How Can I Win Domestic Partner Benefits at My Company?
Answered by Kim I. Mills, HRC's former education director. May 8, 2001
Winning domestic partner benefits
Q: Dear Kim,
I am reasonably open at work. All of my staff know and enjoy the company of my companion of six years and people I work with know my life circumstances. Because of my openness and success at the company, the human resources director has asked me to prepare a proposal for domestic partner benefits. I have viewed your WorkNet database of banking companies, state employers and Fortune 500 listings.
I was wondering if there is any information available on the financial impact on companies offering such benefits, and the benefits that the company can derive. There are the obvious recruiting and retention issues, but how best can I sell these? In other words, what does it mean to our owners and what is in it for them? Any help you can offer in pointing me toward those statistics either on your web site or elsewhere would be appreciated.
This is a conservative company in the Bible Belt, so my journey is an uphill one. I appreciate any suggestions that you might be able to offer.
Sincerely,
Steve
A: Dear Steve,
Congratulations on opening the door to domestic partner benefits at your bank. The climate sounds somewhat promising -- so let's see if I can help arm you with the statistics that will make a sound business case.
There is a lot of good information regarding the low cost to employers. HRC WorkNet has a document on the cost of domestic partner benefits. You should certainly make that part of your presentation. But to summarize quickly here, most studies have shown that enrollment rates tend to be in the 1 percent to 2 percent range. Employers that offer benefits to opposite-sex couples as well as same-sex will experience enrollment rates at the higher end of this range. A 1995 survey of employers by the International Society of Certified Employee Benefits Specialists found that 75 percent of companies with domestic partner policies reported an enrollment rate of 2 percent or less. Similarly, several other studies have shown low enrollment rates:
• A 1993 Segal Co. report found that typically less than 2 percent of eligible employees enrolled.
• A 1996 Towers Perrin report found that less than 1 percent of eligible employees have enrolled their partners, and medical claims rose by less than 1 percent after domestic partner coverage was introduced.
• A 2000 study by Hewitt Associates found an average of 1.2 percent of eligible employees elected coverage for a domestic partner and that 85 percent of employers reported a cost increase of less than 1 percent.
I also suggest you take a look at the website of the Institute for Gay and Lesbian Strategic Studies, which has a DP benefits calculator, along with other statistical information.
There are not a lot of good data on recruitment and retention. However, a 1999 survey by the Society for Human Resource Management/Commerce Clearing House found DP benefits were the No. 1 recruitment incentive for executives and the third most effective recruitment incentive for managers and line workers. In that study, domestic partner benefits were viewed as more effective in enticing new hires than such perks as the option to telecommute, hiring bonuses, stock options and 401(k) plans. At HRC, we helped to conduct a small pilot survey a couple of years ago and found that the gay and lesbian employees we polled said if they had to go work at a company without DP benefits, they'd want an average of about $7,000 a year to make up the difference -- even though you or I could buy a policy ourselves for less than half that on the open market.
You're definitely on the right track by checking out the competitors. We have seen a trend over the last two years toward more and more banks offering these benefits -- even among conservative companies and those in the Bible Belt! Good luck in your efforts -- and let us know when you succeed.
Best,
Kim I. Mills
Mills is HRC's education director and oversees HRC WorkNet.
May 8, 2001