Employee benefits programs play a huge role in employee satisfaction, retention and loyalty, with some types of benefits having a greater impact than others. How can life insurance and other voluntary benefits help you build a loyal workforce?
A recent study, the MetLife 9th Annual Study of Employee Benefits Trends, delved deep into how certain benefits impact employee loyalty in the wake of the recession and the changes coming with health care reform.
The following are some key findings from the survey:
- Employee loyalty is not recession-proof. Employers were forced to undertake a variety of cost-control measures during the recession, and employees went along preferring to keep their jobs than hang on to certain benefits or perks. But the recession also took a toll on employees, and there has been a subsequent decline in employee loyalty overall. At the same time, employers are perhaps not paying attention to diminishing loyalty and may be unprepared for a sudden flight of key talent.
- According to the study, employees who report that they are very satisfied with the benefits they receive through work are more than three times as likely to indicate that they are highly satisfied with their current job, compared with those who are very dissatisfied with their benefits program. Those that feel satisfied with their benefits program are more likely to say that they feel a strong sense of loyalty to their employer.
It is not surprising that satisfaction with benefits is associated with greater employee loyalty, and that employers’ benefits dollars work harder when employees perceive their benefits program as valuable. So which benefits provide the most bang for the buck in terms of promoting employee loyalty, and how do voluntary benefits—particularly life insurance—play a role?
The MetLife study found that voluntary benefits where the cost is shared between employer and employee, or even 100% paid by the employee, could have a significant impact on loyalty. Many of these benefits help employees facilitate the process of building financial security—something they may not do on their own. In addition to providing financial advice and guidance, employers can help their employees improve their financial security by providing access to adequate amounts of life insurance.
Consider the following statistics from the study:
- Many employees may be unaware of the risks they face or are fearful that the solution is beyond their control.
- 51% of survey respondents were very concerned about the impact of sudden or premature death on family financial security, but only about two-thirds of those respondents had life insurance coverage, and less than one-third had calculated their income replacement needs.
- 41% of those with life insurance say they may be underinsured, or do not know if they have enough coverage to maintain their lifestyle.
- Employees who own life and disability coverage worry less about financial issues.
- Employees who feel strongly that their benefits reduce worry are more likely to report better health.
The bottom line according to the MetLife study: helping employees obtain adequate income protection has advantages for employers in the form of increased employee loyalty.
- Non-medical benefits including life insurance and other income protection products are very important loyalty drivers for 59% of employees.
- For 91% of employees, the workplace is their primary source for obtaining life insurance, and often the coverage still not enough.
- Employees are very interested in having the opportunity to purchase additional coverage through the workplace if their company makes higher coverage levels available.
Employers can turn to employee-paid options for supplemental life and disability coverage when the employer-paid portion does not provide employees with adequate income protection. The employer provides access to additional benefits without increasing employer-costs, and employees can choose to pay for it if they choose. Increased employee loyalty is the result.
- Nearly two-thirds (61%) of employees reported that they value these products as a way to obtain benefits that meet their personal needs.
- Employees appreciate that they can save money and time when they obtain life insurance coverage through the workplace.
- Employees expect that they would have to pay more if they purchased similar coverage elsewhere.
- Providing choice, convenience and cost is highly important to employees.
One final note: surveyed employers felt that non-medical benefits like life, dental and disability income insurance could become even more significant loyalty-drivers in the post-health care reform era, as employers place an increased focus on income protection as a loyalty-building strategy. These types of programs are a cost-effective way for employers to continue to offer valuable benefits, and they can continue to improve and build upon these benefits in the future.
Do these findings give you “food for thought,” about the benefits you offer to your employees and how they impact employee loyalty? Have you thought about increasing your focus on income protection products as employee benefits in the wake of health care reform? Do you currently offer life insurance protection for your employees? Contact us today to help you build a comprehensive and effective employee benefits program.
