Insurance Insights: The Cleary Insurance Blog

MetLife, the well-known insurance and financial services company, has released its Tenth Annual Survey of Employee Benefits Trends. The survey, conducted in the fall of 2011, included the results of 1,519 interviews with benefits decision makers at companies with staff sizes of at least two employees, as well as 1,412 interviews with full-time adult employees age 21 or older, nationwide.

Highlights

Among the key findings of the survey:

• More than half — 52 percent — of employee’s ages 21 to 30 are very worried about running out of money in retirement. This is a significant increase from 2003, when only 33 percent of employees in this age range expressed the same worry. This indicates how heavily the more difficult economic environment has been weighing on younger workers.
• Workers are less focused on savings growth now and more focused on creating a reliable income stream compared to survey participants ten years ago. This indicates that annuities may have more of a place in employee retirement plans than they did in prior years.
• Voluntary benefits — funded via payroll deductions — are much more prominent now, with tremendous growth at smaller employers. In 2003, voluntary payroll-deduction plans were primarily found at large employers. Now even very small employers are increasingly offering these plans as employee benefits.
• There is a strong correlation between satisfaction with benefits and overall job satisfaction. It is very uncommon for employees to report being satisfied with their jobs while being unsatisfied with their benefits packages, and vice versa.
• The vast majority of employers — 70 percent — plan to maintain or improve their benefits packages, despite the comparatively weak economy. Thirty percent anticipated doing so by increasing employee costs, however.
• Forty-one percent of employers report that voluntary benefits are a significant part of their employee-retention strategy. This is a significant increase from the 32 percent that reported the same a year ago.
• Employees are more appreciative of the value of their benefits packages than they were in years past.

Some of the survey’s findings indicated challenges for today’s employers. Overall, employee loyalty to current employers was lower than it has been for seven years, and fully one-third of employees were hoping to be working somewhere else within a year. Younger employees were significantly more likely than older employees to report wanting to jump ship. In part, this is because 60 percent of companies did in fact reduce head count during the recent economic downturn. Younger employees may have little experience in the workplace beyond this last period of austerity, when companies were actively slashing payrolls, increasing workloads for remaining employees, and cutting benefits.

That said, younger employees are looking more to employee benefit packages to help them achieve their financial objectives than their older cohorts did at the same age.

Workers also rely on their employers even for basic insurance coverages that prior generations routinely bought outside of the workplace. Although their parents bought life and disability insurance at the kitchen table from an agent, over 60 percent of today’s employees get their life insurance coverage and disability coverage through work.

The influx of Generation Y workers, or millennials, now in their 20s, is profoundly affecting the overall employer-employee relationship. These younger workers anticipate more career mobility than their forebears and are less trusting of companies’ commitment to them as workers, perhaps because much of their adult lives has been spent working in an era in which companies were going out of business or cutting back in large numbers. But Generation Y and X workers are more eager for financial education and financial planning services via their employers than previous generations were.

The MetLife survey also found that a significant fraction of employees — 25 percent — were substantially behind in their financial planning objectives. But a recent survey from CreditDonkey indicates that the problem may be even worse than MetLife found: Some 40 percent of Americans don’t have $500 in savings.

Conclusion

Among the most significant findings of the survey was the growth potential in the employer relationships with younger workers. While Generation Y workers are less loyal to their current employers, they are also significantly more likely to value benefits than their forebears were, and more than six in ten reported that they were relying on their employee benefit packages for their long-term financial health. That was true of 55 percent of Generation X workers, 42 percent of younger boomers, and 31 percent of older boomers.

So there is an opportunity there for employees to cement their relationships with younger workers. But they haven’t yet closed the deal.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your business objectives, takes into account state and federal laws, and capitalizes on incentives and innovative solutions now being offered.