Benefits a Major Factor in Employee Retention

In a study by MetLife, 55 percent of employers identified employee retention as a top objective in putting together a benefits plan. The survey was based on responses from 1,202 full-time employees and interviews with 1,514 benefits decision makers.

For the past five years, MetLife has conducted the same survey. In prior years cost has been identified as the top priority, but in 2006, employee retention surpassed cost as the major issue.

Among employees, MetLife found a distinct correlation between job satisfaction and benefits satisfaction. Among employees who were "highly satisfied" with their benefits, 80 percent indicated strong job satisfaction.

Seventy-two percent of employees said workplace benefits were a reason for joining their current employer, and 83 percent said it is a factor in remaining there.

With such a strong connection between benefits and employee satisfaction, employers should be focusing on two areas:

1. Finding a balance of a quality benefits package that keeps costs reasonable for the employer and employee
2. Adequately communicating plan features, enrollment instructions and how best to use

With rising health care premiums, many employers are not investing the time or dollars to educate their employees on the value of their benefits. As a result, many employees underestimate the value and take their benefits for granted.

A comprehensive communication plan would help employees understand their insurance, savings and retirement needs so they can make more informed decisions.

Informed employees are likely to be more satisfied employees. Satisfied employees means less turnover, and less cost dedicated to recruitment, onboarding and training.

Comments

[Claire]

I've seen employers send out annual total comp statements for employees that itemize how much the employer values them. It includes comp, cost of benefits, stock, bonus, etc. Shows that employers can pay up to sometimes twice your base.

[Samantha]

The problem many comapnies have is that they don't know how to communicate how much an employee actually benefits from their benefits. Sounds redundant, I know, but it's so true. If you communicate the value of a benefits package to employees, they will see they are getting much more than a paycheck. Seems obvious, but many companies don't get it.

[Chris]

Communicating benefits can be difficult, and even when employers try they miss the boat. Often using HR terminology, or just not using simple language can confuse the employee. First, employers have to realize they need to communicate, and second, they need to do it right.