By Cyril Tuohy
A MetLife study of employee benefit trends has found that benefits are the most often cited tool employers use to retain workers and to boost their productivity as competition heats up in a tightening labor market.
The study found that 41.1 percent of employers considered retention as their top employee-benefits objective, 37.3 percent considered health and welfare benefit costs as their top benefit objective and 35.1 percent saw increasing employee productivity as their top objective.
The retention aspect of employer-sponsored benefits should come as little surprise to corporate benefit experts. Bureau of Labor Statistics data show the national unemployment rate declining from a high of 9.7 percent in March 2010 to 5.5 percent in March of this year as the U.S. economy recovers.
April’s unemployment figures will be released Friday.
Todd Katz, executive vice president of Group, Voluntary & Worksite Benefits for MetLife, said in a news release that offering a comprehensive suite of benefits beyond primary medical “can drive both loyalty and engagement without adding cost for the employer.”
Benefits are a widely-used tool for employers who use them as a lever to attract and retain workers. Employee surveys indicate workers value employer-sponsored benefits as they are convenient and often cheaper to buy because of group rates.
MetLife’s most recent survey findings were issued in the company’s 13th Annual Employee Benefit Trends Survey. The findings confirm the relationship between a company’s ability to offer strong employer-based benefits and that company’s ability to keep employees and tamp down on turnover.
But in order for benefits to serve as an effective retention strategy, employers need to offer a suite of benefits. Employers who offer a dozen or more benefits are most likely to retain their workers’ loyalty.
The survey found that 18 percent of employees working for companies offering five or fewer benefits said they intend to stay at their employer. Meanwhile, 30 percent of employees at companies offering 11 to 15 benefits said they intend to stay.
MetLife’s latest survey also found that standard benefits such as medical, prescription drug, dental and vision coverage are quickly becoming table stakes. Voluntary benefits such as critical illness, accident, hospital indemnity and cancer overage can make the difference between an employee choosing one employer over another, MetLife said.
“Throughout the study, the positive impact of the number of benefits an employer offered was clear,
likely because the greater number of options provides employees with the opportunity to tailor benefits to their specific needs,” Katz said.
Benefits experts also point to the benefit mix as an important variable in the employer-sponsored benefits equation.
Research published in February by the Employee Benefits Research Institute (EBRI) found that nearly 70 percent of workers said they were satisfied with the mix of wages and benefits they received.
But the number of respondents who said they would give up benefits for cash nearly doubled, from 10 percent in 2012 to 19 percent in 2014, the EBRI survey also found.
“This growing interest in trading benefits for wages may reflect an intensifying desire for real wage growth in the wake of the Great Recession,” said Paul Fronstin, director of EBRI’s Health Research and Education Program.
InsuranceNewsNet Senior Writer Cyril Tuohy has covered the financial services industry for more than 15 years. Cyril may be reached at [email protected].
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