Employee Benefits: Why Perceived Value Matters More Than Generosity

Employers are investing more and more in employee benefits. Yet a sense of unease remains: despite plans that are often generous and competitive on paper, the value perceived by employees does not always live up to expectations. This observation raises a question that is increasingly present in strategic discussions: does what we offer truly create the value we expect?

This reflection is part of a broader Total Rewards perspective, as we previously explored in our article “A Distinctive and Coherent Total Rewards Strategy”, where alignment between the various components becomes a central value-creation lever. In this article, we focus on employee benefits, although the same line of reasoning can apply just as well to other components.

Investment, commonly referred to as “ROI” or “Return on Investment”, in an employee benefits plan generates stronger returns when the plan is aligned with employees’ needs, understood by them, and used appropriately. In other words, even a costly plan can produce limited outcomes if it is poorly aligned.

Certain signals deserve particular attention. When considered individually, they may seem minor and go unnoticed. Taken together, however, they often reveal a gap between the amounts invested by the employer and how employees perceive the value of those benefits and actually use them.

Below are some key indicators to monitor to determine whether employee benefits continue to meet employees’ expectations and needs.

When employers receive negative feedback or even complaints from employees about their employee benefits plan, it is often related to a specific situation. However, overall dissatisfaction with an employee benefits plan is rarely tied to a single component. Instead, it generally reveals a misalignment between what represents a significant investment for the employer and what employees truly prioritize.

A plan may offer extensive and distinctive coverage: multiple benefits, high maximums, and a substantial employer contribution. Yet employees may perceive it as complex, irrelevant, or poorly suited to their day-to-day reality. This dissatisfaction then becomes a key signal of misaligned generosity, where perceived value no longer reflects the level of investment.

As employees’ needs evolve and their realities change, it is considered a best practice to periodically review the employee offering. What was aligned a few years ago may no longer be today, and this gap will only widen if the employee benefits offering does not evolve accordingly.

Low utilization rates of the Employee Assistance Program (EAP), virtual care, or preventive services often raise questions. The risk is to conclude too quickly that these services are unnecessary. Yet when used effectively, they help reduce presenteeism and absenteeism and support a preventive rather than a curative approach.

Conversely, high consumption of prescription drugs or paramedical services does not necessarily prove the need for those coverages. While their medical benefits are well documented, it is still worth questioning whether more effective alternatives could be considered.

Atypical EAP usage, whether low or high, often reveals untapped potential. It may indicate a lack of clarity, visibility, or alignment between the offering and real needs. The real issue is therefore not the EAP itself, but rather how it is positioned, explained, and integrated into the overall employee experience.

Realigning a plan does not necessarily mean increasing budgets. In many cases, it is about better directing existing investments.

To avoid making decisions without a clear framework, it is important to establish guiding principles for benefits plan management, as outlined in our article “Group Insurance Guiding Principles: The Importance of Building and Implementing Them”.

Market practices, regulatory changes, and available solutions evolve quickly, making it a constant challenge for organizations to stay current.

External support provides a critical perspective on trends, helps distinguish passing fads from truly impactful levers, and allows decisions to be adapted to the organization’s specific reality.

A service can be widely used without being truly appreciated, while a less-used service may be highly valued by a specific employee segment. Relying on a single indicator often leads to counterproductive decisions.

Cross-referencing utilization rates with satisfaction and perceived value makes it possible to assess the quality of outcomes, not just their volume.

Employee surveys are one of the most effective ways to identify expectations and improve the relevance of the offering, often without increasing costs. However, it is essential to go beyond general satisfaction and ask questions that truly inform decisions: what is used, what is understood, what is perceived as useful, what is missing, and so on. Your team of experts can help you determine the most relevant questions based on your context and objectives.

There is no universal survey frequency: the right pace depends primarily on the organizational context and the speed of change. Short, targeted surveys are more relevant during periods of transformation, while a stable environment allows for less frequent, more in-depth exercises. The goal is to obtain actionable data without creating survey fatigue among employees.

Benchmarking remains a useful tool, provided it is not used as a grocery list. The objective is not to copy the market, but to understand where investment is truly differentiating for employees, and where it is not.

Used thoughtfully, benchmarking helps reallocate resources toward the levers that matter most.

A plan that is difficult to administer or use creates friction and reduces perceived value. Simplifying access to coverage and to insurance providers’ digital platforms supports smoother, more appropriate, and more satisfying use—both for employees and for benefits plan administrators—while improving the outcomes of existing investments, without changing the plan itself.

A well-designed employee benefits plan can generate little value if it is poorly understood or poorly communicated. Effective communication is not only about informing employees, but about helping them understand how to access and use the right services, at the right time.

In many cases, employees are not fully aware of the value of their benefits, particularly when the employer contribution is significant. In such situations, the Total Rewards statement becomes a key communication tool, enabling employees to appreciate the full value of what their employer provides.

Clear messages, tailored to employees’ realities and targeted to their needs, help fully activate existing plans, strengthen perceived value, and optimize utilization—without requiring additional investment.

Employee benefits represent a significant investment. Their true return—ROI—is measured in the value created: a plan that is understood, relevant, and used thoughtfully by employees.

When poorly aligned, even a generous plan can deliver disappointing returns. Conversely, a well-communicated plan becomes a powerful value-creation advantage.

Before adding or removing coverages, take a step back and consider the following exercise:

• Identify the employee benefits that are most used and valued by your employees;
• Pinpoint costly elements that offer limited relevance;
• Select one concrete action (adjust, simplify, explain better) to implement now.