Employee benefits are a significant part of overall compensation at many companies. However, research shows that employees often don't utilize the full range of benefits available to them. A recent survey found that less than 7% of employees take full advantage of their benefits packages¹.

Underutilization of benefits represents lost value for both employers and employees. When benefits go unused, companies don't see the full return on their investments. And employees miss out on perks that could enhance their quality of life^2.

Fortunately, there are strategies both employers and employees can use to improve benefits utilization³. Here are some best practices.

For Employers: Promote Your Benefits Offerings

Too often, employees simply aren't aware of all the perks available to them. A 2022 survey showed that 32% of workers feel confused about their benefits packages¹.

To raise awareness:

• Communicate regularly about benefits via emails, newsletters, intranet posts, etc. Don't just mention them during open enrollment¹.
• Educate employees on how to use each benefit and why it's valuable².
• Create dedicated webpages, guides and FAQs explaining your offerings.
• Use surveys and focus groups to get feedback and gauge what resonates³. Adjust your strategy based on insights.

In your communications, use plain, easily understandable language. Include real-life examples and testimonials from employees who have utilized the benefits^4.

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Strategies to Boost Utilization

In addition to promoting offerings, there are several strategies employers can use to get more employees to actually use their benefits^5:

• Incentivize utilization. Offer rewards like gift cards or extra PTO when employees use certain benefits. This taps into principles of behavioral economics.
• Simplify enrollment. Streamline signup processes with easy-to-use HR tech. Complex paperwork is a barrier to benefit utilization.
• Offer voluntary benefits that employees can customize and pay for themselves, if interested. These have higher utilization rates—up to 75% ¹.
• Survey regularly to find out which offerings employees value most¹⁰. Use this intel to modify your lineup.
• Set utilization goals and track progress over time. This could motivate leaders and give direction.

For Employees: Know Your Perks

As an employee, make sure you understand all the benefits available so you can take full advantage.

Thoroughly review your benefits guide and packages from HR⁵. Ask questions if anything is unclear. Don't assume you can't use a benefit.

Discuss with colleagues about which offerings they use and how. Track your utilization throughout the year, not just at open enrollment.

Some of the most underutilized perks include retirement contributions, health savings accounts (HSAs), employee stock options, tuition assistance, employee assistance programs (EAPs) and wellness incentives⁶. Make sure you look into every benefit offered.

The Costs of Low Utilization

When benefits go underused, it ends up costing both employers and employees in tangible ways:

For employers ⁷:

• Lower ROI on benefits investments
• Reduced ability to attract and retain talent
• Higher healthcare costs over time as preventative resources are underused

For employees ^8:

• Out-of-pocket expenses could be avoided
• Less prepared for unexpected life events and financial hardship
• Greater financial stress affecting work performance

Plus, benefits utilization offers insights into overall employee sentiment and engagement levels⁹. Low uptake signals poor perceptions of employer support.

Utilization Statistics Show Room for Improvement

Overall benefits utilization remains low, though rates vary significantly for different offerings^1:

• Employee discount programs: 55%
• Private health insurance: 66%
• Dental insurance: 68%
• Retirement savings plans: 75%
• Adoption assistance: <1%
• Pet insurance: 2%
• Tuition reimbursement: 3%
• Employee assistance programs: 5%

For context, experts consider benefit utilization rates above 75% to be strong1. Most employers fall short of that goal.

Diversity and Inclusion Considerations

HR teams should analyze utilization metrics for diverse employee segments. Benefits uptake often varies by gender, age group, ethnicity, disability status and more^11.

Then, adjust programs and messaging to be more inclusive. For example, spotlight offerings supporting caregivers, new parents, continuing education and remote work.

Leverage Technology

Technology is critical to promote and deliver benefits across a global, mobile workforce¹². Digital tools can:

• Streamline access through self-service portals
• Enable personalized recommendations
• Deliver bite-sized learning opportunities
• Allow customization and flexibility
• Integrate systems for analysis

Chatbots, text alerts and interactive videos may resonate more than traditional emails.

Measure Success with Data

Robust analytics help employers continuously reshape rewards programs based on utilization rates, user feedback and benchmarking^13.

Key metrics to track include:

• Overall participation for each benefit
• Participation by employee demographic
• Per-employee benefit spending
• Employee satisfaction scores
• Comparison to industry benchmarks

Establish a technology infrastructure to compile this data automatically instead of manual processes. Then build a dashboard for easy access.

By promoting and optimizing your workplace perks, both employers and staff can maximize their benefits. This leads to happier, healthier and more productive employees.