'Employees are ghosting their benefits because they don't believe they're relevant,' says plan sponsor
HR leaders are being urged to prepare for the quiet crisis brewing in employee benefits as plan members are walking away. They’re not canceling or formally opting out of their benefits plan, they’re simply ignoring what’s available.
It’s become so widespread that plan sponsors and HR experts are calling it the “ghost benefits’ gap, which is affecting – and costing – employers and employees alike.
“Employees are ghosting their benefits because they don’t see them, don’t understand them, or don’t believe they’re relevant,” said Tracey Riccardi, vice president of compensation, benefits and HR systems at Gateway Casinos and Entertainment Limited.
Riccardi’s comments come after ADP Canada’s Happiness@Work August report on employee satisfaction revealed that compensation and benefits received a score of just 6.4 out of 10 — the second lowest among all workplace satisfaction factors for Canadian workers, after options for career advancement with a score of 6.3 out of 10.
The disconnect between what's provided and what's actually used highlights underlying problems with how benefits are designed, communicated, and perceived, leading to the rise of so-called "ghost benefits."
Riccardi sees two main factors contributing to why employees are disengaging from their benefits: poor communication and a lack of ongoing education.
“From a plan sponsor perspective, the growing gap is a sign that traditional communication and design aren’t keeping up with workforce expectations. Addressing it requires simpler communication, with a big push for carriers to do this, personalization so it’s relatable cultural reinforcement, and flexible plan design.”
“Communication is often one time, done through the hiring process or during enrolment and then it’s usually forgotten,” she added, emphasizing that this leaves many employees of what’s available after their hire date or how to use what’s on offer.
Samantha Chow also agrees communication has failed in the workplace, emphasizing the industry has done “a horrible job explaining what these benefits are and how you can utilize them to your benefit,” she said, noting the current approach relies heavily on jargon, leaving plan members guessing whether they need coverage like cancer insurance or critical illness policies.
“You get an email with a link but you truly don't understand. Most people don't. If it’s complicated and complex and I can't easily do it, unless it's a huge benefit, I'm just not going to go through the time," said Chow, global head of life insurance, annuities, and benefits at Capgemini.
That sentiment isn't rare as many benefits, particularly wellness-related incentives are riddled with friction points. Chow described how certain programs offer small financial rewards for routine health checks but also require paperwork from doctors who are already strapped for time. In her view, simply sending a link during open enrollment isn’t enough, especially for younger employees who haven’t yet faced significant financial risk.
“You can't just send a link and say here,” she said. “You have to walk through each product or service with your employee… This is what it does. This is how it works in layman terms.”
Riccardi points to the industry’s language problem, particularly as benefits lingo “is a world of its own and often not understood,” she said.
“Plan design info is often confusing,” added Riccardi, noting that communication tends to be a one-time event like a stack of documents during onboarding or open enrollment which is then quickly forgotten.
But it’s not just poor communication as Riccardi argues that many traditional benefits packages also feel outdated to younger workers
“Traditional benefits don’t resonate with all demographics,” she said. “Younger employees may prioritize wellness, mental health, and lifestyle perks instead.”
Devon Forshner, a group benefits specialist at Co-operators, also emphasized Riccardi’s argument, noting one of the biggest reasons employees are ghosting their benefits is that outdated, “legacy benefits plans” no longer reflect the needs of today’s multigenerational workforce.
“Generally, employers had created a benefit plan 20, 25 years ago and have just made some incremental progress over the years. But what's different now is really the workforce. We've got a multitude of generations in the workplace and there's different needs and wants and it's not fitting in the box that it used to fit. So, why are people ghosting their plans? It just doesn't represent what they need,” he said.
Forshner also pointed to communication being a critical issue. While onboarding is typically well-organized, he believes there’s often little to no follow-up. That’s why he urges employers to dig into workforce data, engagement surveys, and claims trends to identify unmet needs and cautions against assuming low utilization equals low interest.
“There may be a barrier for them accessing coverage,” he noted, while also stressing the importance of thinking about benefits through the lens of employee experience.
“Think about the employee journey,” he said. “What are those moments that employees will need to access the benefit plan and how can you come alongside that?”
Andrea Wynter, vice-president, people at ADP Canada suggests plan sponsors can approach benefits communication much like a brand campaign, using storytelling, visual content, and real employee testimonials to make offerings relatable and memorable.
"When employees hear authentic stories of colleagues who have successfully used some of the personalized benefits offered by an employer, it builds trust and credibility while normalizing engagement," she said.
Chow believes technology can play a critical role in closing the benefits usage gap but only if employers and providers are willing to be proactive. She pointed to several platforms in the US and Canada that integrate disability coverage into policy administration systems. These tools can automatically flag situations where an employee might be eligible for additional benefits based on a medical or absence-related claim.
Additionally, she asserted the entire benefits system needs to move from passive to responsive. Rather than relying on employees to self-navigate, she argues that HR and benefits platforms should be designed to automatically respond to real-life events.
Whether it’s a maternity leave or an accident, those triggers should initiate timely support. Not just for paid time off, but also to flag eligibility for disability or other benefits.
“It should trigger things that help them automatically navigate to the benefits of their benefits,” said Chow.
Meanwhile, Wynter suggested implementing a data-driven personalization strategy. For example, if mental health claims are low but absenteeism rates are high, that disconnect signals an opportunity for targeted outreach highlighting available support resources. Other strategies she highlighted was replacing static documents with live onboarding sessions, benefits workshops, and on-demand video tutorials that guide employees through real scenarios and use cases.
"By analyzing data on benefits utilization patterns, organizations can see which programs are resonating with employees and which may be overlook and then use those insights to refine their outreach and messaging accordingly. These insights allow employers to be more strategic and shift from a one-size-fits-all approach to a more targeted, needs-based approach," she said.
