Benefit of Benefits
Christen Uber May 7, 2008
A recent study published by MetLife entitled Study of Employee Benefit Trends: Findings from the National Survey of Employers and Employees highlighted the importance benefits play in driving employee loyalty which in turn can impact companies ability to retain top performing employees.
When asked to identify the importance of work-related elements that give employees a feeling of loyalty, 81% of employees surveyed cite health benefits as important, second only to salary/wages, while only 60% of employers say the same. Similarly, among employees retirement benefits are tied with advancement opportunities as an important factor in loyalty, cited by 72% of those surveyed compared to just 41% of employer
The results are very interesting because the study does not address if benefits were an initial attractor to the employees when deciding to accept an offer, only that it is an attribute impacting loyalty. Bernard Hodes’s Employer Brand Awareness Index Study (EBAI) addressed initial attraction and showed at 30 days of tenure, when respondents were asked to rate the attributes that attracted them the most in choosing the employer, Career Opportunity far outweighed any other aspect. Location still played a level of importance, more so in certain industries. For example, in retail, location is a prime factor in choosing an employer. Benefits and culture were tied, and training was the lowest initial attractor. So overall benefits did not play a significant part in attracting candidates however, benefits did have more of an impact in retaining the employee – unfortunately it was negative.Our results showed the New Hire’s view of benefits, over the first year as being a key point of retention, negatively declined. So do our results contradict the MetLife findings that benefits can build loyalty and impact retention? No, what our findings demonstrate is the effect of not properly educating and marketing benefits to new employees can cause. Most Human Resources Departments include benefits as a topic to cover during a New Hire’s on-boarding process within the first 30 days of hire. However, a lot of employees don’t become eligible for benefits until the 1st day following the completion of 90 days. Most of the information between these two points is lost. For the most part, employees truly don’t understand the scope of benefits until they start utilizing them. So it is important for companies to continually educate employees on the benefits being offered.
Educate: When companies provide a consistent and accessible opportunity for employees to thoroughly understand their benefits and have access to HR for assistance than yes, loyalty will develop. Companies need to provide multiple opportunities for their employees to have access to information regarding their benefits. Opportunities to educate could include Benefits Page on the company website, Quarterly Benefits Newsletter, Benefits Hotline or Quarterly Employee Benefit Reviews.
Market Companies spend thousands of dollars a year to offer their employees benefits and yet typically do not market the value or options the benefits can offer an employee. It is very important for companies to market their benefit offerings. Employees will learn and understand the basics of what the medical, dental, and vision plans have to offer. However, they may not know the special programs and offerings that go along with them. For instance employees might not be aware that the medical plan offers a Wellness option that could assist them with weight loss - reduce gym memberships, stop smoking or alternative medical options. Employees are concerned about rising prescription drug cost however, they may not be aware of the cost savings associated with mail order for regular prescribed medications. These types of benefits are typically not highlighted or marketed however do have value to an employees overall perception and utilization of their benefits. It is my experience as a HR manager, the more an employee utilizes benefits the higher their satisfaction. Higher satisfaction can lead to greater loyalty
Posted in Human Resources Analytics, Human Resources, Recruiting, Retention
