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An overwhelming majority of employers expect the competition for talent to increase or remain at current levels over the next 18 months, and they are relying more on the benefits they offer as a way to recruit and retain workers, according to a national survey of benefits decision-makers and full-time U.S. workers.
For the first time in the five years that MetLife has studied workplace benefits, employers said keeping key employees, not controlling costs, is the primary objective of their benefits package.
The 1,514 benefits decision-makers interviewed for the survey were at organizations with a minimum of two employees. The majority (61 percent) of employers surveyed had fewer than 500 employees; 20 percent had 5,000 or more employees.
More than half (55 percent) of the benefits decision-makers agreed that retaining employees is the main goal in creating a benefits plan, vs. less than half who said this in 2003. Controlling costs was a close second.
The MetLife Study of Employee Benefits Trends found that among employees who considered themselves “highly satisfied” with their job, 80 percent reported being “highly satisfied” with their benefits. That’s up from 65 percent from the previous year’s study.
Seventy-two percent of the 1,202 workers cited workplace benefits as the reason they joined their current employer, and 83 percent cited it as one of the reasons they remain.
“The strong relationship between benefits satisfaction and job satisfaction indicates that there is more pressure than ever on employers to strike this balance and utilize benefits strategically to achieve both objectives,” MetLife’s vice president, institutional business, Dr. Ronald Leopold, said in a press release.
Benefits as Business Drivers
Companies “cannot afford to view benefits as a cost center to be minimized,” the report said, suggesting that benefits will “become a stronger business driver than they have been historically.”
“For employees who are assuming greater fiscal responsibility for their health care decisions, retirement planning and overall financial protection, workplace benefits offerings can be critical for helping them build a safety net based on their personal situation,” MetLife’s Leopold said.
Employers are finding that it’s no longer enough to simply add new types of benefits to their plans, according to findings from the survey, which was conducted in the third quarter of 2006.
With that in mind, employers are trying to set themselves apart and build loyalty among current workers by broadening coverage to include retirees—31 percent offer health insurance, 22 percent offer life insurance and 18 percent offer dental insurance—and to domestic partners.
About 50 percent of Fortune 500 companies offer domestic partner health benefits, up from 43 percent in 2004, the report said.
Individual disability insurance and optional/supplemental life insurance are the most popular executive benefits for companies of all sizes, followed closely by long-term care and group universal life insurance.
Employers need to develop a clear understanding of the needs of their current and potential employees, keeping in mind that employees weigh the workplace benefits differently when deciding to take a new job depending on what life stage they are in, the report said.
For example, workplace benefits were a top consideration for joining their current employer for nearly one-third (32 percent) of married employees and 41 percent of parents with children under the age of six. That’s true for only 10 percent of single employees.
In 2006 and 2005, 39 percent of all employees were very satisfied with their benefits, with families the most satisfied and singles the least satisfied with their benefits.
Employers need to understand how benefits objectives fit within their overall business strategy, the report said. “The value of workplace benefits,” Leopold observed, “has never been greater.”
Kathy Gurchiek is associate editor for HR News . She can be reached at firstname.lastname@example.org
Take Steps To Relieve Common Benefit Communication Failures, SHRM Online Compensation & Benefits Focus Area, March 2007
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