SMALL BUSINESSES FACE EMPLOYEE LOYALTY CHALLENGES, ACCORDING TO METLIFE STUDY
– Guide Provides Tips for Optimizing Benefits Strategies to Attain Objectives –
NEW YORK – July 25, 2011 – Although tentative, the economic outlook for small businesses shows some signs of improvement. But according to MetLife’s 9th Annual Study of Employee Benefits Trends, small businesses (those with fewer than 500 employees) may now face a new challenge, employee retention, as there has been a significant decline in employee loyalty. In November 2008, 62% of small business employees reported feeling a very strong sense of loyalty toward their employer, but in 2010 that number dropped to only 44%. In fact, 34% of small business employees surveyed would like to work for a different employer. In contrast, small business employers’ perceptions of that loyalty remained essentially unchanged over the last few years with 54% currently believing that their employees feel a strong sense of loyalty to the company.
Benefits Status Quo
During the down economy many small businesses held the line on benefits. The study found that, overall, the percentage of small businesses offering certain benefits remained nearly the same in 2010 as in 2007. For example:
However, the status quo may not be sufficient in a recovering economy. Approximately 50% of surveyed small business employees who are not very satisfied with their benefits hope to be working for a different employer. On the other hand, 72% of surveyed small business employees who are very satisfied with their benefits feel a very strong sense of loyalty to their employer.
“The MetLife study is a reality check for smaller employers who may still be viewing their workforce through rose-colored glasses. Economic recovery will not only present opportunities for employers but also for top performers. One area small businesses may overlook is whether their benefits programs are designed as strategically as they could be. It is not necessarily about spending more, but optimizing offerings to attain three top objectives: employee retention, increased productivity, and cost control,” said Jeffrey Tulloch, vice president, U.S. Business, MetLife.
Voluntary benefits are another option for small business employers seeking a cost-effective way to increase their benefits offerings. The study shows that approximately half of employees find it important to have benefits like life, dental, and disability insurance available to them through the workplace even if they have to pay all of the cost themselves.
Improving Employees Financial Health
While the grants awarded under The Patient Protection and Affordable Care Act (PPACA) may help stimulate small businesses to offer wellness programs, a holistic approach to employee health should also include financial health. Financial concerns can also take a toll on productivity and contribute to stress-related ailments. The study, found, however, that while the majority (77%) of small business employers do not plan to offer financial/retirement planning seminars within the next 18 months, 75% of employees who admitted their productivity was impacted by personal monetary issues would be interested in learning how to address issues that cause financial stress.
Workplace financial advice and guidance can be particularly important in addressing the challenges that Baby Boomers (born 1946-1964) in the employ of small businesses are dealing with in planning for a secure retirement. Few of this demographic (16%) said that they are on track to achieve or have already achieved the right retirement outcome. Nearly two-thirds (62%), of Baby Boomers working for small businesses are very concerned about outliving their savings, and 59% are very concerned about having to work either full- or part-time in retirement. Only 29% of this demographic feel very confident in managing their money in a 401(k) or 403(b) plan and yet these plans are more common at small businesses than traditional pension plans. For example, 19% of small business employers say they offer a defined benefit pension plan, but 61% offer a 401(k) plan.
“It can be a win-win situation when employers utilize and promote programs that can help employees become more financially secure. Employees can mitigate some of their financial stresses and obtain greater peace of mind, and employers can reap the benefits of a more productive and loyal workforce,” said Dr. Ronald S. Leopold, vice president and national medical director, U.S. Business, MetLife. “There is a business value to both a physically and financially healthy employee.”
The findings from the MetLife study are summarized in Small Business Benefits: Address Growing Flight Risk with Benefits-Based Strategies available at www.metlife.com/sbtrends 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 GfK Custom Research North America. The employer survey comprised 1,508 interviews with benefits decision-makers at companies with staff sizes of at least two employees. The employee sample comprised 1,412 interviews with full-time employees age 21 and over, at companies with a minimum of two employees. Of the interviews, 953 were conducted with decision makers at companies with fewer than 500 employees, and 631 interviews were conducted with employees who work for these smaller businesses.
GfK Custom Research North America is part of the GfK Group, one of the world’s largest and most prestigious market research organizations, operating in more than 100 countries. Headquartered in New York City, with 10 offices in the U.S., GfK Custom Research North America provides full-service market research and consulting services in the areas of Customer Loyalty, Product Development, Brand & Communications, Channels, Thought Leadership, Innovation, and Public Affairs.
MetLife is a subsidiary of MetLife, Inc. (NYSE: MET), a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers in over 60 countries. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia Pacific, Europe and the Middle East. For more information, visit www.metlife.com.