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Leopold unveiled findings from MetLife’s 9th annual “Study of Employee Benefit Trends: A Blueprint for the New Benefits Economy,” at the firm’s National Benefits Symposium in Washington DC March 28.
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.
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:
- An acceleration of the economic recovery in 2012-2014 — the economy has taken a toll on business, “but what happens when things get better?” he asked.
- A shift in the demographics of the workforce, which “will drive a diversity of mindset of employees about their benefits.”
- Health care reform — the “genie that’s already out of the bottle” in terms of its impact on employers’ benefit strategies.
He offered a list of seven steps employers can take to bolster their employee retention efforts:
1) Understand what drives employee loyalty.
2) Focus more on non-medical benefits — especially voluntary benefits.
3) Take a fresh look at your 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.
