Public Sector Strives for Birdie on 'Next Generation' of Benefits

Written by HNI Content Manager | Tue, Aug 24,2010 @ 08:22 PM

Relationship Manager, HNI

Are some public sector employers content to spend more and get less while creating the environment where your employees feel even more powerless?

State and local governments are faced with declining revenues, huge budget shortfalls, high unemployment, an aging workforce and rising health care costs. Now more than ever, under-performing health plans and taxpayer-subsidized "Cadillac" benefit plans, health care expenditures for the public sector (municipal, county, school, state governments) are being carefully scrutinized.

Employee benefits are a huge cost to virtually every employer organization and health care is the primary driver. Our representatives in Washington, D.C. have helped raise public awareness, but they have focused on the financing mechanism (health insurance) and not the real problems in health care. While some issues are beyond employers’ immediate control (i.e. government cost shifting, provider quality, etc), a tremendous opportunity exists to CHANGE THEIR GAME by improving the health of employees and the way they consume health care services.

Full employee engagement is at the heart of stabilizing health care costs. Employee benefits and employee engagement are directly linked and benefit programs, when effectively utilized, can improve organizational outcomes. Organizational outcomes are affected by the following indicators and in many cases these are directly correlated to employee disengagement:

  • Attendance problems
  • Family Medical Leave (FML) occurrences
  • Safety record/accident and injury occurrences
  • Grievances
  • Behavioral health costs

So what can an organization do to improve employee engagement? Towers Perrin’s 2007-2008 Global Workforce Study suggests that an employee’s belief that management is interested in his or her well-being was the number one driver of employee engagement. According to Julie Gebauer of Towers Perrin, "employees are actually eager to invest more of them to help the organization succeed. And they will do so - if they see the personal return on investment (ROI). The influence of the organization, especially its senior leadership, far outweighs employees’ personal traits (like ambition or learning orientation) or, say, the role of a person’s manager".

We have spent decades designing and paying for a "benefits package" for our employees. The package is made up of "things", like health, dental, life, disability insurance, etc. We provided these "things" to compete in the labor market, to attract/retain our workforce and to care for their safety/well-being and future. Yet, employees often feel disillusioned by their benefits because in their eyes benefits are not a benefit to the majority of them. For most organizations, nearly 50% of covered members use little or no health care. They see a huge payroll deduction taken from their paycheck, not a benefit package in place to protect them from financial hardship.

Benefits are deeply and profoundly psychological, health care in particular. In order to preserve value, employers need to reflect on several important questions:

  • Do we feel comfortable that we have control over future costs?
  • Are the benefits we offer perceived as a benefit?
  • Do our programs positively contribute to employee engagement?

If your answer is no to one of these questions, it might as well be no to all three. No control will lead to lesser benefits; lesser benefits will lead to lower engagement levels; lower engagement levels will lead to less control over costs. The cyclical connection is undeniable!

Employee engagement must be the starting point for taking control of our collective health care future. We cannot rely on the other players (insurers, providers, government) to fix the problems.

Again we ask, are you content to spend more and get less while creating the environment where your employees feel even more powerless? Or are you counted among the majority of great leaders who act on opportunities when it is time to CHANGE THE GAME?

HNI utilizes proprietary employee engagement strategies to create high performing benefit plans that have proven success. Our strategies are successful because they appeal to the emotions of employees and provide the safety net that characteristically supports a valuable benefit plan.

The US is poised for great change and it’s a good time for public sector to develop "next generation" employee benefit strategies while at the same time refreshing your approach to more fully build upon long term intrinsic value, employee commitment and cost management features.


  • Towers Perrin’s 2007-2008 Global Workforce Study
  • Nancy Melcher, HNI Engagement Specialist