Employee benefits long have served as a recruitment, retention and loyalty-building tool for the companies that offer them. However, even as employers make benefits programs available to employees, research indicates that they underestimate how very valuable these programs can be, both for employees' well-being and as a means to solidify the company-employee bond during tough economic times.
Just how much do employees value their benefits? According to a study from Sun Life Financial, employees value their total benefits offerings more than cash, even in a tough economic environment. The nationwide study asked employees to assume they had access to adequate medical insurance, and then to rate the value of certain other benefits, along with cash. Specifically, the survey respondents were to allocate a total of 100 points across seven benefits areas-401(k)/retirement plans, dental insurance, vision insurance, long-term disability, short-term disability, life insurance and long-term care insurance-and cash, based on how much they valued the specific benefit, or the cash. Only 33% of the survey respondents assigned a value greater than zero to cash; in contrast, more than 70% allocated a value greater than zero to each of the other six benefits.
Total Compensation Statements can help tell more of the story.
Of the types of supplemental benefits evaluated in the study, those garnering the most points were dental insurance, 401(k)/retirement plans, vision insurance and group life insurance. However, nearly half of the respondents allocated at least some of their points to six or more benefits, indicating that they value a broad combination of benefits.
Similar findings appear in MetLife's most recent annual Study of Employee Benefits Trends. According to this survey, faced with tough economic challenges, employees place more value than ever on their benefits, and increasingly look to the workplace for help in controlling their finances and their personal and financial risks-even if the workplace benefits that help them achieve this are fully employee-paid. More than one in four (41%) said their workplace benefits were the "foundation" of their personal safety net, and a majority (51%) reported that they obtain most of their financial products through the workplace. Additionally, 56% said recent economic events have caused them to have a greater appreciation of their workplace benefits, and 46% said economic conditions have caused them to take a greater interest in understanding the employee benefits available through their employer-statistics that may indicate employees are more open than in the past to company efforts to engage them in benefits consumerism and personal responsibility.
More than company culture or advancement opportunities, employees cited benefits as an important factor in their loyalty to their employer. According to the survey, 75% of the employees said health benefits were an important factor in their loyalty to the company, while 72% said this about retirement benefits and 69% said this about other insurance benefits. Smaller percentages cited advancement opportunities (57%) or company culture (50%) as reasons to be loyal to their current employer. Interestingly, employers severely underestimated the influence of benefits on employee loyalty:
% Employees Agreeing
% Employers Agreeing
Health benefits influence
Retirement benefits influence loyalty
Other insurance benefits influence loyalty
The message in these two surveys is clear: Benefits are an essential strategic investment for employers. Though most employers spend generously on providing an employee benefits program, this "investment" doesn't always have to involve a large capital outlay. As noted above, employees place great value even on those benefits that they pay for in full, meaning that voluntary benefits-as well as traditional plans-can garner the kind of positive employee response that results in a more loyal, motivated workforce.