Employee Benefit News, Bruce Shutan:
During good and bad economic cycles, employee benefits are effective strategic tools that can help address loyalty, recruiting and retention goals. However it may surprise some employers that benefits may be even more differentiating during an economic downturn.
As employers gear up for the next open-enrollment season, new research suggests they should think twice before cutting back on employee benefits — one of the few business investments whose value has held steady and which may be especially appreciated during lean times.
MetLife’s 7th Annual Study of Employee Benefits Trends shows that less than 15% of employers plan to reduce benefits significantly during 2009, and most of those who are considering action are focusing on 401(k) matches. LIMRA International’s study, A Subtle Shift, which examined employee benefits trends during the downturn, reports an even lower percentage (3%) of employers planning cutbacks.
MetLife research found that benefits influence loyalty more than meets the eye. Beyond salary/wages and health and retirement benefits, 69% of employees indicate that they value other insurance benefits such as life, dental, disability, vision, etc., despite only 41% of employers believing this to be the case. More than half of the employee respondents (56%) say they have a greater appreciation of their workplace benefits as a result of the difficult economy.
“Benefits will continue to play a prominent part in the total value experience for employees,” observes Bull Mullaney, president of MetLife’s Institutional Business. “A strong benefits program can really prove to be a differentiator at a time when employee productivity and commitment are critical to an organization’s success, especially as employers are increasingly asking employees to do more with less.”
Mullaney has spoken with scores of employers and brokers who are recognizing that when the economy eventually recovers, having the right talent in place is a critical part of any successful business formula. And providing a competitive benefits package can help achieve this corporate objective.
More personalized communications
But one key to managing these moving parts is promoting a better understanding of the products and services being offered to employees. At the heart of today’s benefits communication strategy is an effort to simplify education and make it easier for people to decide which benefits are most appropriate for their particular situation. There’s also a growing emphasis on personalizing materials and putting information online, indexed in a way that’s easier to find.
Earlier this month, MetLife introduced an online open-enrollment portal to help companies maximize employee benefits return on investment (metlife.com/enrollmenttoolbox). The site features proprietary research, a best-practices checklist, customizable surveys and decision-support tools, including benefit calculators that walk employees through computer-modeling scenarios and capsule summaries of the idea benefits package that people in the same situation might choose.
In conjunction with this approach, Mullaney suggests that employers consider an off-cycle enrollment for one particular benefit, such as life insurance or group legal plans, because these are often eclipsed by the full complement of benefits during open enrollment. This helps ensure that certain benefits offerings receive the right level of attention.
More prudent choices
As employers step up communications during the upcoming open-enrollment season, employees are expected to devote more time to carefully selecting coverages that better line up with their needs.
As employees shudder more of the burden for funding their benefits, MetLife research shows that employees are taking more time to study their benefits. As a result, they’re more interested in various voluntary benefit products — even if they have to pay all of the cost. Nearly seven in 10 (69%) employees say that these benefits play a strong role in the workplace loyalty, which is up from slightly more than half (51%) the previous year.
“There’s a real value to employers when their employees understand their benefit programs in more detail,” Mullaney says.
Realizing that the annual trends has consistently shown employees are spending only about half an hour on benefits selection, Mullaney remains optimistic that employees will focus more time on these important safety net decisions.
“If people can spend just an extra 15, 20 or 30 minutes on this, the quality of information they receive will allow them to make much better decisions,” he says.
To view MetLife’s new open-enrollment portal, visit metlife.com/enrollmenttoolbox
