– Short-Term Productivity Gains Had Hidden Costs –
– More Than One-Third of Employees Hope to Change Jobs in Next 12 Months –
While employers of all sizes saw productivity gains over the past 12 months, proving that many were able to “do more with less,” this short-term gain may have come at the expense of employee loyalty. While 43% of larger employers (with 500 or more employees) and 38% of smaller employers (with fewer than 500 employees) reported productivity gains in 2010, more than one-third (36%) of employees hope to work for a different employer in the next 12 months.
"Worker loyalty has been slowly ebbing over the last several years, and it is important that employers take action to turn the tide around. The short-term gains employers realized from greater productivity appear to be short-lived and now pose bottom-line challenges as key talent considers other employment opportunities that have arisen as a result of the improving economy,” said
Balancing Three Benefits Objectives
The study found that employers’ top three benefits objectives remain the same as last year: 1) controlling health and welfare benefit costs, 2) retaining employees and 3) increasing employee productivity. However, declining employee loyalty indicates that, without careful evaluation, steps to achieve one objective may negate efforts in another area.
“Achieving all three benefits objectives is a skillful juggling act, but an effective balance can be found. 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,” said Dr.
The study found that employees who report that they are very satisfied with their workplace benefits are about three times as likely to indicate that they are highly satisfied with their current job and feel more loyal toward their employer compared with those who are very dissatisfied with the benefits program. Among employees who are highly satisfied with their benefits, 76% report being satisfied with their jobs and 71% report feeling loyal to their employers, compared to only 24% and 25%, respectively, for employees who are very dissatisfied with their benefits.
Understanding some of the factors motivating employee loyalty is key. Salary and wages continue to be the most important drivers of employee loyalty, which employers recognize, but there is significant lack of awareness of how other benefits are also driving loyalty. For example, while 38% of surveyed employers believe retirement benefits are important loyalty drivers, 64% of surveyed employees say they are. Similarly, 37% of employers said non-medical benefits such as dental, disability and life insurance are important factors in employee loyalty, while 59% of employees said they are.
Communications and the Generations
Employees have disparate preferences when it comes to benefits communications, indicating a need for a multi-faceted approach. According to the study, more than half (55%) of all employees do not find their benefits materials to be clear and comprehensive, and only about one in four is satisfied with his/her benefits communications. Employees say they would like to see:
- more frequent communications (34%);
- information tailored to life events (39%); and
- benefits information on the internet (44%).
While 70% of employers say they do not use social media, there is an appetite among younger employees for receiving information in this way. The study found that 42% of Gen Y employees and 38% of Gen X employees would be interested in accessing/receiving benefits information through social networking sites (as compared to one in ten Baby Boomers). Similar percentages of Gen Y and Gen X employees are interested in having information available through mobile devices. Although social media use among employers seems slow in adoption – only 8% of employers who do not currently use social media plan to implement use in the coming year – barriers seem minimal. Only:
- 37% of employers said they did not have the resources to implement social media communications;
- 25% of employers did not think employees would use it;
- 23% of employers said they had legal concerns; and
- 15% of employers said they would have technical support challenges.
“While a third of employers in the study said that changing employee communications is simply not a current priority, effective communications can make the difference between benefits that are understood and valued, and benefits that are overlooked and underutilized. Communicating effectively is related to improved benefits satisfaction, job satisfaction and loyalty,” said Dr. Leopold. “Efforts do pay off. Among employees who said that their employer improved communications over the past year, 65% felt their employer was loyal to them, compared to 33% of employees overall.”
Since employee lifestyle choices contribute significantly to health care costs, disability costs and productivity, it is not surprising that the number of employers offering wellness programs continues to grow. Overall, surveyed employers offering wellness programs climbed from 37% in 2009 to 45% in 2010. Among larger employers (500 or more employees), that percentage has grown from 61% in 2009 to 72% in 2010. Nearly three out of four employers (72%) that offer wellness programs say they are effective at reducing medical costs.
Taking a holistic approach to employee health is a way to address financial health as well. The recession has left symptoms of “financial illness” in its wake. The stress of struggling with financial concerns can take a physical toll on employees, contributing to health-related costs, and decreases in employee productivity. The study shows that employees who say they are not in control of their finances are more likely to report poor health. For instance, 68% of employees who say they are in very good or excellent health say they are also in control of their finances, compared to just 7% of employees in fair or poor health. Employees are clamoring for help – 52% report being interested in receiving financial advice and guidance through the workplace, and this increases to 81% among those who acknowledge that financial concerns have impacted their workplace attendance or productivity.
Retirement: Employees Need a Map and Directions
When it comes to retirement planning, both now and in the future, employees need both guidance and access to protection. Over 60% of Baby Boomers indicate they are behind in saving for retirement. Only one in five younger Boomers (ages 46 to 54) and one in four older Boomers (ages 55 to 65) say they have achieved, or are on track to achieve, their retirement savings goals. Over half of employees, including those on the cusp of retiring, are not confident that they know how much annual income their savings will generate once they retire and many are not doing the calculations to find out. Why? Many fear the news will not be positive – four out of ten Boomers don’t think they will have the money they will need. Three in ten Boomers say they don’t know how to determine the figure needed. Nearly three-quarters of employees across all generations (73%) are interested in receiving help from their employers in the form of retirement and financial planning advice.
The study also found that approximately half of employees who are behind in saving for retirement are interested in their employer automatically enrolling them in a savings program such as a 401(k). In addition, employees have expressed an interest in receiving some, or all, of their retirement income in the form of guaranteed income – 69% would like their employer to offer an annuity as part of their 401(k) plan. However, only 15% of employers said they currently offer annuities.
The 9th Annual MetLife Study of Employee Benefits Trends is available at www.metlife.com/benefitstrends along with a wealth of other related benefits resources.
The 9th Annual MetLife Study of Employee Benefits Trends was conducted during the fourth quarter of 2010 and consisted of two distinct studies fielded by