Benefits Business
Worker satisfaction linked to voluntary menu
MetLife study proves usefulness of voluntary plans, and what can make them better
By Len Strazewski
Do your clients struggle to recruit and retain new top workers—and build loyalty among their old guard?
Their employee benefits program may be the key—especially new voluntary benefits. The latest benefits industry research indicates that employees are responding more than ever to the social value of their employee benefits and how they meet individual needs.
And their agents and brokers perceive themselves at the forefront of the voluntary benefits movement and expect growing business from their employer clients.
But it's not just the kind of benefits available that matter. How employers communicate and support participation is critical to making programs successful. According to the MetLife 11th Annual Study of Employee Benefits Trends, only about 40% of employees recommend their employer as "a great place to work," but for those who do like their employer, employee benefits are among the top satisfiers.
About 60% of employees who would recommend their employers say that benefits are an important reason why they would want to stay with their employer. More than half (51%) say they are willing to pay more of the cost of benefits in order to have more choice of products that meet their individual needs.
The survey of more than 1,500 employers and 1,400 employees conducted last fall by GfK Custom Research also indicates that more employers are getting the message. About 58% say providing voluntary benefits is a significant benefits strategy—up from only 32% in 2010.
"Companies that are recognized by employees as great places to work appear to be making the connection between job satisfaction and benefits satisfaction," explains Anthony J. Nugent, MetLife executive vice president. He says that with many employees saying they would pay more for a wider range of voluntary benefits, employers clearly have an opportunity to increase benefits satisfaction without increasing their costs.
Just under half of employers who offer voluntary benefits (47%) say they are likely to increase the number of voluntary products they will offer in the next two years. More benefits are likely to build appeal as they cater to a greater range of personal needs.
About 77% of employee respondents said they value benefits geared to their individual needs and nearly three-quarters of respondents say they appreciate convenience and the ability to save time by buying voluntary benefits at work. About 63% said they also appreciate the way employers screen voluntary benefits for best price and quality.
Part of that screening belongs to agents and brokers, and about 70% of benefits brokers say they expect employers to increasingly look to their expertise in recommending voluntary benefits and in communicating the benefits more effectively.
However, employers have yet to satisfy employee appetites for more and more diverse benefits. About 62% of employee respondents say they are interested in having their employers provide a wider range of benefits. Employers aren't all paying attention; 25% say they think their employees are not interested.
The trick is two-fold, the MetLife survey indicates. Employers can still optimize their benefits programs with more voluntary benefits to meet the increasing need. Income protection remains an important employee need that can be provided with voluntary benefits. More than half of employee respondents indicated they are interested in purchasing higher levels of income protection products.
Health products are also popular as a growing number of employees participate in high-deductible health plans with limited ancillary benefits. Gap plans that fill in the lower levels of deductibles and co-payments, catastrophic illness insurance and employee-paid dental and vision care are mainstays of contemporary voluntary benefit programs. Accident and disability insurance, one of the first benefits to be offered through voluntary programs is still popular, the survey indicates.
Improving participation in all products is also important. Less than half (42%) of employers are satisfied with their employee participation levels in voluntary programs, but the survey points to ways to increase interest and sign-up.
About 52% of employers say they believe their communications are very easy to understand but only 43% of their employees agree. More than one-third of worker respondents grade communications "C" or below. So there is plenty of room for improvement.
The survey indicates that employees who rate employer communications higher are three times more likely to be satisfied with their benefits and nearly twice as loyal to their employers.
Technology is one way to improve the reach and participation. Employees appreciate a variety of communication channels, including one-to-one meetings, benefits fairs and Internet-based information and enrollment services.
Three quarters (75%) of employers who offer online enrollment for voluntary benefits and are happy with employee participation say they have an online enrollment experience that compares with a consumer online shopping experience.
Employees are also progressively more interested in non-traditional benefits that meet both lifestyle needs or help offset the costs of products and services that have increased in cost beyond the comfort levels of individual consumers, such as auto insurance, legal services and pet insurance.
What's the hottest new voluntary benefit?
It's not a health or disability-related voluntary benefit, but it may be likely to affect employee income. Education—particularly online educational programs—for employees and their children are finding a positive reception as part of voluntary benefit programs, according to a new poll sponsored by Purchasing Power LLC in Atlanta, a voluntary benefits provider.
College costs continue to rise, and grant and scholarship aid is being replaced by student loans, leaving students with mounting debt. But employers can help offset those costs by providing low-cost educational options.
According to a nationwide survey conducted online for the company by Harris Interactive earlier this year, more than half of respondents said they would be likely to pursue an educational benefit for themselves or their family if provided as a voluntary option.
Harris Interactive polled 2,160 adults, including 1,151 who were employed full-time. The respondents noted their interest in college classes for themselves and SAT/ACT testing preparation for their children.
"Empowering employees with educational benefits can be a valuable addition to the benefits package," says Richard Carrano, president and chief executive officer of Purchasing Power. "Many employers currently provide some form of tuition assistance, but now they can offer a variety of learning options for employees and their families as a voluntary benefit, without further burdening their benefits budget. Non-traditional voluntary benefits like these are becoming increasingly popular with employees because they address employees' real-world lifestyles and financial needs."
Education benefits can provide important value for employers as well as employees. By increasing access to education, employers can build a better prepared, more productive workforce and connect job mobility and income improvement with the successful use and completion of education benefits, the company says.
The author
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.
