EMPLOYEES’ DESIRE FOR WORKPLACE ACCESS TO INSURANCE & SAVINGS PRODUCTS AND ADVICE GROWING, METLIFE STUDY SHOWS; EMPLOYERS UNDERESTIMATE ROLE OF BENEFITS IN EMPLOYEE LOYALTY
NEW YORK, April 07, 2008
The workplace has become the dominant starting point for building a strong financial safety net. According to MetLife’s Sixth Annual Employee Benefits Trends Study, released today, more than half of working Americans (52%) are now obtaining the majority of their financial and retirement products through the workplace – up from 46% a year ago. Growing financial concerns among employees are creating a greater interest in advice and guidance at the workplace – 44% of employees would like access to general financial planning advice at work, up from 30% last year. Nearly half (49%) of all employees also want their employers to provide retirement advice.
"This increased employee appetite for advice at the workplace is a significant development. It presents a tremendous opportunity for U.S. employers to optimize the real and perceived value of their benefit plans. Having a benefit program that meets the diverse needs of their employees – and communicating more frequently about benefit offerings – can result in improved employee retention, which continues to dominate employers' minds as their top benefits objective," said Bill Mullaney, President, MetLife Institutional Business. For the second consecutive year, retention was rated by employers as their number one benefits objective.
Also among the study’s key findings:
- Benefits, Loyalty, & Retention – Employers underestimate how important benefits are to employee loyalty; benefits are increasingly important factors in employees’ decisions to remain with their employer.
- Growing Focus on Retirement and Aging Workforce issues – Employer focus and spending on retiree benefits is expected to increase; employees have strong interest in retirement benefits.
Loyalty & Retention
When asked about the importance of benefits in retention and workplace loyalty, employees ranked retirement benefits and advancement opportunities as tied for the third most critical factor, behind salary/wages (number one) and health benefits (number two). A loyalty gap can be seen clearly with this example – 72% of employees say retirement benefits are an important factor in loyalty, whereas only 41% of employers say the same.
Benefits are playing an increasingly important role in employees’ decisions to remain with their employer. Significantly, 45% percent of employees say benefits are an important reason why they remain with their current employer, up from 33% a year ago. An additional one-third (33%) say benefits were an important factor attracting them to their current job, up from 28% last year.
More employers are recognizing that benefits drive satisfaction. A majority, 58%, believe that benefits play a very important role in employee retention. That percentage climbs to 65% for employers with 500 or more employees.
However, the study also reveals a significant gap between how loyal employers believe they are to employees and employees’ perception of that loyalty. For example, 55% of surveyed employers say they feel a strong sense of loyalty to their workers, whereas only 41% of employees feel that their employers have a strong sense of loyalty to them. As employers look to use benefits strategically to help improve workforce loyalty and retention, it is essential to find ways to close this gap and better understand how benefits are most impacting feelings of loyalty.
The study also indicates that despite rising benefits costs, employees seem willing to accept paying a larger part of those costs themselves in order to access a portfolio of benefits offerings. In spite of the fact that more than half (56%) of employees say they are paying more now for their medical coverage than last year, benefits satisfaction among employees is up. This year 44% of surveyed employees, compared to 39% last year, say they are satisfied with their workplace benefits. Employees are indicating a willingness to pay more to get more. In fact, 44% of employees are interested in their employer offering a wider array of voluntary benefits – up from 31% last year.
"With retention a key business concern, employers are looking to improve employee loyalty more than ever. This year’s data on benefits behaviors show a gap between what employers think will help drive improved loyalty and satisfaction, and what employees are actually looking for. By better understanding what ways benefits drive employee loyalty in an increasingly diverse workforce, employers have an untapped opportunity to maximize the effectiveness of their benefits plans," said Ronald Leopold, M.D., vice president, MetLife Institutional Business.
Growing Focus on Retirement and Aging Workforce Issues
With a significant number of employees approaching retirement, companies can do more to address the needs of an aging workforce. As the Baby Boomers begin to retire and/or approach retirement, employers need to re-evaluate their benefits offerings. The study reveals that nearly three-quarters (73%) of employers that currently offer retiree benefits expect the dollar amount of these benefits to increase in the next five years, compared to 63% last year.
Employers are implementing a range of programs and accommodations. Large companies outpace smaller employers when it comes to offering retirement guides/information and training. About one-third of companies with 500 or more employees offer resources and programs for an aging workforce. However, smaller employers provide greater flexibility for working part-time in retirement. Among companies that provide resources/programs for an aging workforce, 44% with 2 to 499 employees provide part-time employment to retirees, compared to 35% with 500 or more employees.
Smaller employers are less likely to anticipate being affected by the aging workforce. Only 35% of employers with 2 to 499 employees think they will be greatly impacted, compared to 50% with 500 or more employees. One reason could be that employees at smaller companies expect to work until an older age. While the average employee at companies with 500 or more employees is anticipating retiring from full-time work at age 63, the average employee at smaller employers is planning to retire at age 65.
Call to Action
The study suggests that there are three primary strategies that employers can consider to optimize the value of their benefits plan:
Personalization. A one-size-fits-all approach to benefits is no longer effective. Employers should tailor benefits to different employee segments, including older workers, retirees, and other life-stage groups.
Breadth of Benefits. Employers should provide a broad, cost-efficient benefits offering with a wide range of options to meet the increasingly diverse needs of the workforce. This offering can include voluntary benefits, health and wellness programs, work/life balance programs, resources for aging workers, and retirement plans.
Decision Support and Communications. When asked about the importance of benefits strategies to their companies, over half (55%) of employers indicate that "providing better decision support tools" is very important — up from 47% in 2005. Such tools could include product calculators as well as rules of thumb on what products and coverage levels are appropriate. Also, employers should communicate more frequently to employees about their benefits offerings and how to take advantage of them.
"Set against a backdrop of an aging workforce, escalating healthcare costs and an era of personal responsibility, benefits have become increasingly important to both employers and employees. Employees are looking to secure their financial futures and are primed for action. Providing and promoting a robust suite of benefits offerings represents a win-win for employers and employees alike," adds Mr. Mullaney.
The 6th annual MetLife Study of Employee Benefits Trends is available at whymetlife.com/trendspr along with a wealth of other related resources, including interactive polls on the latest benefits issues and access to other MetLife research.
The 6th annual MetLife Study of Employee Benefits Trends was conducted during the third quarter of 2007 and consisted of two distinct studies fielded by GfK NOP. The employee survey polled 1,380 full-time employees, age 21 and over, at companies with at least two employees. The employer survey consisted of 1,652 interviews with benefits decision-makers at companies with a minimum of two employees, representing a mix of industries and geographic regions.
Celebrating 140 years, MetLife is a subsidiary of MetLife, Inc. (NYSE: MET), a leading provider of insurance and financial services with operations throughout the United States and the Latin America, Europe and Asia Pacific regions. Through its domestic and international subsidiaries and affiliates, MetLife, Inc. reaches more than 70 million customers around the world and MetLife is the largest life insurer in the United States (based on life insurance in-force). The MetLife companies offer life insurance, annuities, auto and home insurance, retail banking and other financial services to individuals, as well as group insurance, reinsurance and retirement & savings products and services to corporations and other institutions. For more information, please visit www.metlife.com.