METLIFE’S free benchmarking report provides companies with competitive insights into the employee benefits landscapes
At-a-Glance Data Snapshots Help in Aligning Benefits Strategies with Objectives
NEW YORK,– MetLife’s annual Employee Benefits Benchmarking Report, released today, offers insights into how benefits practices differ by geographic region, industry, and company size, as well as how employee needs and attitudes vary across certain demographic characteristics. The report and its companion web-based Benefits Benchmarking Tool provide employers, brokers and consultants an easy way to compare and contrast a particular company’s benefits program against those of its peers and call attention to missed opportunities for achieving benefits objectives.
“Economic and demographic changes in America’s workforce have turned the competition for talented employees into a strategic imperative. At the same time, health care costs continue to absorb the lion’s share of available benefits dollars forcing companies to utilize benefits as effectively and efficiently as possible. The MetLife Benchmarking Report and online tool can provide an invaluable snapshot of the competitive employee benefits landscape and help employers identify how to maximize opportunities in comparison to their peers,” notes Bill Mullaney, president, MetLife Institutional Business.
Employee retention was identified as the most important benefits objective by more than half (55%) of employers overall. The retail industry, in particular, (62%) ranked retention as their top benefits objective. However, employers in other industries that also ranked employee retention as their top benefits objective cited work/life balance as their most important benefits strategy while retail employers identified cost shifting to employees as their primary benefits strategy – revealing a disconnect between objective and strategy.
“A price sensitive industry like retail, which is also confronted with higher than average employee turnover ratios, may find voluntary benefits a potential solution for helping employees with work/life balance without increasing the overall benefits spend,” says Randy Stram, vice president, MetLife Employee Benefits Sales.
The MetLife Benchmarking Report conveys good news for smaller employers who appear to be aligning benefits objectives and strategies. Nearly two-thirds (62%) of employers with less than 50 employees ranked retention as their top benefits objective and work/life benefits as their number one benefits strategy. While all employers name work/life balance as an important strategic goal, the smallest employers put the greatest emphasis on it, with 40% citing work/life balance as their most important strategy, compared to only 29% of the largest (25,000 plus). One-in-four of these small employers are also looking to add a wider array of voluntary benefits compared to approximately one-in-five employers overall.
When it comes to employees’ satisfaction with benefits, there is a disparity by industry. Only 19% of employees in the retail sector are satisfied with their benefits, in comparison to 40% in manufacturing and almost half (49%) in finance/insurance/real estate. While 40% of employees in the services industry say that their benefits communications effectively educate them, only 25% in the retail trade concur.
“Effective communications are essential for increasing employees’ understanding and appreciation of their benefits program – which in turn maximizes the value of benefits programs for employers,” adds Stram.
Size does make a difference when it comes to executive benefits. As a percentage of total benefits expenditures, executive benefits amounted to only 4% for companies with 2 to 49 employees but 12% for employers with 10,000 to 24,999 employees. The smallest companies are hit the hardest when it comes to the percentage of total expenditure toward medical insurance (66%) compared to 52% of those companies with 25,000 or more employees.
Employee Job Type
With different occupations come different attitudes and expectations about benefits. Executives, white collar and blue collar workers all said that medical coverage was their most important benefit. However, while both executives and white collar employees ranked vacation as the second most important benefit, blue collar workers named prescription drug coverage. Vacation was ranked by blue collar workers at number five (preceded by 401(k)/403(b) and dental coverage).
Also of note, one-in-three white collar workers cite sick leave as important while about only one-in-ten blue collar workers agreed. Blue collar employees are also twice as likely to be interested in having long-term care insurance as compared to white collar employees.
Employee attitudes toward benefits are influenced by age, marital status and other life stage factors. While medical coverage was named as the most important benefit by singles, young families (parents of children under age six), baby boomers as well as pre-retirees, the second most important benefit identified varied. Baby boomers and pre-retirees ranked prescription drug cover as second in importance while young families chose 401(k)/403(b) plans and singles chose vacation time.
As another example of life stage influence, 44% of young families say they are worried about affording benefits over the next five years, but other groups appear less concerned – 24% of singles say they are worried. Insights into the mindsets and priorities of employees of different demographics can help employers determine the benefits offerings which will be most appealing to their unique employee population.
Employee attitudes and employer benefits practices tend to vary according to geographic region. Employers in the South are taking the lead in using the internet to administer and communicate the advantages of their benefits plans. Some 59% of employers in the South offer an employee benefits Web site, compared to 52% in the Northeast, 49% in the West and 46% in the Midwest. Product offerings also vary. According to the MetLife report, 71% of companies in the Midwest offer term life insurance for employees while 58% in the Northeast do so.
“Regional variations are as important as—and sometimes more important than industry-specific differences. That’s because experienced job seekers tend to look for employment in their local area first, preferring to switch industries rather than move their families to a new city or region. For this reason, employers should benchmark themselves against regional competitors as well as industry peers,” Stram notes.
For a copy of the annual MetLife Employee Benefits Benchmarking Report as well as to customize a benchmarking analysis using the interactive online tool, go to www.whymetlife.com/benchmarkpr.
The annual MetLife Employee Benefits Benchmarking Report was conducted during the third quarter of 2006 and consisted of two distinct studies fielded by GfK NOP. The employer survey consisted of 1,514 interviews with benefits decision-makers at companies with a minimum of two employees. The employee survey polled 1,202 full-time employees, ages 21 and over, at companies with at least two employees. Totals do not always equal 100% due to rounding.
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