Position yourself for future growth
As the economy continues to improve, employee loyalty is on the decline. According to the recently released MetLife 9th Annual Study of Employee Benefits Trends, employee loyalty has declined year-over-year and how now reached a three-year low. Yet many employers may be caught unaware by this downward trend. Employer responses show they assume employees feel as loyal today as they did three years ago.
While employers of all sizes saw productivity gains over the past 12 months, proving that many were able to “do more with less,” this short-term gain may have come at the expense of employee loyalty. More than one-third (36%) of employees hope to work for a different employer in the next 12 months.
“Worker loyalty has been slowly ebbing over the last several years, and it is important that employers take action to turn the tide around. The short-term gains employers realized from greater productivity appear to be short-lived and now pose bottom-line challenges as key talent considers other employment opportunities that have arisen as a result of the improving economy,” said Anthony Nugent, executive vice president, U.S. Business, MetLife. “There is no doubt that the rebounding economy will bring more opportunities for employees, especially the high performers. A well-architected benefits offering will play an increasingly important role in retaining employees and positioning organizations for future growth.”
Benefits Build Loyalty
The Study found that employers’ top benefits objectives remain the same as last year: 1) controlling health and welfare benefit costs 2) retaining employees and 3) increasing employee productivity. However, declining employee loyalty indicates that, without careful evaluation, steps to achieve one objective may negate efforts in another area.
Helping your clients understand the factors motivating employee loyalty is key. While employers recognize that salary and wages are one of the most important drivers of employee loyalty, there is a significant lack of awareness of how other benefits are also driving loyalty. For example, 59% of surveyed employees said non-medical benefits such as dental, disability and life insurance are extremely important loyalty drivers, while only 37% of surveyed employers say the same.
* Flexibility and Choice: While nearly all workers were impacted by the recession, they were at different ages and stages of life when it hit. This is translating into workers having different priorities and views about what their benefits should include. Voluntary benefits can help address the diverse employee needs and increase the perceived value of the company’s benefits program. Flexibility and choice through voluntary benefits are a way to deliver personalized and customized benefits to drive loyalty while still managing the bottom line. Perhaps surprisingly, employees across the board highly value these benefits – in fact, nearly two-thirds (61%) of employees report that they value them as a way to obtain benefits that meet their personal needs.
* Communications and the Generations: While a third of employers in the Study said that changing employee communications is not a current priority, communicating effectively is related to improved benefits satisfaction. Among employees who said that their employer improved communications over the past year, 65% felt their employer was loyal to them, compared to 33% of employees overall. Leveraging social media and providing benefits information on mobile devices is one strategy for improving communications for younger employees. While employers seem slow in adoption, the Study found that 42% of Gen Y employees and 38% of Gen X employees would be interested in accessing and receiving benefits information through social networking sites. Similar percentages of Gen Y and Gen X employees are interested in having information available through mobile devices.
* Holistic Health/Financial Wellness: Since employee lifestyle choices contribute significantly to health care costs, disability costs and productivity, it is not surprising that the number of employers offering wellness programs continues to grow. Taking a holistic approach to employee health is a way to address financial health as well. The Study shows that employees who say they are not in control of their finances are more likely to report poor health. Employees are clamoring for help – 52% report being interested in receiving financial advice and guidance through the workplace, and this increases to 81% among those who acknowledge that financial concerns have impacted their workplace attendance or productivity.
* Retirement – Employees Need a Map and Directions: When it comes to retirement planning, both now and in the future, employees need both guidance and access to protection. Over 60% of Baby Boomers indicate they are behind in saving for retirement. The Study also found that approximately half of employees who are behind in saving for retirement are interested in their employer automatically enrolling them in a savings program such as 401(k). In addition, employees have expressed an interest in receiving some, or all, of their retirement income in the form of guaranteed income. However, only 15% of employers said they currently offer annuities.