A new report finds that many employers believe they are meeting workers’ benefits needs, but employees often see things differently. That disconnect is creating a benefits gap.
Aflac’s Workforces Report highlights growing gaps in communication, financial preparedness and access to benefits information, all of which affect employee engagement and retention. The report identifies areas where employers can close the benefits gap, increase benefits uptake and improve employee retention and recruitment.
What Data Shows About the Benefits Gap
- The report found that 75% of employers believe employees are satisfied with their benefits packages, but only 65% of employees agree.
- One of the biggest disconnects involves communication and guidance during enrollment. Nearly 37% of employees said they want to speak with a real person when making benefits decisions, yet only 28% of employers offer that option. Similarly, 32% of employees want one-on-one access to a benefits consultant, but only 28% of employers provide it.
- While 78% of employers believe their workers could handle a major unexpected medical bill, 44% of employees said they could not afford $1,000 in out-of-pocket costs for an illness or injury.
- More than half of employees reported anxiety about health care costs their insurance does not cover.
Impacts on Employees’ Mental Health
The report points to rising levels of stress and burnout. Nearly three-quarters of employees reported moderate to very high stress, and burnout reached its highest level in six years.
Gen Z workers reported the highest burnout rates, surpassing millennials. Only 48% of employees said they feel confident their employers care about their mental health, down from 54% recorded a year earlier.
How Lack of Communication Widens the Benefit Gap
Communication gaps may be contributing to the problem. Nearly 69% of employees said they want more information about their benefits, and only 42% of employees said they fully understand their health insurance coverage, down from 49% the previous year.
Although 46% of employers said they communicate about benefits throughout the year, only 34% of employees agreed they receive that year-round communication.
Digital access matters too. More than four out of five employees said the ability to manage benefits online is very or extremely important, yet 30% of employers still do not offer online benefits management tools.
Improving Benefits Delivery to Close the Gap
The findings suggest that employers do not necessarily need to offer more benefits. They may just need to make existing benefits easier to understand and use. Employers can improve engagement by:
- Communicating about benefits year-round instead of only during open enrollment.
- Providing access to benefits counselors or advisers.
- Expanding digital enrollment and self-service tools.
- Offering supplemental benefits that address financial concerns.
- Investing in mental health and burnout prevention programs.
- Regularly surveying employees to understand which benefits they value most.
Organizations that close the benefit gaps may improve employee satisfaction, lower stress and strengthen retention in an increasingly competitive labor market. Workers who are highly satisfied with their benefits are more than twice as likely to report high job satisfaction than workers who are less satisfied.
Benefits Gap: Top Challenges Employers Face
(Percentage ranking the issue among their top three challenges)
- Offering robust benefits while staying within budget or cost constraints: 54%
- Understanding what employees want in benefits offerings: 56%
- Determining the benefits that will meet employees’ needs: 48%
- Finding time to dedicate to benefits selection and administration: 41%
- Communicating and educating employees about benefits: 37%
- Understanding options to control benefits costs: 32%
- Managing benefits administration and regulatory compliance: 31%
