MetLife's ninth annual "Study of Employee Benefit Trends: A Blueprint for the New Benefits Economy" is just the latest research showing a disconnect when it comes to how employers and employees perceive voluntary benefits. Only around 43% of employers believed that their employees were interested in a broader array of voluntary benefits. In reality, 52% of employees actually were interested in such.
Whether employers realize it or not, employees of all ages are increasingly seeing the cost, choice, convenience, and other advantages that voluntary benefits offer:
- Gen Y (ages 21-29) - Sixty-three percent understand it saves time and is convenient to buy voluntary benefits through their workplace, 64% understand there's a higher cost to purchase comparable products outside their workplace, and 57% are more likely to opt for the benefits that meet their personal needs.
- Gen X (ages of 30-45) - Sixty-seven percent understand it saves time and is convenient, 66% understand there's a higher cost, and 66% are more likely to opt for benefits meeting personal needs.
- Younger boomers (ages of 45-54) - Sixty-two percent understand there's a higher cost, 59% are more likely to opt for benefits that meet their personal needs, and 64% percent understand it saves time and is convenient.
- Older boomers (ages 55-65) - Sixty-six percent understand there's a higher cost, 61% are more likely to opt for benefits that meet their personal needs, and 68% understand it saves time and is convenient.
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The research showed just how important choice and needs are to employees. They want to personalize their benefits, even if it results in a higher cost. Among each group, 40% of Gen X, 41% of Gen Y, 34% of older boomers, and 30% of younger boomers said it's extremely important to have a choice of benefits that meets their specific needs. The study found that choice boosted employee loyalty, especially with younger employees. Furthermore, it highlighted that retirement benefits, especially among younger boomers and Gen X employees, were drivers of employee loyalty for 64%. Non-medical benefits like Life insurance, Disability, and Dental were drivers of employee loyalty for 59%.
According to the study's findings, employees that expressed they weren't happy with their benefit programs were three times less likely to report feeling loyal to their employer than those highly satisfied with their benefits. Many employees across the United States have been told to do much more, with much less, during the recession and ongoing recovery. While many employers have seen productivity gains, they might have sacrificed employee loyalty during the process. Just a few years ago, 59% of employees felt a strong loyalty to their employer. The recent MetLife study found that only 47% of employees feel such loyalty today.
The study also showed that some employers might not have a realistic view of employee loyalty, as over half of the surveyed employers felt their workers had a strong loyalty to them. In reality, 36% of surveyed employees said they planned to work for a different employer within the year.
It's vital for employers to understand that employee loyalty is strengthened by benefits satisfaction and that it jeopardizes retention efforts when employee loyalty erodes. Of course, being naive about the subject can completely sabotage any efforts to achieve benefit objectives. To meet business objectives and still effectively use benefits as a retention tool, employers should look at their benefit offerings through a holistic lens. Experts recommend that employers keep trends like the acceleration of the economic recovery between now and 2014, shifting workforce demographics, and the future of health care reform in mind.
The following tips can help employers improve their retention efforts:
- Understand employee loyalty drivers.
- Understand how various age groups uniquely value benefits.
- Understand how the approaching trends could potentially change how employees view their benefits and loyalty to their employer.
- Give more attention to non-medical benefits, especially those that are voluntary.
- Examine benefit communication content for any needed improvements.
- Make wellness program additions, such as a financial wellness element.
- Encourage younger employers to save for their retirement.