Around two thirds (65%) of UK businesses have rated employees' understanding of their benefits as low or very low, a survey by Aon Employee Benefits has found.
At the time of the survey, 86% of the participating UK companies said they handled benefits communications internally.
Aon's 2015 EMEA Employee Benefits Communication Survey questioned 1,149 companies in 28 countries in Europe, the Middle East and Africa.
The survey also found that 51% were planning to inform employees about their benefits via portals within the next 12 months.
Of those surveyed, 72% communicated compensation and benefits packages to employees, this figure excluded communications through payslips.
Meanwhile 53% of companies surveyed were planning to use Total Rewards Statements and 48% were planning to segment their audience to make more of an impact.
The most important reasons for communicating compensation and benefits packages were found to be developing engagement, retaining talent and responding to legal requirements.
Jon Bryant, head of online and communication at Aon Employee Benefits, said: "UK organisations that are satisfied with the impact of their benefit communications have certain things in common.
"They communicate frequently - 53% do it several times a year - and they use a range of media to communicate.
"Sixty-four percent see segmenting their audience and providing targeted information as essential for improving the impact of their communications in the future".
Bryant added: "By providing employees with full financial awareness like this, we believe engagement and understanding of benefits increases.
"For instance, when an employee can see where he or she could save money, perhaps through shopping discounts, they can put more savings towards their retirement."