Why your benefits program is your most underleveraged retention tool

Most HR leaders know that a strong employee benefits program helps attract and retain talent. Fewer treat it as a living, breathing people strategy that requires the same year-round attention as performance management or culture-building.

That gap, according to Kara Hoogensen, senior vice president of workplace benefits and protection at Principal Financial Group in Des Moines, Iowa, is where significant employee loyalty and engagement is being left on the table.

"Value is the name of the game," Hoogensen told Insurance Business Benefits US, "but value isn't something that immediately comes. There has to be intentionality around how the value is provided."

The inclusion link HR leaders cannot afford to ignore

Principal's Work and Worth research found that employees who feel their employer's benefits program is relevant to their lives are 1.2 times more likely to feel included at work.

For HR directors already investing heavily in diversity, equity, and inclusion initiatives, that is a significant finding and one that points to benefits design as an underutilized inclusion lever.

"If you feel like you're welcome and included in the workplace and that someone is actually caring about you in a way that transcends the workplace," Hoogensen said, "you're more likely to expend discretionary effort and energy towards the work that you're being asked to do."

The loyalty effect extends beyond the individual employee. The same Principal research found that workers show 22 percent more loyalty to their employer when they see their colleagues access and benefit from coverages such as accident insurance or critical illness protection, even if they never use those benefits themselves.

The multi-generational design challenge

With as many as five generations now sharing the same workplace, one-size-fits-all benefits design is increasingly inadequate. Hoogensen said the most effective HR teams are working with their benefits advisors to map the specific needs of each employee cohort and then building programs that offer meaningful choice without creating decision paralysis.

"How do I provide the right level of choice, but not so much choice that people are paralyzed?" she said. "And the right amount of flexibility within those choices that I can address many of the needs that my employees have."

That kind of intentional design requires periodic reassessment. Hoogensen recommended that HR leaders conduct listening tours including surveys, focus groups, or informal conversations, on a regular cadence to ensure the benefits mix continues to reflect the actual workforce. If a significant wave of retirements has lowered the average employee age by ten years, the program design and the communication strategy should reflect that shift.

A four-quarter framework for year-round engagement

One of the most actionable elements of Hoogensen's approach is a quarter-by-quarter engagement framework that Principal has developed for employers and their advisors and which HR teams can adopt directly.

In the first quarter, the focus is on implementation and employee support: helping workers understand and actually use the benefits they selected during open enrollment, reinforcing coverage they may not fully understand, and maintaining access to tools and educational resources while enrollment is still top of mind.

The second quarter shifts to listening - gathering feedback to identify which benefits employees value most, where awareness gaps exist, and where unmet needs might point to new offerings.

By the third quarter, those insights feed into plan design and strategy discussions: evaluating potential changes, weighing new options, and aligning the program with what the workforce has said it needs.

The fourth quarter returns to enrollment and decision support, with communications tailored to different employee groups and delivered across multiple channels including email, internal websites, in-person meetings, and mobile tools.

Hoogensen cited a community credit union that takes this approach seriously enough to produce short TikTok videos helping younger employees navigate their benefits; a low-cost tactic that proved highly effective for that particular workforce demographic.

"Simple doesn't mean ineffective," she said. "Simple can actually be quite effective."

What shrinking HR teams mean for benefits strategy

Principal's quarterly Financial Well-Being Index, drawn from business owners, decision makers, and executive leaders across organizations of two to 10,000 employees, found that 58 percent of employers cite the cost of healthcare as their top concern, with the cost of offering benefits overall second at 50 percent. That financial pressure is directly contributing to HR department downsizing at many organizations, even as the scope of HR's responsibilities continues to expand.

For HR leaders operating with leaner teams, Hoogensen's message is that a strong relationship with a benefits broker or consultant is no longer optional, it is a structural necessity. Advisors who once focused narrowly on plan design and renewal are now functioning as outsourced extensions of the HR function, bringing technology solutions, employee communication strategies, and operational support that stretched HR teams cannot always provide internally.

The technology-human balance

Looking toward 2030, Hoogensen said the benefits landscape will be shaped by accelerating technology adoption including artificial intelligence, alongside a widening talent gap as experienced advisors retire. But she was clear that technology is a complement to human judgment, not a replacement for it.

"We don't view a computer as a trusted advisor," she said. "Generally speaking, it's the human that you're talking to that's the trusted advisor."

For HR leaders, that framing has a direct application. Digital enrollment platforms and benefits administration tools can dramatically improve the employee experience and reduce administrative burden. But the moments that matter most to employees such as a disability claim, a critical illness diagnosis, a new family addition, still require human engagement, human empathy, and human follow-through. Building a benefits program that delivers on both fronts is, Hoogensen argued, what separates employers who retain their best people from those who lose them.