EMPLOYEE BENEFITS
US employee benefits survey has lessons for the UK
With an ageing population, changing family dynamics and recruitment and retention difficulties, the US economy is facing similar problems to our own. For this reason, the findings of a recent US survey on employee benefits should be of interest to those of us on this side of the Atlantic.
The main themes emerging from the report include a desire on the part of employers to use benefits to aid in the retention of staff while at the same time trying to meet the challenges of increased costs associated with benefits provision.
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Benefits are also seen as a way for companies to gain a competitive advantage over their counterparts with the report recommending that firms take a holistic approach to their benefit offerings to achieve this.
The report is broken down into three sections:
financial concerns
benefits as a driver for business success
the future for benefits.
Financial concerns
As in the UK, the cost of benefits for both US employers and employees has been increasing. This prompted the report to say that employers who pursue innovative ways to improve cost efficiency and reduce the financial burden on employees may gain a competitive advantage.
In particular, both sides are facing increasing healthcare costs while employees are being forced to shoulder more of the burden of saving for retirement.
At the same time, however, current and future skills shortages mean that employers need to find a way of providing valuable benefits without overstretching budgets.
New opportunities
The report adds that the current situation provides companies with the potential to use benefits as a driver for future business success.
For example, one of the most notable findings from the survey was that there was a strong correlation between satisfaction with benefits and job satisfaction. In fact, among employees who were “highly satisfied” with their benefits, as many as 80% indicated strong job satisfaction.
Perhaps in response to the realisation that their benefits packages could set them apart, the report found that US employers are not only adding new types of benefits to their plans, they are broadening their coverage too, even including groups such as retirees and partners.
In addition, to accommodate the changing needs of their employees, the survey says employers should look to a growing range of benefits programmes and options - including financial planning guidance and programmes that aid work-life balance.
Employers should take a holistic approach
In order to realise the opportunities, MetLife adds that employers need to take a holistic approach to benefits provision. To do this, they need to:
develop a clear understanding of the needs of current and potential employees and how benefits objectives fit within the overall business strategy
ensure the benefits package is effectively communicated to and appreciated by employees
offer a flexible choice of benefits - the days of a one-size-fits-all policy have ended.
Today’s workforce is too diverse for a single benefits package and with technology and lifestyle changes, demands for flexible schedules are increasing. The message is that in this environment, companies can only succeed through personalisation, customisation and flexibility.
Other survey findings
Some of the other findings from the report include:
Financial concerns
Some 60% of all US employees who share the cost of benefits say they are paying more in 2006 than they did the previous year.
The top concern among full-time employees (63%) is having enough money to pay bills during a period of sudden income loss.
Only 50% of employees own life insurance for themselves and 58% have disability coverage while for those that do have such coverage, nearly half acknowledge that the amount of their coverage is inadequate.
New opportunities
The report says that current challenges are providing the potential for new opportunities in the future. These include:
The ageing of the US workforce is causing dramatic shifts in employee needs and demands, presenting opportunities for companies that can respond quickly with benefits strategies tailored to these changing needs.
Employers can maximise the effectiveness of benefits without substantially increasing costs, through clear communication of their intrinsic value.
Employers should also gather employee views because an understanding of employee attitudes may reveal that what employers perceive as incidental issues are actually decisive factors.
A holistic approach
In order to win the competition for talent, the report recommends a holistic approach to benefits including:
Personalisation of benefits offerings and an increase in the value of the benefits plan by tailoring it to the needs of an increasingly diverse work force.
Consider supplementing benefits plans with resources and programmes that are specifically geared to the needs of an ageing workforce, such as flexible work arrangements and long-term care insurance.
Adjust the definition of “family” to include the growing share of the workforce living in non-traditional households.
Making sure that top executives both inside and outside the human resources function understand that incremental costs associated with communication and education efforts may result in potential gains in hiring, retention and employee productivity.
Performing a cost–benefit analysis of executive benefits to determine if such a programme could add value to the company’s executive ranks.
A final word
“As companies face a difficult balancing act with potentially conflicting priorities, they cannot afford to view benefits as a cost centre to be minimised. The growing challenge of recruiting and retaining talented workers solidifies the role of benefits as a top strategic consideration for company management and a key point of differentiation among companies competing for talent. This finding suggests that benefits will become a stronger business driver than they have been historically.” – MetLife.
Want to know more?
Title: Study of Employee Benefits Trends: Findings from the national survey of employers and employees, MetLife, 2007.
Methodology: The survey was conducted during the third quarter of 2006 and consisted of two distinct studies fielded by GfK NOP:
employer survey consisting of 1,514 interviews with benefits decision-makers at companies with a minimum of two employees
employee survey questioned 1,202 full-time staff, again in companies with at least two employees.
Availability: A copy of the report can be downloaded free of charge from www.whymetlife.com/trends.
MetLife says it has a “proud tradition of investing in the financial and social well-being of the communities we serve”. For nearly 140 years, it has focused on understanding and serving its customers through various life stages and economic cycles. For more details visit www.whymetlife.com.