increasing demand from US employees for enhanced benefits from
their employers. With this trend, workplace distribution is
becoming increasingly important, a reality that has prompted
MetLife to place increased emphasis on this channel.
Charles Davis reports.
Employers underestimate how important benefits packages are to
their employees, a fact insurers should work to capitalise upon by
helping businesses close the loyalty gap with their work forces.
This clear message comes out of US insurer Metlife’s sixth annual
Employee Benefits Trends Study.
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MetLife’s study shows employees are craving more advice and
guidance in their workplace benefits decisions. Providing timely
assistance with such decisions, coupled with effective, informative
communication campaigns can prove effective in maintaining employee
loyalty and increasing retention.
Ronald Leopold, vice-president of MetLife Institutional Business,
told Life Insurance International the company is “turning up the
volume” in its workplace benefits business in response to what it
sees as a realisation among employers and their employees that
benefits and retirement planning are a must in these uncertain
economic times.
“The ostrich has pulled its head out of the sand, but it’s sort of
unsure of where to go now,” Leopold said. “The workplace is keenly
interested in finding out more about ways to expand their benefits
offerings without a lot of out-of-pocket expense.”
The study found significant gaps in perception between employers
and their employees on several key issues. For example, while 72
percent of more than 1,000 employees surveyed by MetLife said
retirement benefits are a “very important” factor in their loyalty
to a company, only 41 percent of the more than 1,000 employers
surveyed believed the same.
Other gaps were found in attitudes about health benefits, which 81
percent of employees and just 60 percent of employers considered
very important, and in other insurance benefits, which 51 percent
of employees but just 41 percent of employers called key to
loyalty.
“There is a sustained and growing look at benefits as a driver of
retention,” Leopold said. “The competition for talent is really
intensifying and employees are more aware of their choices than
ever before.”
The study also suggests the importance of benefits to employees is
growing, with 33 percent of survey respondents saying benefits were
an important factor in attracting them to their current job and 45
percent saying they are an important reason they stay, up from 28
percent and 33 percent, respectively, in last year’s survey.
The workplace plays a vital role in the planning process. MetLife
found 44 percent of employees would like financial planning advice
at work – up from 30 percent last year – and 49 percent
specifically would like retirement planning advice. Over half of
working Americans (52 percent) are now obtaining the majority of
their financial and retirement products through the workplace – up
from 46 percent a year ago, the study found.
When asked about the importance of benefits in retention and
workplace loyalty, employees ranked retirement benefits and
advancement opportunities as tied for the third most critical
factor, behind salary/wages (number one) and health benefits
(number two).
Most important of all
Perhaps most important of all is the study’s finding that benefits
are playing an increasingly important role in employees’ decisions
to remain with their employer. An additional 33 percent of
respondents said benefits were an important factor attracting them
to their current job, up from 28 percent last year.
“In an era in which retention is paramount, understanding the
employee base and its needs, and filling in the gap between
perceived loyalty and actual loyalty is really important,” Leopold
said. “Real risk is increasing, but awareness of the increased risk
is growing as well. Employers have a real opportunity to come to
the rescue, while also doing what they need to do as a business for
future as well as current employees.”
Leopold added more employers are recognising benefits drive
satisfaction. A majority (58 percent) said they believe benefits
play a very important role in employee retention. That percentage
climbs to 65 percent for employers with 500 or more
employees.
The study also indicates that despite rising benefits costs,
employees seem willing to accept paying a larger part of those
costs themselves in order to access a portfolio of benefits
offerings. Employees are indicating a willingness to pay more to
get more. In fact, 44 percent of employees are interested in their
employer offering a wider array of voluntary benefits – up from 31
percent last year.
In spite of the fact that more than half (56 percent) of employees
say they are paying more now for their medical coverage than last
year, benefits satisfaction among employees is up. This year 44
percent of surveyed employees, compared to 39 percent last year,
say they are satisfied with their workplace benefits.
With a significant number of employees approaching retirement,
companies can do more to address the needs of an aging workforce.
As the Baby Boomers begin to retire and/or approach retirement,
employers need to re-evaluate their benefits offerings. The study
reveals that nearly three-quarters (73 percent) of employers that
currently offer retiree benefits expect the dollar amount of these
benefits to increase in the next five years, compared to 63 percent
last year.
Employers are implementing a range of programmes and
accommodations. Large companies outpace smaller employers when it
comes to offering retirement guides, information and training.
About one-third of companies with 500 or more employees offer
resources and programmes for an aging workforce.
However, smaller employers provide greater flexibility for working
part-time in retirement. Among companies that provide
resources/programmes for an aging workforce, 44 percent with two to
499 employees provide part-time employment to retirees, compared to
35 percent with 500 or more employees.
Given that more than half of all employees now receive the majority
of their financial and retirement products through the workplace,
Leopold said the study shows that employer efforts to assist
benefits decisions are proving more crucial.
“It is not enough to just offer a static menu of benefits,” he
said. “This entire business is becoming too important to retention
for employers to stay put.”
