Not yet a Member?
HR Magazine is highlighting the next generation of HR leaders.
Is your employee handbook ready for the New Year? With SHRM’s Employee Handbook Builder get peace of mind that your handbook is up-to-date.
30+ HR education programs, including 4 NEW programs on hot topics, are available for registration.
Join us in Chicago for the latest trends and technology in talent management, and what to expect in the future.
Most U.S. employees―young and old―feel that benefits like health insurance, 401(k)-type defined contribution plans and dental insurance are important, and yet:
• Four out of 10 U.S. employees lack any knowledge of how much their health insurance costs.• Of the 60 percent of employees who think they know the cost of their health insurance, just 15 percent were able to provide a reasonable estimate.
• Four out of 10 U.S. employees lack any knowledge of how much their health insurance costs.
• Of the 60 percent of employees who think they know the cost of their health insurance, just 15 percent were able to provide a reasonable estimate.
These were among the findings in a survey of 1,500 U.S. employees by research and consulting firm LIMRA.Survey results were weighted to represent the U.S. labor force (i.e., size of employer, public and private companies, full- and part-time employment and gender).
“One common employer misconception is that older employees value benefits more than younger employees,” said Anita Potter, assistant vice president at LIMRA group product research. “In fact when it comes to benefits, younger employees value benefits nearly as much as older employees. The different values that employees place on benefits appear to be more a function of life experience rather than life stage, income or education levels.”
In general, U.S. employees significantly underestimate the percent of health insurance premiums their employers cover. Conversely, they underestimate the percent of premiums they pay for many nonmedical benefits, according to LIMRA's April 2011 research report What Is $1 Billion an Hour Worth? Employee Perspectives on Benefits.
A Competitive Advantage
According to the survey, 62 percent of employees rated benefits (medical, dental, retirement plans) as the most important factor when comparing job offers from two companies with comparable salaries.
When Considering Job Offers from Two Companies with Comparable Salaries, What Would You Rate as the Top Factor?
Benefits (such as medical, dental, retirement plans)
Paid leave (such as sick days, holidays, vacation)
Competitive salary increases
Location of employer
Fulfillment, work is challenging/rewarding
Personal growth opportunity /career path
Work/life balance (such as flex time, telecommuting)
Employer's growth potential
Monetary bonus (such as incentive bonus plan)
“Overwhelmingly, our research found that employees simply did not know how much their benefits were worth,” noted Potter. “Without understanding the value of their benefits, how are employees making knowledgeable choices about who they work for and the benefits they select?”
As employers continue to shift the rising costs of benefits to their employees (60 percent indicated they would in 2011), employees need to know the price components of their benefits package and what financial or lifestyle changes they will face if any of these components are revised. When an employee understood the current cost of a benefit and the exact amount of the projected cost increase, the survey found, it affected the employee’s decisions about their overall benefits package.
While employees overall are more willing to pay higher premiums to keep their current plans for benefits that they use on a regular basis, such as medical, dental and vision insurance, the study found that one-third of employees are finding it difficult to pay for their benefits. Households with annual incomes under $25,000 are especially vulnerable, but households with annual incomes of $50,000 also report difficulties with paying for benefits.
Stephen Miller, CEBS, is an online editor/manager for SHRM.
You have successfully saved this page as a bookmark.
Please confirm that you want to proceed with deleting bookmark.
You have successfully removed bookmark.
Please log in as a SHRM member before saving bookmarks.
Your session has expired. Please log in again before saving bookmarks.
Please purchase a SHRM membership before saving bookmarks.
An error has occurred
Recommended for you
Choose from dozens of free webcasts on the most timely HR topics.
SHRM’s HR Vendor Directory contains over 3,200 companies