Budget woes are hitting public sector employers hard — and the effects are going to be felt in their employee benefits programs. That's according to a new survey conducted by Colonial Life & Accident Insurance Company with members of the International Public Management Association for Human Resources last month.

The vast majority — 80 percent — of human resources managers responding to the survey said their organization is looking at ways to reduce the cost of their employee benefits plan. In fact, more than half (58 percent) said controlling costs is the benefits program's top priority. The ability to retain key employees and create employee satisfaction rated a distant second priority at 20 percent.

The survey showed public sector employers plan to make significant changes in their benefits programs within the next year, many of them strategies to control costs:

"Budgets are tight and organizations are looking to save money," saysPat McCullough, Colonial Life's assistant vice president, public sector practice leader. "If they can't save through premiums or services, they'll have to reduce head count and nobody wants to do that."

"The results from this survey should enable public sector organizations to anticipate and prepare for any changes they may need to implement in their benefits programs to respond to the current economy," addsSam Wilkins, IPMA-HR president.

Change drives communication needs

Public sector HR managers almost unanimously agree it's important for employees to understand their benefits and appreciate their employers' investment in them, with 89 percent saying it'sveryimportant. However, like their counterparts in commercial industries, they don't think their employees actually do understand their benefits. Just over half — 54 percent — responded their employees have some understanding and only 42 percent said their employees have a good understanding.

"Any time you're introducing changes, especially if it involves cost shifting, a strong communication plan is essential to the success of the entire benefits program," McCullough says. "Public sector employers have a tremendous opportunity to improve benefits communication without raising costs if they partner with a benefits provider that offers communication and enrollment services. It doesn't have to cost them — or the taxpayers — one dime."

A comprehensive communication plan is also important to drive understanding of and participation in wellness programs, McCullough notes. "Wellness programs can have an impact not only on employee satisfaction but directly on the bottom line through reduced claims and absenteeism. But participation tends to be low unless the program is accompanied by good communication."