The American workforce is growing more dissatisfied and disloyal. Companies that fail to respond to those trends are likely to pay a high price. When the job market improves, those companies will lose key workers to competitors—and suffer from reduced employee productivity.
“We are sounding an alarm,” remarked Ronald S. Leopold, vice president and national medical director for MetLife. Leopold highlighted the results of MetLife’s 9th Annual Survey of Employee Benefits Trends at the MetLife National Benefits Symposium on March 28, 2011, in Washington, D.C.
Despite the dire warnings, the study offered some promise: A well-designed employee benefits package can help restore loyalty, drive employee engagement and encourage workers to stay on the job.
That’s especially important now because a significant number of workers are ready to change jobs. According to MetLife’s research, conducted in the fourth quarter of 2010:
• Overall, 36 percent of all U.S. employees said they hope to be working for a different employer in 2011.
• Workers who were inclined to move on cited decreased job security and increased workloads in their current jobs.
The above factors helped drive down job satisfaction and employee loyalty:
• Just 51 percent of employees reported that they were satisfied with their jobs—down from 59 percent in 2008.
• Only 47 percent felt a strong loyalty to their employers—a three-year low, and down from 59 percent in 2008.
• An even lower 33 percent felt that their companies are strongly loyal to them—down from 41 percent in 2008.
Three years ago, in anticipation of an exodus of Baby Boomers retiring from the workforce, companies were focused on retention, Leopold said. But that focus changed for many employers as they became used to a relatively low rate of voluntary turnover during the recession. “Employers are taking their eye off the ball when it comes to human capital,” he said.
Indeed, MetLife’s study suggests that many employers are not even aware of the growing discontent: 51 percent said they believe that their employees have a very strong sense of loyalty to the company. That number has remained essentially the same over the past three years.
These are clear warning signs of problems suggesting that employers should focus on benefits to boost employee satisfaction and engagement. According to the study, employees who are satisfied with their benefits are the most loyal, with 71 percent of those employees reporting that they are very loyal to their employers.
Benefits continue to attract and retain employees, and the importance of benefits to employees across all generations will only increase over the coming year, Leopold predicted. Employees and employers acknowledge the importance of salaries and health benefits to employee loyalty. But other benefits are important drivers of loyalty as well, Leopold said, especially retirement benefits and nonmedical benefits, including life, dental and disability insurance. Yet only about 37 percent of employers recognize this.
“It’s an opportunity for all of us,” he remarked.
Leopold pointed to significant generational differences that will come into play as employers design benefits packages. The study revealed that:
• Older Baby Boomers (ages 55-65) are financially unprepared for retirement.
• Younger Baby Boomers (ages 45-54) are frustrated with their prospects for retirement and could be a threat to workplace productivity.
• Generation X workers (ages 30-45) are the least satisfied with their benefits.
• Generation Y workers (ages 21-29) are anxious to leave.
“We really have four very different perspectives,” Leopold said.
“A one-size-fits-all benefits package is a thing of the past,” the study concluded. “Instead, employers should consider choice, flexibility and customization to engage an increasingly diverse workforce.”
Employers should be careful not to overlook the value of voluntary benefits options, Leopold added. That’s especially true for young workers. Significant numbers of Generation Y and X employees—41 percent and 40 percent, respectively—reported that a choice of benefits that meets their needs is extremely important for creating loyalty.
Communication is the smartest way to leverage a benefits program, Leopold concluded. “If you’re spending money on benefits, you want to make sure your people know about that.”
John Scorza is associate editor of HR Magazine.