Deliver Employee Retiree Benefits Value in Public Sector
  • Benefits Strategy

When Reputation Isn’t Enough: What It Means to Deliver Benefits Value in the Public Sector Today

For a long time, public sector employers have distinguished themselves in the labor market by offering thoughtful and generous benefit offerings. These offerings are a key consideration in the value equation for professionals seeking to enter and progress their careers in public service.

New influences are impacting public sector employers, ultimately competing with the traditional value message associated with their benefits offering. The result is that for today’s public sector employer, realizing the employee attraction and retention goals associated with their benefits program investment is becoming increasingly difficult. What’s needed are innovative approaches aimed at more frequently and effectively reinforcing their “benefits value proposition” to counterbalance these influences.

Let’s start with scanning the landscape confronting public sector employers and the influences and challenges they face.

At the broad level, it’s a candidate's job market. Unemployment is at historic lows – hovering below or right at four percent throughout 2018 – giving employees a greater sense of freedom to explore opportunities across the entire market. This has impacted hiring. Since 2009, the share of agencies identifying key positions as being hard to fill has more than doubled. For skilled trades, for example, the percentage expressing difficulty in hiring has risen from 1% in 2009 to 21% in 2018.1

At the same time, private sector employers are now offering more competitive, tailored benefits packages. Public sector employers have to be even more thoughtful in their quest to engage candidates and employees in the benefits program. Adding to that challenge, public employers are also managing the unique burden of satisfying legislative directives. The timing of these directives and their impact on benefits often create a short runway for system updates and benefit communication prior to the open enrollment period. 

In terms of workforce demographics, public sector employers contend with designing and communicating benefits plans to public employees in a broad range of roles and a large contingent of retirees. In addition, the demographic trend of their active employees is maturing. This trend is accompanied by an expected wave of employee retirements. This upward age trend can be seen clearly in federal workers. Today, just 17 percent of federal workers are under 35 years old compared to 40 percent in the private sector.2 For the public sector overall, the average age is 45 years old, higher than the national average.3 This aging workforce puts public sector employers in a challenging position, having to manage talent acquisition to counterbalance this pending wave of retirements.  

Finally, public sector employers by and large are using legacy systems to administer benefits enrollment, administration and communication. By doing so, they may inadvertently obscure the value proposition of the strong benefits they provide, creating a gap for plan administrators. This was seen recently in a state where they discontinued key conveniences associated with their voluntary benefits offering due to system complexities.4 In these situations, the perceived value of the benefit options begin to erode and employee participation typically declines. This in turn undermines the strategic intent of the employer’s benefits program to attract and retain talented employees and improve their peace of mind while on the job.

Despite the headwinds caused by these trends, they do help to inform a successful the path forward.

We know that public employees value the benefits they are offered. Eight out of 10 public sector employees believe their employer offers a range of benefits that meet their personal and household needs.5 As that value has remained constant, employer’s historically focused on automating benefits enrollment and administration. With aspects of that objective now accomplished, many are shifting to an employee-first strategy. This strategy aims to enable employees and retirees to make the best benefit decisions for themselves and their families, especially as their personal needs evolve over time. 

For public sector employers to be successful in an employee-first strategy, they must take the next crucial step – more deeply engaging with employees, assuring the value of their benefits offering is fully communicated and understood. This can be accomplished by leveraging the right tools to support engagement, education and outreach in, what we at Benefitfocus term, the Moments that Matter. When an employee’s situation changes, an opportunity is presented to better align personal life and the benefits program, providing peace of mind for employees and a deeper connection the employer.  

So, what’s the catalyst to accelerate benefits program value and engagement? Simply put, it requires technology.

By introducing a cloud-based, benefits management platform that’s flexible and configurable, public sector employers can get the best of both worlds, delivering on an employee-first strategy while accomplishing administrative goals. Take a look at these examples:

  • Communicate to employees during the Moments that Matter. Life happens throughout the year, not just during annual enrollment. Leveraging targeted messaging tools that are backed by data means that you can engage employees around their benefits program in a personalized and frequent manner. Certain benefits offered during the annual enrollment period may not be applicable at that moment, communication tools can help you reach them during other moments when those benefit options should be considered.

    On the administrative side, flexible technology can also help you adapt and comply with those late-breaking legislative changes in a timely and cost-efficient way, while providing the tools to update and notify all employees of any potential influences or impacts on their benefit decisions. Targeted messaging can then be used for employee sub-populations if those implications happen to be different across agencies or employee types.

    Ultimately, the result of better communication is tangible. According to a public sector report from MetLife, employees say that they intend to still be at their job in one year when their employer’s benefit communications help them understand the value of benefits, not just the cost.5
  • Drive employee education around their benefits offering. Benefit plans are getting more diverse (and more complicated). Communication is key to helping employees connect with their benefits and see the value of their employer’s benefits investment. In practice, education can help achieve that value. According to Aflac, less than a quarter of employees fully understand their benefits, with the vast majority pointing to a lack of decision-support resources during the benefits enrollment process.6 By utilizing a modern benefits management platform, you can create a benefits shopping experience that matches consumer expectations, equipping them with data-driven insight to guide their enrollment decisions and educate them in the moment.
  • Open up access to benefits 365 days per year. While lifestyle benefits (i.e. pet insurance, identify theft protection, legal insurance) may not be material to every day work life, they’re certainly material to the concerns employees manage in their personal lives. They also help employers reinforce and diversify the employee value proposition. Benefits choice is an emerging imperative for completive benefit offerings. Choice, combined with benefit education and decision support, enables each employee to curate the benefits program to meet their personal needs. Eighty percent of public sector employers agree that customized benefits increase employee loyalty.5 
  • Realize administrative efficiency. With modern benefits technology, offering voluntary benefits doesn’t have to mean administrative burden. A technology platform that has pre-built, state-of-the-art integrations with voluntary benefit providers and specialty product suppliers can turn what was once very manual, error-prone into a seamless, automated process. Ultimately, resulting in increased data quality and reduced administrative burden within associated enrollment, payroll, and billing processes.

As public sector employers face challenging market and demographic trends, benefits programs continue to offer an opportunity to stand out. Public employees expect benefits to be a significant element their total career value equation. Taking the next step with modern benefits technology that will educate employees and retirees and meet them in those Moments that Matter, reinforces employee’s connection to the profession they’ve selected and the total value of their service.  

Get an in-depth look at how technology can transform your benefits program into a strategic advantage in the on-demand webinar, Benefits Technology Solutions to Better Serve the Public Servant, featuring expert commentary on the particular needs of public sector employers.


1Center for State & Local Government Excellence, State and Local Workforce Trends: 2016–2026


3U.S. Census Bureau

4BenefitsPRO, 2018

5MetLife’s 16th Annual U.S. Employee Benefit Trends Study, Public Sector

6Aflac Workforces Report