A heightened role for benefits as job market improves
Aflac-commissioned, independent study links job satisfaction to voluntary benefits, wellness programs
By Len Strazewski
Money, money, money. When employers talk about their employee benefits plans, they usually focus on the steadily escalating costs that are driven by high employee utilization and skyrocketing medical technology inflation.
Costs are still the most prominent issue for employers, but as the economy improves, allowing employees greater job mobility, employee recruitment and retention have returned to the spotlight as important drivers for employers rethinking their employee benefits package.
What benefits attract and hold the best employees? How do workers value the benefits they receive and choose the benefits that are optional? These questions may drive the employer decisions of the coming Rebound Economy.
According to the 2012 AFLAC Workforce Report, a new national survey of 2,000 employer decision-makers and more than 6,000 workers, a growing number of workers are quitting or considering quitting their jobs as the economy improves. What holds them back from issuing a pink slip to their bosses? Their benefits, and the special needs they fulfill, they say.
The 2012 AFLAC Workforce Report was conducted earlier this year by Research Now, an international online survey organization with U.S. offices in Chicago, Dallas, New York and San Francisco. The survey was conducted in January and February of this year.
The survey reveals that workers who are most satisfied with their employee benefits package are least likely to be dissatisfied with their employment, but there were several ways in which employee benefits were not yet meeting their needs for better health and a more secure life.
Among other benefits, the survey pointed to wellness programs as a new driver of employee satisfaction. After years of employer support as a cost reduction technique, employees are finding wellness programs to be a positive contributor to their lives and a personally valuable benefit that transcends health care utilization and productivity purposes.
Likewise, voluntary benefits have become important opportunities to meet employees' need for financial security.
In an exclusive e-mail interview, Chris Covill, president of Aflac Benefits Solutions in Columbus, Georgia, pointed to survey findings that agents and brokers can use to help guide employers to better benefits decisions that are consistent with evolving economic conditions.
He notes that the survey indicates that employees who are enrolled or who have access to voluntary insurance feel more secure and better protected when it comes to their health and financial future. Over half (55%) of employees say that voluntary plans have an impact on their job satisfaction, 51% agree that voluntary insurance has an impact on their decision to leave their employer, and 48% say it affects their productivity.
"Employers need to recognize that they must play stronger roles in helping workers expand their protection," Covill points out. "Agents and brokers can educate their clients about the extent to which their workforce may be financially at risk. Voluntary insurance, both individual and group plans, provides supplemental coverage that can make a big difference in employees' comprehensive health benefits and financial protection."
For example, he says that today's workforce is unprepared for unexpected expenses associated with a serious illness or injury. The Aflac study revealed that 28% of employees have less than $500 in savings to help pay for an emergency. In addition, 36% of employees say that they would need to borrow money from friends, family or their 401(k) to help pay for this type of event.
Agents and brokers should capitalize on employees' attention at open enrollment as the most critical time in year-round education campaigns, he emphasizes. "Far too many American workers make avoidable mistakes in benefits coverage decisions. For example, 77% of workers have admitted to making mistakes with benefit options during their open enrollment process."
Covill also says that employees' confusion often results in paying a price in multiple ways, including putting too little in their flexible spending accounts (FSAs) or not electing available benefit options like voluntary insurance. "For instance, 74% of workers say when thinking about their choices for major medical insurance, they only sometimes or rarely understand everything that is covered by their policy."
Benefits specialists also have an opportunity to help business decision-makers understand the mindset of employees and what they consider important, Covill says. The Aflac study indicates that 60% of employees would be likely to apply for voluntary insurance plans if they were made available by their employer. Also, among employees whose employers offer voluntary benefits:
• 60% would be likely to recommend their workplace to a friend, compared to 54% whose employers don't make voluntary insurance available.
• 69% believe their company has a reputation for being a great place to work, compared to 60% of employees at businesses without voluntary insurance.
• 67% believe their employer takes care of its employees, vs. 59% of employees whose employers don't make voluntary plans available.
Wellness programs also have evolved into recognizable benefits that contribute to positive recruitment and retention, according to the survey. The Aflac study examined the prevalence of wellness programs as well as their impact on worker satisfaction, well-being and, ultimately, productivity. "American workers who are offered wellness benefits options and take advantage of them are generally more satisfied and loyal compared to employees who aren't offered wellness benefit options at all," Covill points out.
Specifically, the survey found that:
• 72% of employees who are offered wellness benefit options and take advantage of them, are extremely/very satisfied with their overall benefits package vs. 37% of workers who are not offered wellness benefit options.
• 70% of workers who are offered wellness benefit options and take advantage of them believe that productivity is an important issue for the organization compared to 57% of employees who are not offered wellness benefit options.
• 72% of employees who are offered wellness benefit options and take advantage of them believe that controlling health/medical costs is an important issue vs. 47% of workers who are not offered wellness benefits.
What should you tell clients about promoting voluntary benefits and wellness programs? The Aflac study found that most employees are looking to their employers to educate them about all available benefits options, not just traditional benefits changes or choices.
The study also shows that 48% of employees say they are not very/not at all informed about benefit options offered at their companies, and 44% of employees strongly agree that a well-communicated benefits program would make them less likely to leave their jobs.
"Agents and brokers can underscore the importance of extending beyond core benefit options to marketing and communicating about benefits year-round. When an employer shows it cares about its employees, both parties reap rewards in the form of happier, more engaged, and more productive workers," Covill says.
Len Strazewski has been covering employee benefits issues for more than 30 years. He has an M.S. in Industrial Relations from Loyola University in Chicago.