Annual research from Metlife spotlights a disconnect between the perceptions of voluntary benefits held by employers and employees. About 52% of employees said they were interested in a wider array of voluntary benefits, but only 43% of employers believed their employees felt that way, said Dr. Ronald S. Leopold, national medical director and vice president of U.S. business at MetLife.
Leopold unveiled findings from MetLife's 9th annual "Study of Employee Benefit Trends: A Blueprint for the New Benefits Economy," at its National Benefits Symposium in Washington, D.C., earlier this spring.
Employees clearly see the choice, cost and convenience advantages that voluntary benefits offer, Leopold explained. Across the board, employees in all age groups hold favorable views of voluntary benefits:
• 64% of Gen Y (age 21-29), 66% of Gen X (age 30-45), 62% of "younger boomers" (age 45-54) and 66% of "older boomers" (age 55-65) understand that comparable products outside the workplace cost more.
• 57% of Gen Y, 66% of Gen X , 59% of younger boomers and 61% of older boomers are more likely to choose benefits that meet their personal needs.
• 63% of Gen Y, 67% of Gen X, 64% of younger boomers and 68% of older boomers understand that buying through the workplace is convenient and saves time.
Employees are also willing to pay to personalize their benefits, the study revealed. Moreover, having this choice boosts loyalty to the employer, especially for younger workers: 41% of Gen Y workers and 40% of Gen X employees said that a choice of benefits that meet their needs is "extremely important," along with 30% of younger boomers and 34% of older boomers.
Retirement benefits drive loyalty
In addition, employee loyalty is driven by retirement benefits (64%), and non-medical benefits such as dental, disability and life insurance (59%), the study found. While concerns about retirement savings are felt in all age groups, younger boomers and Gen X workers are most concerned about the adequacy of their retirement savings.
During the recession and the slow economic recovery, American workers routinely heard the phrase "do more with less," Leopold noted.
But the resulting gains in productivity may have come at the expense of employee loyalty, the MetLife study suggests — only 47% of employees feel a very strong loyalty to their employer, a drop from 59% just three years ago.
Moreover, some employers have an unrealistic sense of employee loyalty. In the fourth quarter of 2010, 51% of surveyed employers report that their workers have very strong loyalty to them.
However, 36% of employees say they plan on working for a different employer in the next 12 months.
This erosion of employee loyalty puts employers' retention efforts at risk as the nation emerges from the recession over the next two years and job mobility returns, says Leopold.
Being "delusional" about employee loyalty may sabotage employers' efforts to achieve benefits objectives, Leopold believes. "Employers need to look at their benefits offerings differently — through a new holistic lens — in order to maximize their effectiveness as a retention tool for their unique workforce while meeting other business objectives," he said.
The research confirmed that benefits satisfaction "still strengthens employee loyalty," Leopold told the gathering. Employees who expressed a high satisfaction level with their benefits were about three times as likely to report feeling loyal to their employers than those who express dissatisfaction with their benefits programs.
Leopold cited three "megatrends" that will impact employers' strategic approach to comp and benefits in the future:
1. An acceleration of the economic recovery in 2012-2014. While the economy has taken a toll on business, "what happens when things get better?" he asked.
2. A shift in the demographics of the workforce. This swing, Leopold said, "will drive a diversity of mindset of employees about their benefits."
3. Health care reform. The "genie that's already out of the bottle," in terms of its impact on employers' benefit strategies, will continue to spark change, Leopold noted.
Borrowing a page from Stephen Covey, Leopold offered a list of seven strategies companies can employ to bolster employee retention efforts:
1. Understand what drives employee loyalty.
2. Focus more on nonmedical benefits, especially voluntary benefits.
3. Take a fresh look at benefit communications content.
4. Understand the differences in how employees in different age groups value their benefits.
5. Add a financial wellness dimension to their wellness programs.
6. Do more to help younger employees save for retirement.
7. Understand what the coming demographic changes in the workforce, coupled with an accelerated economic recovery and the impact of health care reform, will have on employee's views of their benefits — and hence, their loyalty to the employer.
John Ortman is the former Editor-in-Chief of Employee Benefit Adviser, EBN's sister title covering news and trends in the benefits broker/consultant market. Contact his successor, Elizabeth Galentine, at email@example.com.
Register or login for access to this item and much more
All Employee Benefit News becomes archived within a week of it being published
Community members receive:
- All recent and archived articles
- Conference offers and updates
- A full menu of enewsletter options
- Web seminars, white papers, ebooks
Already have an account? Log In
Don't have an account? Register for Free Unlimited Access