Many HR leaders intuitively understand that there’s a big problem with employee communications. The challenge is conveying that problem to stakeholders who don’t experience the day-to-day pain of confused employees and low participation rates. This is where a business case comes in handy: it’s a sober reality check for why an investment in this part of HR is so necessary.
In this article, I’ll outline the business case for engaging employee communications and explain how to customize it for your organization. I wrote this for the HR leader advocating for change – but it’s just as much for the healthy skeptic, doing his or her due diligence, trying to understand if this kind of initiative is worth the investment.
Without Employee Engagement, Many HR Programs Don’t Work
The premise of this business case is really quite simple: Modern HR programs, benefits, and other activities depend on employee engagement to actually work.
A High Deductible Health Plan may be a great way to decrease health care costs, but not if employees misunderstand how the plan works and misuse care. A newsletter about company happenings can help drive culture, but not if most employees don’t read and appreciate it. Wellness initiatives are wonderful, but not if employees don’t participate.
It wasn’t always this way, but over the last two decades, HR has undergone a tremendous shift. It used to be driven by diligent administration of back-office functions and benefits. Today, HR has to be front and center, driving employee engagement in countless programs, benefits and other activities aimed at boosting productivity and containing costs. Increasingly, it’s more marketing than operations.
Health care offerings in particular are a good example. We used to just ask employees to pick between the HMO and PPO plan.
Today, we're asking them to:
- Understand the High Deductible Health Plan.
- Be a good health care consumer.
- Take the Health Risk Assessment.
- Don't forget to do the biometrics, too, or you won't get the full incentive.
- Use the Health Savings Account as a retirement vehicle.
- Participate in the wellness program.
- And on, and on, and on…
That's an explosion of complexity and a huge change in HR’s goals. The success or failure of benefit programs is no longer determined by diligent administration. It's determined by year-round employee engagement.
This pattern repeats itself across the HR ecosystem, and as it does, HR's potential ROI is depressed. Here’s a small sampling:
- Benefits — Low enrollment and endless complaints about HDHP.
- Wellness — Participation rates that top out at 30%.
- Culture — Disengaged Millennials and low participation in engagement surveys.
- Payroll — Lack of understanding of total rewards.
- Recruiting — Higher hiring costs due to lack of referral program awareness.
- Onboarding — Longer time to achieve competency due to lengthy and dense welcome training.
- Learning and Development — Less skilled workforce due to low use of platforms.
- Administration — Manual transactions due to low use of employee and manager self-service.
It's no wonder that according to Google, interest in the term "employee engagement" has increased by 568 percent since 2004, and it only continues to grow.
If HR programs don’t have engaging employee communications that drive understanding, appreciation and participation, then HR programs can’t possibly generate their full ROI. And in the worst-case scenario, poor communications create higher HR service delivery costs from upset employees and one-off issues.
In essence, HR has become a product: it needs to be sold (and resold) to its customers, the employees. And like any product, if people don’t know about it, they don’t buy it.
This basic fact brings us to a formula to explain the ROI of engaging employee communications:
HR Programs + Employee Communications = ROI
Given the same set of HR Programs…
If Employee Communications are sub-optimal, then there will be a lower ROI.
If Employee Communications are engaging, then there will be higher ROI.
Let’s explore some examples that bring the above formula to life.
3 Examples of ROI from Engaging Employee Communications
Historically, it’s been hard to measure the impact of employee communications. There just hasn’t been very good analytics built into legacy communication tools like email or intranets. But over the past seven years, the team at Airbo has built a system that can measure the impact of a specific message on a specific person. Here are three examples that help demonstrate the link between engaging employee communications and ROI:
A Fortune 500 financial services company ran an exhaustive communications campaign to drive employees to complete their biometrics, for which they were heftily incentivized. This included intranet articles, webinars, newsletters, and just about any other imaginable medium. They were still short of their biometrics completion goal, so they decided to try something different and rolled out interactive communications. Within two weeks, Biometrics participation increased by 1,000 employees, helping to avoid tens of thousands of dollars in incentive spend.
At Alta California Regional Center (ACRC), employees have to sign an annual conflict of interest form. Driving completion of the form is an intense two month undertaking that included extensive personal and email outreach. According to Jennifer Crick, Director of Human Resources, “it used to take us forever to get people to fill out their forms.” On average, traditional communications achieved a 65% form completion rate. The next year, ACRC added engaging employee communications. Within three weeks of launch, the form’s completion rate spiked to 91%.
Fujifilm offers a great benefits package, but many employees didn’t seem to understand it. As Carolyn Gordon, Director of Benefits put it: “We were doing everything we should have been doing,” a wellness program, many well-designed communications, and incentives. In late 2011, Fujifilm started adding interactive employee communications. Within the first year, Health Assessment completion rates increased from 17% to 54%, and 91% of participants reported a greater appreciation for their benefits.
In all of the three cases above, adding engaging employee communications boosted measurable outcomes. The programs didn’t change – but their marketing did. We see this pattern repeat itself over and over again, and it really is that simple. But if it’s so simple, why is it so hard?
HR Doesn’t Have the Tools To Do Engaging Employee Communications
Engaging employee communications are hard because HR doesn’t have the tools to do it. Adding them requires a new investment and a new way of doing things.
There’s a misconception that corporate communication tools like intranets and emails should be all HR needs to drive employee engagement, just as they always did in the past. They're largely free, so that would certainly be convenient. But in the past, HR didn’t need to drive engagement, it just needed to deliver legally oriented notifications on an as-needed basis. As HR became employee engagement driven, what HR needs out of its communication tools changed, but the tools didn't.
To feel the magnitude of the shift in thinking, just imagine if Apple had to get people to buy an iPhone using a ten-page brochure filled with technical instructions. Using a ten-page Open Enrollment guide to get employees to appreciate, let alone understand, their benefits is an equally impossible task.
Employees Have Changed - Attention Spans Are Short
It’s not just HR that’s evolved over the past 20 years, employees have changed quite a bit too. Attention spans have become short, which has made communication of complex topics particularly difficult. You may have already heard about the Goldfish Attention Span. As Time Magazine explains it:
The average attention span for the notoriously ill-focused goldfish is nine seconds, but according to a new study from Microsoft, people now generally lose concentration after eight seconds, highlighting the effects of an increasingly digitalized lifestyle on the brain.
The research has its critics, but it stuck a nerve. Just as HR needs more employee attention so it can generate ROI from its programs, employee attention has become harder to get. This is a cross generation problem, but it’s particularly acute for Millennials, who grew up with a phone in their hand, and are now the largest generation in the U.S. workforce.
The attention problem hits HR particularly hard because paying attention to HR is often discretionary. Managers aren’t exactly firing their employees for being bad health care consumers or missing the company newsletter. We’re asking employees to engage in HR content instead of doing something else. Today’s HR teams are in a fight for discretionary attention with Facebook, Instagram, and other sources of distraction. That may be hard to fathom, but over the past five years, nearly universal access to personal devices at work have made this the new reality.
Intranets are basically a replacement for filing cabinets. Emails are easily ignored memos. HR is ill equipped to compete using the standard communication toolkit.
How to Build Your Business Case
What we’ve reviewed up to this point is the marco-level business case for engaging employee communication. To summarize the broad points of the business case:
- Today’s HR programs require employee engagement to work.
- When employees don’t engage, HR experiences sub-optimal ROI.
- HR doesn’t have tools to complete for employee attention.
- If we invest in engaging employee communications, ROI will increase.
Now, it’s time to adapt the business case to your organization, which you can do by answering three questions.
In the next year, what are the programs, benefits and other activities that require employee engagement to work? Is there an initiative to improve employee engagement tied to an engagement survey? A big change to your health insurance you need to communicate? An HRIS implementation? A wellness program or a focus on attracting Millennials to job openings? A volunteering event you want to boost attendance to? Start your business case by listing these items out.
What happens when employee understanding, appreciation, and participation in each item above is sub-optimal? Your data can be qualitative or quantitative, and in fact, stories are often more influential than numbers alone. For example: “We’ve had four employees email us in the last week that didn’t understand that we did a 401k match, even though we’ve communicated it multiple times. When employees don’t understand their benefits, they under-value 30% of their compensation package.”
What improvement do you anticipate from engaging employee communications? For example, we’ll have higher event attendance or more participation in our wellness program.
To help you get a jump start on your list, here are 7 ROI examples we have seen many organizations use.
We just ran an event that took a long time to plan. The majority of the cost is typically fixed from coordination and venue. The more employees participate, the less it costs per employee. We believe that through better employee communication we could have increased attendance by 30%, which would improve impact and reduced per employee costs.
|Benefits Appreciation||Lack of understanding of employer contributions to health insurance and retirement plans leads to decreased perception of total rewards. This makes it more likely that a competitor could hire away our best talent, and that employees under-value 30% of their compensation package. Using engaging communications, we can increase the percent of employees that appreciate our benefits.|
|High Deductible Health Plan||Employees don’t enroll because they don’t understand how the plan works. Higher enrollment decreases the company’s health care costs. Using engaging employee communications, we can increase enrollment and decrease costs.|
|Biometrics or Health Risk Assessment||Complexity in completing these activities discourages employees from participating, requiring higher monetary incentives to drive participation. Better communication would better explain how to complete the required steps, driving up participation without new monetary incentives.|
|Wellness||Low program participation rates increase the per-employee cost since pricing is done on an eligible employee basis. Using engaging employee communications, we can increase participation and receive a better return on our investment.|
|Metrics||The HR team needs real-time data on what employees value so we can better allocate efforts towards the activities that are most likely to impact attraction, engagement and retention. If HR is doing communications that aren’t measurable, it doesn’t know what employees value.|
|Operations||Employees reported being confused about our offerings. Here are some recently complaints we had to resolve and how much time it took. By improving how we communicate with employees, we can reduce confusion, and reduce the time an employee has to spend on administrative tasks. HR will also realize time savings that it can better allocate toward higher-order activities.|
If you have the resources, it’s also helpful to gather data points from employees. Here are the two most common survey questions we’ve seen used by our customers to help build a business case.
Rate your level of agreement: I like the way HR communicates with me.
Rate your level of agreement: I’m confused about my benefits.
Next: How to Make Communications Engaging
Now that you’ve created your case for change, it’s time to implement! Subscribe below to keep up to date with tips on how to create engaging employee communications.
Have questions about how to make your case for change? Email me at email@example.com .