MetLife: Benefits Provide Strong Financial Foundation, Impact Loyalty
With that in mind, benefits brokers and consultants would be smart to help their employer clients increase the focus on the value of employee benefits as a way to boost morale, retain talent and, as a result, drive business success, according to Bill Mullaney, president, MetLife Institutional Business.
"The increased employee appetite for financial advice at the workplace is a significant development, and benefits brokers should take notice," says Mullaney on the heels of releasing MetLife's Sixth Annual Employee Benefits Trends Study. "It presents a tremendous opportunity for U.S. employers and their benefits consultants to optimize the real and perceived value of benefit plans."
Mullaney adds that having a benefits program that meets the diverse needs of employees--and communicating more frequently about benefits offerings--can result in improved employee retention, which continues to dominate as employers? top benefits objective for the second consecutive year.
The MetLife study also found that growing financial concerns among employees are creating a greater interest in advice and guidance at the workplace, as 44 percent of employees would like access to general financial planning advice--a 14 percent jump from last year.
Nearly half (49 percent) of all employees also want their employers to provide retirement advice, which also is a significant number when compared to past years. Today, more than half of working Americans (52 percent) in the study report they now obtain the majority of their financial and retirement products through the workplace--up from 46 percent just a year ago.
The study also found that:
-- Employers underestimate how important benefits are to employee loyalty--as benefits are increasingly important factors in employees? decisions to remain with their employer.
-- There is a growing focus on retirement issues--employees have strong interest in retirement benefits; employer spending on retiree benefits is expected to increase.
While it is not surprising that the majority of 1,380 employees surveyed rated salary/wages and heathcare benefits one and two, respectively, as the most important benefits factoring into loyalty to their employer, it is noteworthy that retirement benefits and advancement opportunities tied for the third most critical factor. Interestingly--and this is a fact benefits consultants can use in working with clients--while 72 percent of employees say retirement benefits are an important factor in loyalty, only 41 percent of the 1,652 employers surveyed agreed--a clear gap.
"Retirement-related benefits have become increasingly important to both employers and employees," Mullaney says. "Employees are looking to secure their financial futures and are poised for action. Providing and promoting a robust suite of benefits offerings represents a win-win for both employers and employees."
Mullaney points out that another dramatic study finding is that benefits are playing an increasingly important role in employees' decisions to stay put. A significant 45 percent of employees say benefits are an important reason why they remain with their current employer--up 12 full points from last year.
In a smaller but still meaningful increase, 33 percent of employees say benefits were an important factor attracting them to their current job, up from 28 percent last year.
From the study results, it appears employers are seeing the strategic value of how benefits can drive employee satisfaction, as 58 percent now believe that benefits play a key role in retention--with the number rising to 65 percent at employers with 500 or more employees.
Yet, even with that positive trend, the MetLife study also reveals a significant gap between how loyal employers believe they are to employees and employees' perception of that loyalty. For example, 55 percent of employers say they feel a strong sense of loyalty to their workers, whereas only 41 percent 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 for consultants to help employers find ways to close this gap, and better understand how benefits deliver the most impact when it comes to employee loyalty," Mullaney says.
Another interesting finding revolves around out-of-pocket employee benefit costs. Despite more than half of employees surveyed (56 percent) having to contribute more for medical coverage than last year, for example, satisfaction with workplace benefits overall was up, from 39 percent to 44 percent.
"The study indicates that employees are willing to pay more to get more," Mullaney notes, adding that there was a double-digit rise (31 percent to 44 percent) in employees who are interested in receiving a wide array of voluntary benefits.
So what "positive actions" can benefits brokers/consultants suggest employers take?MetLife's Mullaney points to three primary strategies that employers can pursue to optimize the benefits plan value:
-- Personalization: One-size-fits-all no longer works. 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 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, more than half (55 percent) of employers indicate that "providing better decision support tools" is very important--up from 47 percent in 2005Such 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.
"For benefits brokers and consultants, the critical strategy of linking benefits with strategic business objectives is also clear. Benefits are moving away from being perceived as purely a cost to be 'managed' and more toward a true competitive advantage. Benefits brokers can position employee benefits as business drivers because employers are beginning to see that connection," Mullaney says.
The 6th annual MetLife Study of Employee Benefits Trends is available at whymetlife.com/broker/trends along with a wealth of other related resources, including interactive polls on the latest benefits issues and access to other MetLife research.
Metropolitan Life Insurance Company, New York, NY 10166
piece is part of our continuing Insights series designed to highlight key products and services to our readers. This paid-for
Insights was written and edited by Risk & Insurance®
on behalf of our marketing partner. Additional
Insights can be found on our Web site at www.riskandinsurance.com/.)
April 18, 2008
Copyright 2008© LRP Publications