- OIL & GAS
As the U.S. economic outlook continues to improve, employee loyalty is on the decline, according to MetLife’s 9th Annual Study of Employee Benefits Trends, released today. According to the study, 47% of employees report feeling very strong loyalty to their employer, down from 59% just three years ago. Yet many employers may be caught unaware by this downward trend since they believe their employees feel the same loyalty toward them today as they did several years ago. About half (51%) of surveyed employers today believe that their employees have very strong loyalty to them, and half believed the same in 2008.
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. While 43% of larger employers (with 500 or more employees) and 38% of smaller employers (with fewer than 500 employees) reported productivity gains in 2010, 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 J. 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.”
Balancing Three Benefits ObjectivesThe study found that employers’ top three 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.
“Achieving all three benefits objectives is a skillful juggling act, but an effective balance can be found. Employers need to look at their benefits offerings differently – through a new holistic lens – in order to maximize their effectiveness as a retention tool for their unique workforce while meeting other business objectives,” said Dr. Ronald S. Leopold, vice president, U.S. Business, MetLife.
The study found that employees who report that they are very satisfied with their workplace benefits are about three times as likely to indicate that they are highly satisfied with their current job and feel more loyal toward their employer compared with those who are very dissatisfied with the benefits program. Among employees who are highly satisfied with their benefits, 76% report being satisfied with their jobs and 71% report feeling loyal to their employers, compared to only 24% and 25%, respectively, for employees who are very dissatisfied with their benefits.
Understanding some of the factors motivating employee loyalty is key. Salary and wages continue to be the most important drivers of employee loyalty, which employers recognize, but there is significant lack of awareness of how other benefits are also driving loyalty. For example, while 38% of surveyed employers believe retirement benefits are important loyalty drivers, 64% of surveyed employees say they are. Similarly, 37% of employers said non-medical benefits such as dental, disability and life insurance are important factors in employee loyalty, while 59% of employees said they are.
Communications and the GenerationsEmployees have disparate preferences when it comes to benefits communications, indicating a need for a multi-faceted approach. According to the study, more than half (55%) of all employees do not find their benefits materials to be clear and comprehensive, and only about one in four is satisfied with his/her benefits communications. Employees say they would like to see:
- more frequent communications (34%);
- information tailored to life events (39%); and
- benefits information on the internet (44%).
- 37% of employers said they did not have the resources to implement social media communications;
- 25% of employers did not think employees would use it;
- 23% of employers said they had legal concerns; and
- 15% of employers said they would have technical support challenges.
Holistic Health: Financial WellnessSince 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. Overall, surveyed employers offering wellness programs climbed from 37% in 2009 to 45% in 2010. Among larger employers (500 or more employees), that percentage has grown from 61% in 2009 to 72% in 2010. Nearly three out of four employers (72%) that offer wellness programs say they are effective at reducing medical costs.
Taking a holistic approach to employee health is a way to address financial health as well. The recession has left symptoms of “financial illness” in its wake. The stress of struggling with financial concerns can take a physical toll on employees, contributing to health-related costs, and decreases in employee productivity. The study shows that employees who say they are not in control of their finances are more likely to report poor health. For instance, 68% of employees who say they are in very good or excellent health say they are also in control of their finances, compared to just 7% of employees in fair or 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.