UBP blog


Employee turnover costs more than you think

We’ve all probably heard of the traditional formula for calculating the cost of replacing a terminated (voluntary or involuntary) salaried employee, one and a half times the exiting employee’s annual salary right?

Well, according to Watson-Wyatt Worldwide’s model for calculating the true-cost of replacing a salaried employee, the one and a half times their salary figure is just a piece of the pie. Here’s why.

This figure consists of the actual out-of-pocket costs (i.e. cost of advertising your job vacancy, cost of working with recruiters to fill the now vacant position, extra pay for unused vacation time, etc.) that the accounting department uses to determine the cost of replacing an exempt employee. Watson Wyatt calls these costs the “green costs”. They also identify two other types of costs that employers should consider, these are:

  • Real (labor) Costs: the cost of labor to deal with an employee’s exit
  • Hidden Opportunity Costs: The costs of lost revenue resulting from the position’s vacancy as well as the lower team performance. For example, Watson Wyatt found that when a typical industrial salesperson leaves a company, his or her team’s sales production can decrease by 3 to 5 times the out-of-pocket costs of the exiting employees.

What does this mean for employers?

Time to ramp up your employee retention programs:

 How do employers retain key employees? One of the first and most obvious things that comes to mind is making sure compensation and benefits packages are strong (or at least in line with the industry average). However, having strong compensation and benefits package means nothing if your employees know nothing about them. How are you educating employees on the value of their incomes and their benefits?

The HR in a Box™ and online Total Compensation Statements are key for our clients:

Universal Benefit Plans custom creates online Total Compensation Statements for our clients’ employees that are easily accessible 24/7 through their unique, password protected platforms of The HR in a Box™. Employees who can see all the pieces of the total compensation pie, and the dollar amount everything adds up to, become more appreciative of what their employers are doing for them and may think twice about leaving for a competitor. If your employees only learn about their total compensation at their termination interview when you start explaining COBRA costs, it’s already too late!



What keeps employees up at night more than their debt and retirement funds?

How about providing health insurance to both themselves and their families?

The Certified Financial Planner Board of Standards’ 2009 National Consumer Survey on Personal Finance reveals that “generating current income” and “providing health insurance” are numbers 1 and 2 respectively on this year’s list of greatest consumer concerns.

Here’s their list of the top 5 concerns: 

  • Generating current income (59%)
  • Providing health insurance coverage (55%)
  • Managing or reducing debt (53%)
  • Building a retirement fund (51%)
  • Creating an emergency fund (47%)

What this means for employers:

Right now, employees’ greatest concerns are generating an income and insuring themselves and their loved ones. For employers, this means effective benefit and compensation communication is key.

1. Communicate total compensation:

One great way for employers to address the top two employee concerns is through online Total Compensation Statements. These statements show employees every dollar that you’re contributing towards their income generation and their insurance coverage. When employees see the big picture of these two figures put together, it will help them to appreciate everything you’re giving them that much more.

Through our proprietary online HR and benefits management platform, The HR in a Box™, Universal Benefit Plans gives our clients’ employees free access to online Total Compensation Statements 24/7/365. 

2. Offer helpful hints:

In addition to communicating employee total compensation in a streamlined, green and easily-accessible way, HR professionals can offer employees helpful tips for managing their incomes and debts. For example, there are numerous ways to pay down credit card debt faster, such as consolidating all of your credit card debt to a lower interest card and finding small amounts of everyday savings to apply to the principal.

There are many other helpful hints out there that employers can pass along to employees. To access these hints, HR professionals can subscribe to receive free daily or weekly tips from financial websites and select tips to pass along to their employees.

The Hr in a Box™ Employer platform is a great employee communication tool that HR professionals can use it to send financial tips (as well as other HR communications) to all employees.

To sum everything up, Total Compensation Statements highlight all you pay for your employees and the communication tool on The HR in a Box™ lets you help them manage their financial resources better. So now, you can show your employees you care about the things that are keeping them up at night without spending any additional money (which would probably keep your fiscal department up at night!).


When it comes to communicating employee benefits, no news is the worst news you can give

Filed under: employee benefit communication — ubpblogger @ 9:15 am
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In spite of this, many employers are currently giving employees no news on their benefits. Data from the report Watson Wyatt 2009/2010 Communication ROI reveals that just 28% of companies plan to increase communication on employee benefits.

The report’s findings paint an even bleaker picture from the employee end of the spectrum. Case in point, 54% of employees nationwide (that’s more than half of all working Americans) have not received any communications this past year from their employers about their company’s current benefits or future plans regarding their benefit programs.

Two possible reasons for this are as follows:

  • Many company leaders feel it’s not their responsibility to communicate employee benefits
  • Many other leaders within companies are opting to simply communicate the negative effects of the current economic recession to employees, and nothing further.

What should be done?

As the economy remains weak, companies should reassure employees of the positive offerings still available to them. For example, if money at your company is tight yet you’re still able to offer employees a robust benefits package, why, then should you not communicate this to them?

Also, we all know that in difficult economic times, change (whether positive or negative) is inevitable and no company is completely immune to it.  Employers can reduce or possibly eliminate fear and confusion in the minds of employees caused by major changes if they do the following:

  • Sufficiently prepare employees for changes they’ve anticipated
  • Let employees know what will stay the same
  • Make sure employees know what is expected of them

Why is this employer-employee communication necessary? 

If employers fail to communicate vital benefits and company information to their employees, they risk losing their trust, making them feel undervalued or even leading them to search for other employment.

Providing employees with information about their benefits and keeping them in the loop regarding company developments, good or bad, gives them a sense of understanding and aids in their overall motivation. With no news at all, employers create a void between themselves and their employees that will ultimately hurt their organization.

So, when it comes to discussing employee benefits, it’s best for HR professionals to keep the lines of communication wide open.


Three reasons your employee benefits information should be online

Filed under: employee benefit communication — ubpblogger @ 12:00 pm
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We are almost a decade into the 21st century and just about everything has migrated onto the Internet. You can shop online, book travel online, bank online and in Boston, MBTA customers can now update Charlie Cards online. Shouldn’t employee benefits information be online too?

Here are three good reasons to put all of your company’s benefits information into one user-friendly online portal.

  1. Books and binders are for the dark ages.

 Yet, many employers still use them to communicate benefits. Paper is becoming more and more obsolete each day as employees spend greater amounts of time surfing the web. So, when you hand your employees a huge binder with all of their benefits summaries stuffed into it, you might as well just be handing them a scroll written with one of those feather pens. 

In fact, why don’t you just write their benefits information in old English while you’re at it? How does “thou shalt have access to thine health insurance 90 days following the date thou art hired” sound? Pretty old fashioned, right?

If you want to move your employee benefit communication away from the outdated and old-fashioned, there’s no better time than now to make the move to the Web.

 2.    HR needs a permanent vacation from redundant questions.

Anyone in HR knows that it’s more than a full-time job. You’re responsible for recruiting and retaining top talent, compliance with federal and state laws and so much more. Then, there’s benefits. Not only do you have to administer and communicate them, you have to answer the same questions about them every day.

Putting all employee benefits information into a user-friendly, secure online portal will take this burden off your shoulders. The next time employees come to you with redundant requests (i.e. “can I have a claim form?’) you’ll just need to point them in the direction of your website and they’ll be good to go.

 3.    There’s no such thing as “take your spouse to open-enrollment day”

This is significant because 50% of employees (who make up the audience at open enrollment meetings) don’t make the benefits decisions for their families, their spouses do. If the spouses are making benefits-decisions, shouldn’t they have self-service access to benefits information too?

An employee benefits portal with self-service access from anywhere there’s Internet helps out a lot with this. It allows employees and their spouses to view information on all benefits offered, make intelligent decisions together and even enroll from the comfort of their own homes.

Universal Benefit Plans has fully recognized that the future for benefit administration and communication is on the Internet. We have all the resources you’ll need to make your move to the Web a seamless one so call us at (617) 859-1777 and we’ll gladly share them with you.


Employee contributions to monthly premiums up 14.7% from last year

A recent study from benefits consulting firm Millman Inc. revealed a not too surprising figure. Although the total cost to insure the average family on an employer-sponsored health insurance plan went up 7.4% from last year, the employee contribution to this year’s amount went up 14.7%. Employees, on average, paid $4,004 in premiums and $2,820 in out-of-pocket medical expenses.

This year is the third consecutive year that the Millman Medical Index (MMI), which measures average annual medical spending for a typical American family of four on an employer-sponsored PPO plan, found a double-digit percentage increase in employee contribution amounts. Counting premium payments alone, Millman found that the total cost to participate in an employer-sponsored plan can exceed 8% of the average annual household income of $50,000.

Millman expects this trend of growth in employee contributions to their medical benefits to continue after the recession subsides. This is because as the recession began to take hold, employers responded with quick and definite cost-saving strategies such as pay cuts and layoffs. Benefit plans, and consequently benefit plan contribution amounts, are only changed annually and cost-saving changes in these are slower to materialize as a result.

Have employee contributions to insurance costs gone up in your company and do you expect double-digit increases in them over the next few years?

How have you communicated this to your employees?

Attention employers, high deductible health plans don’t sell themselves

As employers, you need to make a concentrated effort to lead your employees into these consumer-driven plans. Some statistics presented in an HR Morning.com blog post last week illustrate this plain and simple truth; high deductible health plans (HDHPs) have been very slow to gain acceptance.

When this plan design was introduced in 2006, the participation among the entire population of American workers enrolled in their company-sponsored health plans was just 2.7% and grew to just 3.8% in 2007. Let’s face it, no one likes change and the high deductible health plans are a huge change from the plans most of your employees are used to.

However, the times have changed since 2007 and with the economy in turmoil, HDHPs with their lower premiums are starting to look more and more attractive. A survey of 787 companies by benefits consultant Workscape, Inc. found that between 2008 and 2009, there was a 10 percent increase in the adoption of HDHPs.

Possible rationales for this change in high deductible plan participation growth can be gleaned from their survey as well. The survey revealed that 67% of companies offer programs to help their employees make informed decisions about participating in HDHPs and consumer-driven plans. They educate employees about the plans that they offer and empower employees to choose the plan that’s best for them.

What Universal Benefit Plans has done:

Our company has actually taken benefits education for employees one giant step further than this in order to keep pace with the digital age. Our revolutionary Video Benefit Reviews (VBRs) let employees watch easy-to-understand explanations of their benefits in a format that is far more engaging than a piece of paper (or 80 pieces of paper stapled together that no one has time to read). We also make VBRs accessible to employees 24/7/365 from anywhere there’s Internet access so they can watch their benefits from the comfort of their own homes and make informed decisions, in many cases with their family members right beside them.

Does your company offer a high deductible health plan or a consumer driven plan? Have you seen an increase in plan participation in recent years?

If so, what do you do at your company to educate your employees about this new–and sometimes confusing–plan design?

In 2009, retirement confidence hits an all time low

The percentage of respondents in the 19th annual Employee Benefits Research Institute (EBRI) Retirement Confidence Survey who reported that they were very confident in having enough money to retire comfortably has fallen to a record low of 13%. The most common reasons that workers today give for having such low levels of retirement confidence are economic uncertainty, inflation and the cost of living. The survey results have shown us several key findings.

1. Employees are delaying retirement:

Out of all the Retirement Confidence Survey respondents, 28 percent stated that the age at which they plan to retire has changed. The vast majority of this 28 percent of respondents—89 percent of them—plan on pushing back their retirement date so they can have greater financial security.

In your company, are opportunities for advancement for younger employees on hold because employees that you had thought would retire soon are, in fact, delaying retirement?

In this year’s survey, the median expected retirement age came out to be 65 years of age, yet 21 percent of workers in the United States plan on working into their 70s.

How do you expect that having full-time employees in their 60s and 70s at your company will impact the cost of your medical, disability and life insurance benefits?

2. Employees still don’t know how much they need to save for retirement:

Only 44 percent of working Americans (and their spouses) have tried to calculate how much they would need to save for retirement. On the other end of the spectrum, 44 percent of workers surveys stated that they simply guess the amount of money they will need to save up in order to retire comfortably.

When it comes to having the financial confidence in your ability to cover all your needs in retirement, it should never be a guessing game.

What are you, the HR professional/employer doing to educate your employees about saving for retirement?


Productive employees know how much they’re worth.

Filed under: employee benefit communication — ubpblogger @ 1:13 pm
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Productive employees also know the total cost of each individual benefit given to them. Knowing the complete value of their benefits leads employees to complain less about the benefit-related costs they incur. For instance, an employee may complain that he or she is required to contribute 100 dollars per-month to medical insurance coverage. However, when that same employee realizes that the 100 dollars is merely 10% of the total cost of the plan, he or she will appreciate the employer’s contribution of 900 dollars that much more than before. More than likely, this new level of appreciation will cause the employee to complain considerably less.

A simple way of calculating employee productivity involves taking an employee’s output and dividing it by an employer’s input (i.e. labor costs, hours worked). The components that go into an employee’s total output generally include performance related variables (i.e. dollars in sales, units produced) as well as measures of workmanship, adherence to company rules and regulations and the absence of complaints. If fewer complaints means higher levels of employee output and employees who know their worth make fewer complaints, it is plain to see that a clear, comprehensive benefits communication plan increases employee productivity.

The HR in a Box™’s Total Compensation Statements are designed to clearly communicate each employee’s net worth to a company in terms of salary plus employer contributions for each individual benefit. Tabular and graphical cost break-outs allow both verbal and visual learners to view the total picture of their benefits and compensations.

Isn’t it time your employees stopped taking your contributions towards their benefits plans for granted?


Has your company embraced the new technologies and communication tools needed to attract and retain top Generation Y talent?

Generation Y adults and future working adults, drawn from among the individuals born between 1979 and 1999, increasingly view their jobs and a means of building transferrable skill portfolios and leveraging them across various industries and positions.  Unlike Baby Boomers and Generation X employees, these individuals are less likely to be loyal to one company for their entire professional careers. The US government has predicted that by the age of 38, the average Generation Y working professional will have had upwards of 10 to 14 jobs. 

Generation Y workers expect the workplace to be a supportive environment where goals are clearly articulated and feedback is immediately available. They are tech-savvy, voracious researchers with the ability to access a limitless supply of information with the click of a mouse.

Generation Y employees are also financially savvy. A September 2008 survey conducted by Diversified Investment Advisors revealed that 37% of Generation Y workers expect to start saving up for retirement before they turn 25. Further, 49% of Generation Y workers say that retirement benefits are a very important determining factor in choosing a job.

Is your company prepared to address the needs of an increasingly more inquisitive and empowered workforce? Generation Y employees will have many questions about their benefits packages Can your company’s HR Manager answer them with clarity and accuracy?

Findings from the 2007 Career Builder Gen Y at Work survey showed that 87% of hiring mangers and HR professionals say that some or most Generation Y workers feel they are more entitled in terms of compensation, benefits and career advancement than are older generations.  Are you prepared to engage in informed interactions with Generation Y employees about compensation and benefits?


The Gen Y at Work survey also revealed that 49% of HR professionals and hiring managers feel that the most pronounced difference in communication between Generation Y workers and those from earlier generations is that Generation Y workers communicate the most via electronic means.


The HR in a BoxÔ helps companies embrace the influx of Generation Y workers into the workplace because it integrates the solutions to three key Generation Y expectations: technology utilization, research capabilities and comprehensive benefits information that HR professionals can communicate with ease.


Baby Boomers are retiring, and many Generation X workers are opting out of long hours. This leaves Generation Y workers in high demand. The HR in a BoxÔ will help your HR Department manage this rapidly growing pool of diverse human capital with unique needs. 

Universal Benefit Plans brings the HR and benefits-management capabilities of the Fortune 500 firms to small and mid-sized companies. It eliminates manual benefit administration and empowers employees through 24/7 access to comprehensive benefits information with the click of a mouse. The HR in a Box™’s double layer encryption ensures that all your company’s personal data on file is protected an secure. Visit our website and click on the “Products” tab to learn more about how The HR in a Box™ can benefit your company.


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