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The role of benefits communication Study reveals: As the economy begins to recover, an effective benefits education strategy is more important than ever. Unum national survey1 - reaffirmed last year's findings: A strong link between employee education and worker satisfaction. Results show you can maximize your benefits investment: Using effective employee benefits education With a proven combination of tools and timing using the 3+3 communication strategy At little or no added cost As the economy takes slow steps toward recovery, workers are expected to gain confidence and start job shopping. This has elevated the need for competitive benefits and — more importantly — the most effective means to communicate their value. This is strategically significant, since employees’ perceptions of their benefits education are linked to higher levels of job satisfaction. And that is a key driver of employee engagement. When you consider that a Towers Wyatt survey showed that engaged employees are 26% more productive than their less engaged peers 1— you can see how this can mean a strong return on investment for benefits spending. For the past two years, Unum has studied the key components an employer needs to get the best ROI from benefits education. The result is the “3+3” communication strategy detailed in this study. 1 Towers Watson, “2008/2009 WorkUSA Report,” 2009. 1 Unum, “Employee Education and Enrollment Education Survey,” January 2010.

Benefits communication: “what you say” is as important as “what you do” Quality communications can drive employee perceptions This chart shows the strong correlation between employees’ perception of their benefits communications with higher levels of workplace satisfaction. These high numbers reaffirm Unum’s 2009 study conclusions. It’s interesting to note that a lower-quality benefits plan was still better perceived when employees thought their benefits communications were very good or excellent. But the amazing payoff is the 88%: that’s the result when you pair a solid benefits plan with great education. And that’s a lot of happy employees. So having a great benefits plan is step one – but communicating it effectively –“what you say” - has as much impact as “what you do.” Unum, “Employee Education and Enrollment Education Survey,” January 2010.

A positive influence on key drivers of workplace satisfaction Employees who receive quality benefits education report greater satisfaction The data shows how employees who believe their benefits were effectively communicated are more likely to feel their employer values their work and cares about their well being. These measures increased significantly over the 2009 survey findings. These employees show much higher levels of engagement, morale and loyalty, compared to those who felt they received fair or poor benefits information. In fact, the majority of those surveyed said they would stay with their current employer even if offered better pay elsewhere. This positive impact on retention can help defray the high cost of employee turnover — another significant return on your benefits investment. One important note: Just as better benefits communication can drive worker satisfaction in a positive direction, reducing or eliminating benefits education can drag satisfaction rates downward. Unum research shows that when employee education efforts were reduced for economic reasons, employee satisfaction scores also began to show a downward trend. Unum, “Employee Education and Enrollment Education Survey,” January 2010.

An education strategy that pays off How can you maximize your investment in benefits? First, examine your current benefits education offer. With so much at stake – it’s important to nail down the elements that make these results possible. The first step should be to take a critical look at the existing benefits education program in place. Look at it from an employee’s point of view. Would the average workers understand the communications? Do they include insurance “jargon” that no one understands? Providing ineffective benefits education can have a significant negative affect. It’s equal in impact to the positive impact of effective benefits education. As you can see from this slide – most employees who were surveyed say their programs have lots of room for improvement. Unum, “Employee Education and Enrollment Education Survey,” January 2010.

A variety of communication tools fit diverse learning styles Visual learners prefer videos or printed materials with images. Auditory learners prefer podcasts, video or spoken communications. Hands-on learners do better with online interactive tools or worksheets they can fill out. Minimum of 3 learning options helps support different learning styles So how do you develop a successful strategy? The first important factor is to offer the right number of communication tools employees need to feel informed. The survey shows that employees preferred having at least three communication tools available to them. This makes sense when you consider that not everyone uses the same learning style to absorb information. Visual learners may prefer videos or printed materials with images. Auditory learners usually prefer podcasts, video or spoken communications. Hands-on learners are “hands-on” and may do better with online interactive tools or worksheets they can fill out. By offering a variety of print, electronic media and meetings, when possible, you can make sure everyone has an opportunity to comprehend the information. Unum, “Employee Education and Enrollment Education Survey,” January 2010.

Benefits plan communications need sufficient time 3 weeks = optimal time to make informed choice Gives employees sufficient time to: Take materials home Evaluate their personal situations Attend informational meetings Consult with relatives or friends Do some additional research Put it all together … Second - what timeframe works the best? Unum’s research shows that employees who started receiving benefits communications three weeks or more prior to their enrollment deadline were much more likely to report they had enough time to make informed choices. It’s not just a matter of “reading” time – many employees like to share the information with a spouse or family members. Others want to do additional research online. The key message is that it takes both a minimum of 3 weeks and at least 3 communication tools to maximize a benefits investment. And this approach requires little or no added cost. Unum, “Employee Education and Enrollment Education Survey,” January 2010.

The 3 + 3 communication strategy improves employees’ understanding Employees who have at least 3 weeks and 3 communication tools: 90% have a higher level of comfort with their benefits decisions 81% better understand the value of their benefits How did we arrive at the optimum time of “at least three weeks?” We asked employees how long they had to review their benefits information – and found that those who had one week or less had the least comfort in making benefits decisions… and in understanding the value of their benefits. The scores were noticeably higher when employees had three weeks or more. These metrics remain consistent with Unum’s 2009 survey findings. Unum, “Employee Education and Enrollment Education Survey,” January 2010.

Impact of voluntary benefits on employee satisfaction Employees offered voluntary benefits report higher levels As we examined the research findings, we found another clear link to employee satisfaction – voluntary benefits. Notice the difference between the attitudes of workers who are offered voluntary coverage at work – and those who are not. This coverage can help offset the high out-of-pocket costs that result from co-pays, deductibles and other expenses that aren’t covered by medical plans - or they can enhance existing life coverage that doesn’t offer a benefit high enough for employees’ needs. When companies offer a variety of voluntary benefits, employees can choose the coverage that best fits their age and stage of life. That’s a perfect fit for today’s diverse workforce. But this only works with the effective benefits communication strategy we’ve discussed. Since employers pay little or nothing to add these plans – what a bonus. These findings are consistent with Unum’s 2009 survey results. Unum, “Employee Education and Enrollment Education Survey,” January 2010.

Put these findings into action Identify an effective communication strategy that employs a variety of learning methods. Use clear and relevant education materials Be sure to clearly communicate: The value and financial protection the benefits offer That you value your employees How affordable the benefits can be Highly engaged employees are 26% more productive1 How do you put this research to work for you? Here’s a short list of recommendations. [go over list] As Unum’s research indicates, a strong employee education and communication strategy can multiply the returns of an employer’s benefits investment. The end result is a more engaged employee who is well informed and motivated to be more productive. Can I share with you some materials on Unum’s employee education capabilities? 1 Towers Watson, “2008/2009 WorkUSA Report,” 2009.

Sources Unless otherwise cited, all data is from: Unum, “Employee Education and Enrollment Education Survey,” January 2010. Results based on an online survey by Harris Interactive of 939 employed adults with benefits from a variety of providers. © 2010 Unum Group. All rights reserved. Unum is a registered trademark and marketing brand of Unum Group and its insuring subsidiaries. Insurance products are underwritten by the subsidiaries of Unum Group. MK-1953 (6-10)