WORKERS ON FOUR CONTINENTS CITE TOP FINANCIAL CONCERNS AS “ENOUGH MONEY TO LIVE ON” AND SUDDEN INCOME LOSS, A METLIFE INTERNATIONAL STUDY FINDS
NEW YORK, November 15, 2008
No matter where they call home, employees’ financial concerns appear to be universal. A MetLife study released today reveals that having enough money to live on and paying bills after a sudden income loss rank among workers’ top financial concerns, according to employees surveyed in the United States, India, Mexico, Australia and the United Kingdom. For employees surveyed in the U.S., India and Mexico health insurance was also among the top three financial concerns.
“While there are obvious country-by-country differences, employers should be aware that similar financial worries plague workers everywhere,” said William J. Toppeta, president of MetLife’s International Business. “At a time when the global war for talent is escalating and as pension reform and large scale demographic shifts are straining traditional safety nets, employers have the opportunity to strategically use workplace benefits in meeting their employees’ needs and accomplishing key business objectives.”
The inaugural MetLife Study of International Employee Benefits Trends surveyed employers and employees in four countries—India, Mexico, Australia, and the U.K.—that represent both mature and emerging economies and differing workplace environments. MetLife has conducted an annual Employee Benefits Trends Study in the U.S. since 2001.
Concerned, but Unprepared?
Despite their concerns, employees are not properly planning for their financial futures, the study finds. Sixty-two percent of employees surveyed in Mexico, 58% in Australia, 40% in the U.S., 22% in the U.K., and 7% percent in India have not taken steps to determine their household’s life insurance needs. Further, the majority of employees in these countries have also not taken steps to assess household income needs in the case of a disability (80% in Mexico, 65% in Australia, 55% in India, and 56% in the U.K. and U.S.).
Similarly, employees in these countries are putting retirement and aging related issues on the back burner. Fewer than half of employees in three countries say they have taken retirement planning steps (43% in Australia, 35% in India, and 21% in Mexico). In the U.K., although 71% of employees report assessing their financial retirement needs and 34% rank “outliving retirement money” as a top retirement concern, only 17% have taken any steps to determine their long-term care insurance needs. Similarly in the U.S., a majority of employees (52%) are concerned with “outliving retirement money,” but only 31% say they have taken steps to determine long-term care insurance needs.
“The lack of financial preparedness in these economies is especially worrisome as life expectancies around the globe continue to rise and pension reform puts more responsibility on employees to fund their own retirements,” said Mr. Toppeta. “The study underscores the critical role that employee benefits play in filling gaps that exist despite national health and retirement systems in many countries.”
New Workforce Realities Create Growing Employee Benefits Demand
The survey reveals that workforce shortages and competition for top talent in mature economies are prompting employers to reconsider their benefits strategies and find new ways to attract and retain highly skilled workers. A majority of U.K. and U.S. employers say retaining (83% and 88% respectively) and attracting (78% and 75% respectively) skilled workers are among their chief benefits objectives. And in Australia, 89% of employers cited retaining employees as a top benefits objective.
In contrast, in emerging economies, employers cite controlling health and welfare benefits costs as top benefit objectives (85% in Mexico, 96% in India), along with increasing worker productivity (99% in Mexico, 96% in India).
As multinational companies continue to expand into new markets, they import their own employee benefit strategies and integrate them into the host nation’s economy and culture. These factors are prompting more multinationals and local companies alike to consider using benefits as a tool to attract and retain highly skilled workers.
Correlation Between Satisfaction with Benefits and Employee Loyalty
The survey reveals a correlation between employees satisfied with their benefits and employees with a strong sense of loyalty to their employers. In the U.S., 72% of employees who are satisfied with their benefits also feel a strong sense of loyalty to their employer. Similarly, in Mexico, employees who work for companies that offer benefits change jobs less frequently—52% of employees surveyed at companies offering benefits have worked for the same employer for the past five years, versus only 39% of employees at companies that provide no benefits.
In the U.S., research has indicated a correlation with benefits satisfaction, job satisfaction and employee loyalty. This year there was a considerable increase in employee job satisfaction, 80% this year, versus 65% last year, among employees who are ‘highly’ satisfied’ with benefits.
“We hope that the insight we have gained in the U.S. on effective ways that benefits can meet employees’ needs and employers’ objectives can provide valuable lessons for employers abroad and expanding into other markets,” said Bill Mullaney, president, MetLife Institutional Business.
Other Key Findings Include:
- Work-Life Balance: A Global Concern -- Not surprisingly, employees in emerging economies place different emphasis on certain financial and job-related concerns than those in developed economies, but nearly all place a high value on work-life balance. More than seven in 10 employees in India (73%) and Mexico (71%), and four in 10 employees in the U.S. (45%) and U.K. (41%) and more than half (55%) of Australian employees cited having “more time to spend with their families” as a chief concern. In fact, nearly all employees in Australia (87%) consider “flexible working hours” as one of the “most important benefits.”
- Product Ownership at Workplace is Low, But Supply is Limited– Excluding the U.S., employees in the surveyed countries are not offered much opportunity to take advantage of the convenience and group rates associated with financial products offered in the workplace. Whereas, in the U.S., employees generally own 6.9 products in the workplace, in the U.K., Australia, India and Mexico, employees generally own 2 or less products from the workplace. And, in these countries, the primary reason employees cite for not purchasing products at the workplace is that employers don’t offer them (72% in India, 87% in Mexico, 69% Australia, 61% U.K.).
- Emerging Economies Looking for Voluntary Benefits at Work – Both employees in India and Mexico understand the advantages of voluntary benefits (for which employees pay 100% of the cost). Sixty-six percent of employees in India see the advantage of voluntary benefits as “more convenient than buying products on their own.” Sixty-eight percent of employees in Mexico see “payroll deduction helping me to be more disciplined” as the advantage of voluntary benefits.
- Despite Age Wave, Not Prepared for Long Term Care – In four of the countries, few employees have taken any steps to determine household long-term care needs – 17% in the U.K, 11% in Mexico, 31% in the U.S. and 36% in India. The U.K. has the oldest population surveyed, with the median age of 38.9 years, followed by the U.S. at 36 years, while India and Mexico have younger populations, with median ages of 23.8 and 25.6 years respectively, according to U.N. statistics. However, the cultures of India and Mexico traditionally place the burden of caring for elders on the younger generations who may need to think about long-term care costs for their loved ones.
The MetLife Study of International Employee Benefits Trends provides insight into the financial needs, habits and perceptions of employees in India, Mexico, Australia and the U.K. as well as details about the benefits objectives and practices of employers. For copies of this study and the 5th annual MetLife Study of Employee Benefits Trends in the U.S., please visit www.whymetlife.com/internationalpr.
The first-ever MetLife Study of International Employee Benefits Trends was conducted between November 2006 and March 2007 by GfK Custom Research in India, Mexico, Australia and the U.K. The employee survey polled 2,507 full-time employees beginning at age 18, including a mix of men and women at different employer sizes in each country. The employer survey consisted of 1,275 interviews with benefits decision-makers at companies with differing number of employees, representing a mix of industries and geographic regions.
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 U.S. (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.