee represents the consumer and the employer represents the brand. The employee provides the employer with labor and, in return, receives cost-effective access to various means of protecting personal health and wealth—also known as benefits. Just as with any other consumer good or ser- vice, no perceived value means no buy- in: If the employee is dissatisfied, he or she most likely will look elsewhere to an employer that better meets his or her needs.

By applying the four Ps of market- ing, HR professionals can turn their benefit program into an engaging brand to which employees can look to address their needs, giving a lift to at- traction and retention efforts.

Product

First things first, what are we selling? Just as a market research team helps determine what products to offer based on what consumers want and need, HR

professionals need to determine which benefits to offer to employees.

In marketing, this is accomplished through research, including using sur- veys, focus groups and demographic analysis. The goal is to answer ques- tions like: Who makes up our audience? What challenges are they facing? What solutions are they looking for? Once marketers have this information, they have a more complete picture of what will satisfy consumer demands and are better equipped to make product deci- sions.

A similar approach can and should be taken with benefits. In this new era of health care consumerism, it’s impor- tant for HR professionals to recognize that benefits are not one size fits all. A company’s workforce is a unique mix of different ethnicities, generations and socioeconomic statuses, and the benefits program should reflect that with an equally unique mix of prod- ucts and programs that addresses the varied needs of the employee popula- tion. Achieving the right mix requires HR professionals to take on the role of researcher and ask the same types of questions as their marketing counter- parts.

E-mail or a free tool like Survey- Monkey easily can be used to create and distribute a survey to gain perspec- tive on which benefits employees pre- fer. Beyond that, HR professionals can draw deep insight from examining how current benefits are being used across the workforce. Data analytics tools can track benefit plan utilization and gen- erate digestible reports that shed light on how employees are managing their health throughout the plan year. This information can help identify potential coverage gaps that can be addressed

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through changes to plan design and result in a benefit offer- ing tailored to fit employee needs.

But the research can’t stop there. When making product decisions, marketers must also consider their competition and develop a product that’s more appealing to their target audience. Likewise, HR professionals should know what competitors for talent are offering. As mentioned, every em- ployee population is unique and coverage needs vary, but companies can differentiate themselves from others in their industry by exploring new and innovative benefits to add to the package, such as pet insurance, floating holidays and tele- medicine services (more on this later).

Price

A good product won’t go far if people aren’t willing to pay for it, which is why marketers devote a significant amount of time to pricing. If HR wants employees to take full advantage of the benefits offering, the price must be right.

In the benefits world, rising health care costs—along with ACA and the looming threat of the Cadillac tax on high-value health plans—are compelling most employers to find ways to cut spending on health insurance. Many organizations are shifting more of the financial burden onto employees in the form of high-deductible health plans (HDHPs) (i.e., greater out-of-pocket costs). While this may make sense for the em- ployer’s bottom line, it also introduces a potentially significant coverage gap for employees, many of whom are not prepared to take on unexpected medical expenses. An estimated 49% of Americans have less than $1,000 to pay for unexpected out- of-pocket medical expenses, and 53% would borrow from their 401(k) or credit cards to cover such costs.2 Medical debt accounts for a majority of the bankruptcies in the U.S.

If employers want to reduce spending without leaving their workforce high and dry, they may need to offer greater choice and greater value in their benefit packages, and em- ployees may demand it. Voluntary benefits can bridge the gap in coverage created by the move to higher out-of-pocket costs, helping employees enjoy lower premiums while pro- tecting their health and income. Traditional voluntary prod- ucts have included short-term disability, critical illness and life insurance policies. But employees may be able to build a stronger financial safety net through nontraditional volun- tary benefits such as financial planning and education, pet insurance, legal plans and identity theft protection. An in- creasingly popular addition to the benefits mix are telemedi-

cine services, which allow employees to receive basic prima- ry care treatment virtually and for a fraction of the cost of an in-person visit to a doctor’s office.

It’s important that employers design health plans to fit their budgetary goals. But if employees can’t afford the plans, then they stop being a benefit and start being a hindrance to retention. Properly integrated into the program, volun- tary benefits provide low-cost, easy-to-implement options that can help employees get the protection they need without breaking the bank.

Promotion

A product could be the most useful, most affordable avail- able, but if people don’t know about it or don’t understand it, it’s not really worth all that much. Marketers, of course, have a deep appreciation of this concept, and the greatest portion of their efforts—and their budgets—typically focuses on get- ting the word out. HR professionals need not spend as much money, but they should be thoughtful about how they com- municate their benefits package to the workforce.

Benefits have always been difficult for the average em- ployee to fully understand, but recent developments in health care have introduced numerous new challenges. As companies adapt their benefits strategy to comply with ACA and combat rising costs, workers must now wrap their heads around concepts like HDHPs, health savings accounts and much more. They need more than the traditional booklet outlining copays and deductibles; they need education on these new elements and insight into what the changes mean for them.

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takeaways •  An employee who doesn’t perceive value from employee benefits

may look elsewhere for an employer that meets his or her needs.

•  HR professionals working to determine the right mix of benefits can survey employees and use data analytics to examine how cur- rent benefits are used; they also should know what the competi- tion for talent is offering.

•  If employees can’t afford the benefits that are offered, those benefits may actually become a disincentive to remain with the employer.

•  Benefits can be complicated, and employees need a simple, conve- nient and engaging way to learn about them.

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To avoid confusion that can lead to poor decision mak- ing at enrollment time, HR needs a communication plan that gives employees a simple, convenient and engaging way to inform and prepare themselves.

Most organizations believe they communicate benefits ef- fectively, but only one out of five employees thinks that’s the case.3 One explanation for this disparity could be that most employers seem to ignore the fact that not every employee communicates the same way. Despite the unprecedented lev- el of diversity in today’s workforce, nearly 90% of HR profes- sionals say they do not tailor their benefit communications for specific groups of employees.4

Just as marketers segment their audience and use differ- ent media to deliver their message to consumers, HR profes- sionals should consider a variety of communication styles and channels to reach employees. By making the message avail- able in multiple formats, HR can engage workers the way they want to be engaged. For instance, baby boomers may appreci- ate verbal, face-to-face communication about changes to their benefits, while Millennials may prefer e-mail, text messages or videos. There are also many cases in which the spouse, not the employee, is the actual decision maker. HR profession- als need to know to whom they’re talking. This is another ex- ample of when gathering employee input can be very helpful.

And as for the message itself, online benefits communi- cation portals enable HR professionals to easily personalize employee communications based on demographics and oth- er data. After identifying the specific information an individ- ual needs, they can send a tailored message that will resonate

on a personal level, driving engagement and more confident benefit decisions.

But it goes beyond simply communicating different ben- efit plans for annual enrollment. Putting benefits in the con- text of total compensation and making information readily available throughout the year also encourage greater loyalty. Employees have a clearer picture of how their employer is taking care of them—a very good thing for brand loyalty.

Placement

Once marketers have let their audience know about a product, they must make sure consumers have ready ac- cess to it. Convenience is king in the land of placement. If the buying process is too complicated, consumers likely will lose patience and move on. Worse yet, if a confusing buying process leads them to buy the wrong product, it leaves them disappointed and tarnishes the brand. While most employ- ees don’t have the immediate option to walk away from their benefits, a difficult enrollment experience eventually can have serious repercussions for an employer.

As employees take more ownership of their health care, they may need guidance to make smart benefit decisions. Employees who make a choice that doesn’t fit their individu- al needs could find themselves in a shaky financial situation, which increases the likelihood of stress (negatively impact- ing job performance) or even skipped treatments (leading to all sorts of undesirable outcomes). Employees could blame their employer for inadequate coverage, and that would not bode well for retention.

The answer is to provide resources that make it easy for employees to identify the coverage they need. Consumer- centric benefits enrollment technology—featuring mobile device access, step-by-step navigation, plan comparison and other decision-support tools—can give employees an experi- ence similar to that of shopping with popular online retailers like Amazon or eBay. Voluntary benefits can be integrated into the workflow, alongside traditional benefits, with clues that let employees see how each benefit complements the other. Through such simplicity and convenience, HR profes- sionals can deliver a positive brand experience and help em- ployees successfully navigate an otherwise complex process.

Benefits may never be considered fun, but they don’t have to be painful. Employees shouldn’t dread open enrollment or think it’s too much trouble to figure out which plans can benefit them the most.

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Cindi Van Meir is the product marketing manager at Benefitfocus, where she led the cross-functional teams that designed and developed the BENEFITFOCUS® Marketplace.

Previously, Van Meir held positions in sales and marketing at Trelleborg AB and Samsung Opto- Electronics America Inc. She is a frequent guest speaker on topics such as benefits administration, multigenerational workforces and multicultural workplaces. Van Meir holds a bachelor’s degree from William Paterson University of New Jersey.

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In Summary Marketing works. Since 1960, companies around the

globe have used the four Ps to get people to see the value in their products and become loyal customers. What is a mod- ern benefits program but a product whose perceived value can influence employee loyalty?

As the war for talent continues to escalate and a tech- savvy talent pool looks for companies that can provide a pos- itive work culture as much as career advancement, employers need more ammunition. The four Ps of marketing represent a time-tested approach that can increase the effectiveness of benefits management efforts.

Endnotes

1. Benefits Buyers Study: New Perspectives on Balancing Employer Costs and Employee Protection, Unum, 2015, available at www.unum.com /Brokers/UnumThoughtLeadership.aspx. 2. Laura Ungar and Jayne O’Donnell, “Dilemma over Deductibles: Costs Crippling Middle Class,” USA Today, January 2015, available at www .usatoday.com/stor y/news/nation/2015/01/01/middle-class-workers -struggle-to-pay-for-care-despite-insurance/19841235. 3. “Employee Benefits: Are You Getting Your Money’s Worth?” Colonial Life white paper, Spring 2013. 4. 2014 Inside Benefits Communication Survey, National Business Coalition on Health and Benz Communications, November 2014, available a t h t t p : / / b e n z c o m m u n i c a t i o n s . c o m / r e s o u r c e s / i n s i d e - b e n e f i t s -communication-survey-results.

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Reproduced with permission from Benefits Magazine, Volume 53, No.3, January 2016, pages 34-39, published by the International Foundation of Employee Benefit Plans (www.ifebp.org), Brookfield, Wis. All rights reserved. Statements or opinions expressed in this article are those of the author and do not necessarily represent the views or positions of the International Foundation, its officers, directors or staff. No further transmission or electronic distribution of this material is permitted. M A G A Z I N E

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