Introduction
The second MetLife Study of International Employee Benefits Trends expands on the inaugural edition in 2007 and reports on the results of our survey of both employers and employees across five countries that serve as a representative sample of different economic and workplace environments. Two of the countries – the United Kingdom and Australia – are mature economies. The other three – Brazil, India and Mexico – are emerging markets with large populations and growing economies.
The findings of the Study provide insight into the financial needs, habits and perceptions of employees in each of these countries, as well as detail about the benefits objectives and practices of employers there.
Employers considering ways to improve the quality and effectiveness of their employee benefits plans can gain valuable insights by examining the experiences and practices of companies in their home markets and in other countries.
Australia
Although optimistic about the future, Australians workers of all age groups are concerned about their short- and long-term financial wellness. Many worry about covering current expenses and the majority are not saving enough for retirement. The majority of Australians have not taken steps to address their financial security concerns and ownership of financial protection products beyond simple life insurance and some income protection coverage is quite low.
Only 41% of those surveyed have taken steps to determine their household’s level of income protection needs, even though almost two-thirds of those surveyed aged 41-50 cited a disabled principal wage earner as their highest financial worry.
Contributing to this low ownership rate is the fact that few products are owned through the workplace, primarily because most superannuation funds and employers do not offer such benefits, including those to supplement retirement savings:
Australian companies, moreover, are facing a potential labor shortage in the coming two years. This challenge also presents an opportunity both for companies to augment the benefits they provide in order to boost both employee attraction and retention and for all sides to consider the expansion of employer-provided benefits and other programs as the primary remedy on the road to financial security.
For additional information, please visit us on-line at www. metlife.com.au
Brazil
Brazilians lead Latin America in terms of consumer optimism and employees said their financial situation would improve in six months. Despite this optimism, our findings show that the average Brazilian worker also has serious financial concerns. Brazilians are plagued by high levels of debt and concern about an inability to pay monthly bills.
Two-thirds of Brazilians employees are worried about a variety of financial issues, including paying for their children’s education, making ends meet if they lose their job, and being able to pay medical bills.
In general, Brazilians own few financial products. A savings fund is the frequently owned product, but barely half of those surveyed even have this basic instrument. Many rely on their employer for the benefits. Of those who do not own any products, 71% of those surveyed said that this is because their employer does not offer them.
Saving for retirement is also a growing issue. The average Brazilian worker intends to retire at 56 years; yet only three in 10 have taken any steps to determine their retirement income needs and only one in four has a private retirement plan. This is an opportunity for benefits providers to work with companies on financial planning and education for employees, who have expressed an interest in obtaining advice. As the middle class grows in Brazil, the market for income supplements to the government pension could also increase.
For additional information, please visit us on-line at www.metlife.com.br
India
Increasing employee productivity (91%) and controlling health and welfare benefit costs (88%) are the top two benefits objectives of those companies providing benefits in India. This is slightly down from the 96%, respectively, in our 2007 study. While also of high concern to employers, attracting and retaining employees nevertheless rank near the bottom as reasons to offer benefits.
With the exception of health and critical illness insurance, less than half of all employers offer any other products.
Indians are acutely concerned about their financial security but own few financial products and are not taking steps to protect themselves. Only 45% of Indian employees have assessed their household’s health insurance needs, although this increases to 62% for employees 51 years and older.
Those employers who offer benefits are more likely to reap the reward of higher worker productivity, the study found. While 57% of all companies said productivity had increased in the past year, the number jumps to 68% for those companies offering benefits.
With the majority of employees both concerned with and unprepared for retirement, companies should consider providing retirement planning services and financial education as a benefit option.
For additional information, please visit us on-line at www.metlife.co.in
Mexico
As in our 2007 study, there is a strong correlation between employer-provided benefits and job satisfaction and loyalty to one’s employer. The top benefits’ objective for Mexican employers is to increase productivity (for 97% of all employers), with the second main goal of improving job satisfaction (for 91%)—both results are essentially unchanged from three years ago. These objectives and percentages, our study shows, are essentially the same for employers who do not offer benefits.
Average life expectancy in Mexico is 76 years, and, given this longevity, Mexicans are justifiably concerned about retirement. But more than one-third of those surveyed (36%) don’t know at what age they will retire. For those who expect to retire, the median age they cite is 60 years. But 69% of Mexican workers are worried they will outlive their retirement savings and only 40 percent of Mexican workers have done any retirement planning.
More than half of Mexican employers mentioned that they would like to shift the costs of benefits to their employees. Benefits providers can work with employers to find ways to pass on some of the cost to employees, but they will have to be mindful not to discourage employees from purchasing the products. Education can be a useful tool for benefits providers in this regard.
Companies and benefits providers should also take into account the significant regional differences that exist in Mexico’s key urban industrial centers that were surveyed: Mexico City, Guadalajara, Monterrey and Leon (new for the 2011 study).
For additional information, please visit us on-line at www.metlife.com.mx
UK
Even with the uptick in the economy in the U.K., concerns over job security increased 5% from the 2007 study, with 52% of U.K. employees saying they were worried about losing their employment.
The recent economic crisis continues to cause some anxiety in the U.K., especially among older workers. About a third of all workers over the age of 51 and between 41-50 years old said they were worried about rebuilding their retirement nest egg following the recent meltdown in world markets. Younger workers had no such high level concerns, given their longer time horizon for savings.
Employees also need to understand that there might be an income difference between the traditional defined benefit plan from their employer and the coming defined contribution system that they will have to actively invest in. This is an opportunity for benefits providers – such as those offering guaranteed income through annuities and other products – to offer workers in the U.K. solutions for any gaps in retirement income.
For additional information, please visit us on-line at www.metlife.co.uk
Study Methodology
Learn more about the study methodologyMethodology
The second MetLife International Employee Benefits Trends Study was conducted between November 2010 and February 2011 by GfK Custom Research, one of the top global market-research consultants. Results were obtained through face-to-face, telephone and online interviews. The targeted sample for each country was designed to appropriately represent the full-time employee population base.
Interviews were conducted with 258 employers. Eligible respondents were those dealing with employee benefits or employee policies in companies with 2+ employees.
A total of 501 interviews were conducted of full-time employees in companies with 2+ employees
Interviews were conducted with 250 employers (193 offering benefits and 57 not offering benefits). Eligible respondents were those dealing with employee benefits or employee policies in companies with 50+ employees.
A total of 500interviews were conducted of full-time employees in companies with 50 employees
Interviews were conducted with 534 employers (274 offering benefits and 260 not offering benefits). Eligible respondents were those dealing with employee benefits or employee policies in companies with 100+ employees.
A total of 1,090interviews were conducted of full-time employees in companies with 100+ employees. 549 worked for companies that offer benefits; 541 for companies not offering benefits.
Interviews were conducted with 250 employers (125 offering benefits and 125 not offering them). Eligible respondents were those dealing with employee benefits or employee policies in companies with 50+ employees.
A total of 439 interviews were conducted of full-time employees in companies with 50+ employees. 223 worked for companies that offer benefits; 216 for companies not offering benefits.
Interviews were conducted with 150 employers (123 offering benefits and 27 not offering them). Eligible respondents were those dealing with employee benefits or employee policies in companies with 10+ employees.
A total of 500 interviews were conducted with full-time employees in companies with 10+ employees. 317 worked for companies that offer benefits; 183 or companies that did not.
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