employee benefits trends study
TRANSCRIPT
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Sty oEmpoyeeBeeitsTresA Blueprint or theNew Benets Economy
9th annual
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The symbolic centerpiece o the museum is the inspiring
circular atrium that soars 120 eet to the top o the dome
creating a unique relationship between the undamental
elements o earth and sky. In many ways the architectural
atrium is a metaphor or how employee beneits serve to
connect the undamental elements o a business. Beneits
help build the loyal workorce that is both the oundation
and the power o a successul enterprise.
Viw Pmac Aim in SmisniansNaina Msm Amican Indian, Wasinn, DC
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section 01
ExectiveSmmary
02. A Blueprint or theNew Benets Economy.
section 02
Cracs i teFoatio
06. Erosion o Employee LoyaltyMay Mean etention Is at isk.
A Workforce Ready to Take Flight
Employers Primary Focus Is on Cost
Less on Employee Satisfaction
Employees See Things Differently
section 03
ReiorcigBeeits Strctre
18. Flexibility, Choice andCustomization efect NewWorkorce and Economic ealities
Leveraging the Loyalty Impact of Benefit
Funding Flexibility and Choice
Making Communications Count
section 04
Remoeig teBeeits a
Retiremet Space
34. Fresh Perspectives onFamiliar Solutions.
Focus on Facilitating Employee Actions
to Build Financial Security
Financial Wellness
Protecting and Preserving Income
Income for Retirement
section 05
Preservig Eqityi Beeits
56. Benets Strategy Scenarios orthe Era o Health Care Reorm.
Employers Role Is Evolving
A Benefits Crystal Ball
section 06
Metooogy 64. About the Survey.
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ExectiveSmmary
section 01
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Te 9th Annual Study o Employee
Benefts Trends delivers a clear
message to employers: Reprioritiz
employee loyalty and satisaction,or economic recovery may arrive
with unanticipated setbacks or
retention and productivity.
This years indings reveal a workorce that has
grown more dissatisied and disloyal, to the point
where a startling one in three employees hopes
to be working elsewhere in the next 12 months.
Yet employers continue to believe employees are
loyal, and they do not appear to be tuned in to this
potential light risk. Focused on the challenging
business environment, employers remain conident o
strong levels o employee job satisaction and loyalt
A loyal and satisied workorce is part o the
oundation o business growth. Widening cracks
in this oundation may orce employers to pay a
price in reduced retention and productivity when
the job market improves.
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MetlIe Study o Employee Benets Trends 9th ANNuAl
A New Perspectiveon Benets
Beneits remain an important mechanism to
support business goals o employee attraction,
retention and productivity, and to orge an
employer-employee bond by helping to inancially
protect employees and their amilies. The impact
o the recession has made employee beneits
more important than ever. And, as the Study
shows year ater year, employees who are
satisied with their beneits are more likely to be
satisied with their jobs.
ProVIDINg beNeItS oN
DIereNt terMS
But there is no going back to the earlier,
paternalistic beneits model one in which
employees exchanged loyalty and productivity
or lielong inancial security and health care.
In the ace o new economic realities, including
escalating health care costs and a growing
aging population, employers must provide
beneits on dierent terms. And this requires
a new beneits blueprint. Balancing business
costs and beneit needs is not about spending
more its about spending dierently.
Reconstructing Benetsto Reect New Realities
The recession has impacted workers dierentlyat dierent stages o lie, with varied inancial
implications. The Study
highlights how this diverse
employee experience can
translate into disparate
beneits attitudes and
needs, and why employers might do well to
consider a generational strategy or beneits,
utilizing lexibility, customization and choice.
VoluNtAry beNeItS AND SoCIAl
MeDIA hAVe A key role
Employers may be surprised at the reported
readiness o their workers to pay or more
personally relevant beneits, which indicates
that voluntary beneits have a key role to play
in enabling individual choice, customization
and lexibility within budget constraints.
In addition, there is compelling evidence that
incorporating social media into beneits
communications tools might be an increasingly
important solution or capturing the attention
o younger workers.
baancin sinss css and nnds is n a spndin m is a spndin diffn.
section 02 section 03
MetlIe Study o Employee Benets Trends 9th ANNuAl
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MetlIe Study o Employee Benets Trends 9th ANNuAl
tis as Sd sws a mps and mps cni is as a cnncin wnnancia wnss and psica andmna a.
Nw tims ri a Nw Appac bns
Employers who seek to rebuild employee loyalty must ocus benefts strategies
on helping to create a saety net rather than providing a security blanket or their
employees. Findings rom the Study suggest actions employers could take to
help their employees enjoy healthier lives and greater fnancial security. In return,
employers may reap the rewards o improved retention and productivity.
section 04 section 05
Raising EmployeeResponsibility or
Financial Securityand Retirement
Employees also have to look at beneits dierently.
The new beneits blueprint requires employees to
become more engaged in eorts to improve their
health and in building inancial security or today
and tomorrow.
INANCIAl ProgrAMS ADD A
NeW DIMeNSIoN
Wellness programs are now widely accepted asa way to help control company health care costs
and improve productivity by reducing absenteeism.
Taking this a step urther, this years Study shows
that both employers and employees recognize there
is also a connection between inancial wellness
and physical and mental health. Programs that
treat inancial illness appear to hold promise
or improving productivity as well as reducing the
incidence o stress-related health conditions.
roM SeCurIty blANket to SAety Net
Having a reliable income during working years and
during retirement is something most Americans
count on. Yet most do little to preserve or protect
that income. Although most employees recognize
that they must accept more responsibility or their
inancial security, taking action is a challenge. The
new beneits blueprint looks to employers to
acilitate and support employee eorts with access
to the right coverages and by providing eective
education and guidance.
Distracted byHealth Care Reorm
The impact o the Patient Protection and
Aordable Care Act (PPACA) has been
controversial and distracting or companies o
all sizes. The Study revealed
a wide variety o anticipated
responses to PPACA on
the part o employers. But
most notable is that, at the
time o the survey, 32% o
all employers, and 45% o
small businesses with ewer than 50 employees,
report that they still do not know what they willdo in response to legislative requirements.
WhAt beNeItS WIll look lIke IVe
yeArS roM NoW
To more ully understand health care reorms
broad, long-term implications or beneits,
MetLie interviewed employers across the
country to investigate how they expect their
beneits roles and activities to change ive years
rom now. The resulting projections reveal
beneits scenarios that are both amiliar and
also surprising. Many employers expect non-medical beneits and retirement oerings to
become more important components o their
beneits strategy in the wake o health care
reorm. This bodes well or employees, given
Study indings about their desire or income
protection and retirement security.
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Cracs i teFoatioErosion o Employee Loyalty
May Mean etention Is at isk.
section 02
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A Workorce Ready to ake Flight
In a turbulent economy when employment is
precarious, many employees are earul about job
security, and changing jobs is ar rom tempting.
But as the economy recovers, there is evidence
that employees may become more likely to seek
other employment opportunities especially as
many are eeling rustrated in their current jobs.
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MetlIe Study o Employee Benets Trends 9th ANNuAl
Seeking Another Employer
More than one in three surveyed employees
hopes to be working elsewhere in the next
12 months. And this intent is true no
matter the company size. Employers
ulled by a period o low turnover
may have become less ocused
on employee job satisaction
and retention.
loW turNoVer MAy beCoMe A thINg o the PASt
Since the recession began, employers have become used to a relatively low rate o voluntary
turnover, but this may be changing. In October 2010 the Bureau o Labor Statistics reported that
the number o employees voluntarily quitting their jobs surpassed involuntary terminations through
layos and discharges, reversing the situation seen in October 2009.1
fig. 2.1
For compaies o a sies, oe i tree empoyees may become a igt ris
Employees agree that i its their choice, they hope to be working or a diferent employer sometime in 2011
0%
40%
Under 50employees
34% 34%
Under 500employees
500 or moreemployees
38%
10,000 or moreemployees
35%
36%
All employees
1 Job Openings and Labor Turnover October 2010,Bureau of Labor Statistics, DOL. News release, December 7, 2010.
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MetlIe Study o Employee Benets Trends 9th ANNuAl
eMPloyee loyAlty IS Not reCeSSIoN-Proo
For the past three years the recession has understandably absorbed employers attention. Forced
into expense-control mode, perhaps it is not surprising that attention to employee satisaction and
retention was not top o mind or many employers. With a shrinking economy and ewer voluntary
resignations, it seemed that employees were grateul just to have a job.But while employers were ocused on dealing with a diicult business climate, the recession has
taken a toll on employees. The Study has reported a decline in employee loyalty year over year
and that loyalty has now reached a three-year low. But what is disturbing is that employers seem
unaware o this downward trend. Employer responses show that they assume employees eel as
loyal today as they did three years ago.
A similar trend is apparent in that each year employees perceive less loyalty rom their employers
than the year beore. But each year employers assume an unwavering perception o loyalty.
The widening gap in loyalty perception is a sign that employers may be taking employee retention
or granted. They are not paying attention to serious cracks in the loyalty oundations o their
workorce; cracks that can expand to threaten their ability to retain the key talent theyll need most.
fig. 2.2
Empoyees a empoyers ave ieret views o oyaty
51%50% 50%
0%
2008 2009 2010
60%
0%
60%
A very strong sense of loyalty to their employees
Employees have a very strong sense of loyalty to the company
57%57% 57%
59%
53%
41%39%
47%
33%
2008 2009 2010
A very strong sense of loyalty to their employer
Their company has a very strong sense of loyalty to them
Employees who feel:
Employers who feel:
t Sd as
pd a dcinin mp a
a v a,and a a nw acda -a w.
INSIGHT
bt empoyers are aware o te ecie i oyaty
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MetlIe Study o Employee Benets Trends 9th ANNuAl
CoSt CoNtrol IS buSINeSS-CrItICAl
Not surprisingly, employers this year report that managing beneits costs is by ar their most
important beneits objective. When asked to rank the relative importance o their top beneits
objectives, employee retention and productivity are considered important, but rank below the
need to manage the bottom line or beneits costs.
fig. 2.3
Most empoyers rae cost cotro as teir most importat beefts objective
Employers identied their top objectives and then ranked these in order o priority
0%
40%
Controlling health andwelfare benefits costs
33%
Retaining employees
22%
Increasing employeeproductivity
19%
Attracting employees
5%
Employers Primary Focus Is on Cost Less on Employee Satisaction
bcas ma, I dnin w ascncnd wimp saisacin.bcas can sam mpwi a s and wisHR Professional
(1,0003,000 employeesChicago, July 2010
TESTIMONIAL
36% mpspd acs siin isn i
v impansais.
INSIGHT
CoSt ShItINg IS here to StAy
Employers believe that employees now expect to pay a greater share o their beneits costs. And
36% reported that transitioning beneit costs to employees is a very important beneits strategy. This
trend has been accelerated by cost shiting associated with health care reorm in the orm o moves
to high-deductible plans, as well as passing on some o the medical insurance rate hikes that many
employers incurred or 2011.
fig. 2.4
Cost-sitig strategies cotie to grow i importace year over year
0%
Employers who indicated that cost shifting is a very important strategy in their company
40%
32%29%
2008 2009 2010
36%
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MetlIe Study o Employee Benets Trends 9th ANNuAl
Cost shiting is a widely accepted practice. Close to two out o three companies (61%) recognize
that shiting beneits costs to employees is now an accepted practice, and is necessary i they are
to continue to provide the beneits employees want and need.
fig. 2.5
Cost sitig is more accepte i arger compaies
Under 500 employees 500 or more employees
Our company avoids shifting employee benefits costs whenever possible
This is the way business is going and employees expect to pay more of their benefits cost
Our company does not want to shift employee benefits costs to employees but we have no choice
43%28%
29%
32%26%
42%
lookINg to eMPloyeeS to helP reDuCe CoMPANy heAlth CoStS
Not only are employers transitioning more o the cost o beneits to employees, they are also looking
to employees to help hold the line on escalating health care costs.
The growing importance o wellness programs relects this dynamic. Employers are betting on
the belie that i employees work harder at staying healthy and manage chronic diseases moreeectively, they and the company will beneit rom lower health costs and reduced absences.
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MetlIe Study o Employee Benets Trends 9th ANNuAl
DrIVINg eMPloyee SAtISACtIoN hAS A loWer PrIorIty
At the same time that employers are emphasizing their ocus on cost control and cost shiting, they
are placing less importance on increasing employee job satisaction. There is also reduced emphasis
on beneits that help employees achieve a better work-lie balance; perhaps a questionable course
given that many employees are dealing with increased stress at home and work.
fig. 2.6
Empoyers report ess ocs o empoyee satisactio a wor-ie baace
79%83%
52%56%
50%
Increasing employee job satisfaction
Providing employees with benefits designed to better balance their work and personal lives
100%
2009 2010
Employers who indicated the following benefits goals were very important to their company in the last 12 months:
eMPloyeeS Are WorkINg hArDer IN A tough eCoNoMy
The need in the recession to do more with less has had a positive impact on employee
productivity. Even the smallest businesses enjoyed productivity gains over the past 12 months.
But these productivity gains were not viewed as avorably by employees, and they could begin
to wane i employees head out the door once the economy recovers.
fig. 2.7
Empoyers o a sies saw proctivity gais i te ast 12 mots
Employers who reported productivity increased at their company in 2010
0%
10,000 or moreemployees
48%
50%
Under 500employees
38%
500 or moreemployees
43%
5,000 or moreemployees
45%
All companies39%
Under 50employees
35%
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MetlIe Study o Employee Benets Trends 9th ANNuAl
eMPloyerS thINk AllS Well WIth theIr WorkorCe
Despite these changes in the beneits and workplace environment, employers assume that job
satisaction and beneits satisaction are on par with previous years. They do not seem to expect
any negative employee reactions to managements tough recession tactics.
fig. 2.8
Empoyers aticipate virtay o ecie i empoyee satisactio year ater year
0%
50%
44%44%43%
41%40%40%
Workplace satisfaction is high among our employees
Our employees are satisfied with the benefits that we offer
2008 2009 2010
Employers who strongly believed that:
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MetlIe Study o Employee Benets Trends 9th ANNuAl
Employees See Tings Diferently
job SAtISACtIoN AND loyAlty MeASureS Are oN the DeClINe
During the economic meltdown, employees demonstrated their loyalty and went along with the
tough measures required to keep businesses running but now they eel that they have been a
partner in that pain or long enough. The Study shows many measures o employee engagement
such as job satisaction are starting to decline.
M wis cmpaad a aff
And said,W aid ff
man. W in i pp act avn dni , and ss
win 16 sinsad 12.HR Professional
(1,0003,000 employees)San Francisco, July 2010
TESTIMONIAL
reezeS AND urloughS hAVe let eMPloyeeS ruStrAteD
Even though reports show the economy is improving, employees are not eeling it. As they wrestlewith the inancial impact o the recession, in the workplace and in their personal lives, there appears
to be a satisaction disconnect. Feeling overworked and underappreciated, 40% o employees
report that they worked harder in the last 12 months, and 25% eel less secure in their jobs than
they did a year ago. These burnt-out employees are the most likely to say that they hope to be
working elsewhere in 2011.
fig. 2.9
Empoyees wo pa to eave are more iey to report greater job isecrity a woroa icreases
Strongly agree, hope to be workingsomewhere else in 2011
Strongly disagree, hope to be workingsomewhere else in 2011
Decreased job security
Increased workload
0%
60%
51%
42%
33%
13%
Strongly disagree, hope to be workingsomewhere else in 2011
Strongly agree, hope to be workingsomewhere else in 2011
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MetlIe Study o Employee Benets Trends 9th ANNuAl
fig. 2.10
Eac year, ewer empoyees report job satisactio a compay oyaty
40%
60%
51%
53%
59%
47%
53%
59%
I am satisfied with the job that I have now
I feel a strong sense of loyalty to my employer
2008 2009 2010
Employees who strongly agree with the following statements:
Are eMPloyerS loSINg SIght o the PurPoSe o beNeItS?
These trends are a clear warning o potential problems in the near uture. Employers have kept talented
employees through the recession. Are they about to lose them just as things start to turn around?
Despite budget pressures, employers would do well to keep their eyes on employee satisaction
and engagement. Have employers tended to view beneits as table stakes and taken them or
granted? This is not the time to lose sight o how beneits help to achieve the business goals o
employee attraction, retention and productivity.
fig. 2.11
Beefts cotie to retai a attract empoyees
The employee benefits offered to mewere an important reason why I cameto work for this company
49%The employee benefits offered to meare an important reason why I remainwith my employer
EMPLOYEES
60% EMPLOYEES
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MetlIe Study o Employee Benets Trends 9th ANNuAl
Why beNeItS MAtter More thAN eVer
Once again, the Study shows that how employees eel about their beneits is associated with eelings
about their job and the company. Employees who report that they are very satisied with the beneits
they receive through work are more than three times as likely to indicate that they are highly satisied
with their current job compared with those who are very dissatisied with the beneits program.In addition, they are also more likely to say that they eel a strong sense o loyalty to their employer.
fig. 2.12
Empoyees wo are satisfe wit beefts are more iey to be oya a satisfe wit teir jobs
0%
80%
Employee is very satisfied with job
Employee is very loyal to employer
Strongly disagreesatisfied with benefits
Strongly agreesatisfied with benefits
76%
71%
24% 25%
Furthermore, the Study reveals that there is an association between employee beneits satisaction
and retention. Those who indicate that they are highly satisied with their beneits are less likely to say
that they are hoping to leave in the next 12 months and more likely to conirm that beneits are an
important reason why they remain with their current employer.
fig. 2.13
Empoyees wo are satisfe wit beefts are east iey to eave a beieve beefts are aimportat reaso to stay
0%
70%
Disagree, hope to be working somewhere else in 2011
Benefits are an important reason to stay
Strongly disagreesatisfied with benefits
Strongly agreesatisfied with benefits
53%
67%
32%
9%
t Sd cna mpsaisacinwi ns issn assciawi va saisacinand a.
ts w asaisd wii nsa ss i pannin av in 2011.
INSIGHT
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MetlIe Study o Employee Benets Trends 9th ANNuAl
eMPloyeeS VAlue beNeItS
The economic events o the past 12 months have made employees place greater value on their
workplace beneits and have sharpened their interest in making sure that they understand the
opportunities that these beneits provide. Meaningul employee beneits are a very important tool
in any eort to rebuild employee loyalty.
fig. 2.14
Base o evets o te past 12 mots, empoyees report tat tey igy vae teir beefts
Have taken even greater interest inunderstanding the employee benefitsthey receive from their employer
40%Place even greater value on the benefitsthey receive from their employerEMPLOYEES
41% EMPLOYEES
A Nw bns bpinWhen it comes to sustaining employee loyalty and satisaction, the possibility o
reconstructing the generous beneit packages o the past is remote. But indings
rom the Study reinorce that beneits remain a very important tool or increasing
employee loyalty and satisaction.
Balancing business costs and beneit needs is not about spending more its about
spending dierently. Striking the right balance requires a new blueprint or beneits,
one that emphasizes employees taking responsibility and employers providing more
choice and lexibility.
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ReiorcigBeeits
StrctreFlexibility, Choiceand Customizationefect New Workorceand Economic ealities.
section 03
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Leveraging the Loyalty Impact
o Benets
Most successul companies depend on a strong
oundation o loyal and productive employees.
However, this years Study shows that it is a
oundation at risk; 36% o employees plan to take
light at the irst sign o an active job market.
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structure
MetlIe Study o Employee Benets Trends 9th ANNuAl
loyAlty IS ASSoCIAteD WIth greAter eMPloyee SAtISACtIoN WIth beNeItS
Beneits can be an eective tool or the task o rebuilding loyalty and job satisaction. Study indings
reinorce the connection between satisaction with beneits and employee loyalty. In act, employees
who are satisied with beneits are nearly three times as likely to express a strong sense o loyalty to
their employers.
fig.3.1
Satisactio wit beefts is associate wit greater empoyee oyaty
Employees who are highly satisfiedwith their benefits
Employees who are highly dissatisfiedwith their benefits
71%Strong senseof loyalty
25%Strong senseof loyalty
100% 100%
reCogNIzINg NeW WorkorCe reAlItIeS
Beneits dollars work harder when employees perceive their beneits program as valuable. But
perceived value depends on beneits being relevant to an employees personal needs, and this
requires employers to take a closer look at workorce realities. While nearly all workers were
impacted by the recession, they were at dierent stages o lie when it hit. The resulting shits
in personal inancial paradigms are also likely to be dierent or various age groups. The Study
highlights how this can translate into dierent generations o workers having dierent priorities
and views about what their beneits should include.
Workplace generational dierences are most oten addressed in the context o behaviors and
management styles, but the 9th Annual Study of Employee Benefits Trends shows that today
there is also an important opportunity to approach beneits strategies rom a generational
perspective and to do this with greater beneits choice, lexibility and customization.
Benets Build Loyalty
The Study conirms the power o beneits
to engage and retain employees. In act,
employees who are satisied with beneits
are nearly three times as likely to
express a strong sense o loyalty
to their employers.
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geNerAtIoNAl beNeItS StrAtegIeS
Each generation tends to have certain attitudes and issues in common. Insights rom the Study into
these dierences can help employers recognize the beneits value proposition or each generation
and thus more eectively position beneits to address speciic retention and productivity challenges.
gen Y(age 2129)
Gen Y has been
hardest hit by the job
reeze. The challenge
presented by this group
is that they are more
and more dissatisied
with their current job
than older workers.
While they are
satisied with their
beneits, they do not
eel as strongly as
others that beneits are
a reason to stay with
the company. However,
Gen Y employees do
say that the beneits
they receive at work
are the oundation o
their inancial security.
The solution or Gen Y
employees is to engage
them in recognizing
the value o their
beneits. This could
be achieved through
more eective beneits
communications, such
as using media andmessaging that they
relate to.
The age range or
Generation Y is 16 to 29,
but the Study only
interviewed employees
21 or older.
gen X(age 3045)
The oldest Gen X
employees are now
approaching early
middle age and are
acing the costs o
raising children and
juggling two-career
amilies. They value
workplace beneits and
see them as a strong
reason to stay with
their current employer.
However, the challenge
or this group is that
they are
and as a result, are a
greater light risk. The
solution is to ensure
that Gen X employees
have opportunities
to obtain the right
amount o income
protection and savings
that they need or
their amilies, as well
as access to advice andguidance on building
inancial security.
Helping them make
the most o their
beneits will increase
the perceived value o
those beneits.
Younger boomers(age 4654)
Younger Boomers
do not appear to be
a serious light risk,
but the challenge
presented by this
group is that job
dissatisaction could
lead them to be
less engaged and
a potential
Beneits are not the
loyalty anchor or this
group that they are
or other employees
Younger Boomers
tend to be less
satisied with their
beneits. The solution
is to re-engage
Younger Boomers
with the company by
showing them how
their beneits can help
with their inancial
issues. Employers could
ocus on educating
them on how they
might recover lost
ground in retirementsavings and provide
access to voluntary
beneits such as critical
illness insurance
that can help relieve
inancial stress.
older boomers(age 5565)
Older Boomers are
satisied with their jobs
and their beneits, and
are unlikely to leave.
However, they ace a
major challenge in that
many are
Employers recognize
this changing work-
orce dynamic, and
62% expect their older
employees to delay
retirement and work
longer. The solution is
to help Older Boomers
close savings gaps
and plan or an
aordable retirement
by providing inancial
planning tools and
services. In addition,
incentives to participate
in wellness and
disease management
programs could help
reduce the health
and disability costs
potentially associatedwith older workers.
anis av
n as saisdwi ins asgn y and
od bms
a pdcivi
nancia
nppad imn
I in amps caia in av a mcics and av m cn.HR Professional
(1199 employees)
Chicago, July 2010
A n-si-s-ans pacaa in pasInsad, mpsd cnsidcic, fiiiand csmiai
na anincasin div
wpac.
INSIGHT
TESTIMONIAL
MetlIe Study o Employee Benets Trends 9th ANNuAl
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loyAlty DrIVerS Are DIereNt or youNger WorkerS
Salary, health beneits and retirement beneits are important loyalty drivers or all employees.
However, the relative ability o other beneits, such as non-medical and voluntary beneits, to drive
loyalty varies by generation.
For example, younger workers are much more likely to eel that company culture, advancementopportunities and work-lie balance programs are more important in creating a eeling o loyalty
to their employers.
This diversity points to potential opportunities to steer strategies or beneits budgets dierently
based on the makeup o the workorce.
A loyAlty gAP CoNtINueS
Employers continue to have a very dierent view o what contributes most to creating a loyal
workorce. For example, non-medical beneits, such as lie, dental and disability insurances, are
nearly twice as important or driving loyalty than employers suspect.
As employers scrutinize the return on their beneits investment, it is critical that they minimize
any gaps between employee and employer perceptions about which beneits most eectively build
loyalty and satisaction. There may be an opportunity to use less-costly beneits products
and programs to provide greater perceived value or employees.
fig.3.2
Factors cosiere extremey importat to oyaty
70% 79%Salary/wages
Factors considered extremely
important to loyaltyEMPLOYERS EMPLOYEES
58% 74%Health benefits
38% 64%Retirement benefits
52% 44%Company culture
46% 51%Advancement opportunities
37% 59%All other benefits
(dental, disability, vision, life, etc.)
32% 43%Programs that help create
work-life balance
21% 36%A choice of voluntary benefits
26% 35%Health and wellness programs
h-V b
Empoyees pace mc
iger vae o o-eat a retiremet
beeits ta may
empoyers reaie.
t nnain [is]asin a sins ans. ts csd n adiffn mn nspaca. Is aa fiiiand asicaanin a
cnis iw aanc.HR Professional
(1,0003,000 employees)San Francisco, July 2010
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SeeINg beNeItS WIth A booMer leNS
The Study indicates that employers tend to adopt a more traditional approach regarding what drives
loyalty in their employee population one that is more likely to relect Boomer values. This may
not give enough weight to the preerences o younger workers or example, the reduced ocus on
work-lie balance seen in this years results despite the act that it is highly valued by Gen X andGen Y employees.
Nearly 50% o employers responding to the survey have over 10 years o Human Resources (HR)
experience and may not bring Gen X and Gen Y viewpoints to the table. Lack o consideration and
customization or generational wants and needs may result in employers not oering the right
beneits to get more return on their beneits investments.
DIereNt geNerAtIoNS uSe beNeItS IN DIereNt WAyS
Where employers oer programs that help workers balance lie and work, younger workers are more
likely than Boomers to take advantage o these programs. Employers might want to put greater priority
on communicating these options to younger employees to help keep these employees satisied.
fig.3.3
Participatio i exibe arragemets varies by geeratio
0%
Telecommuting all or part of the workweek40%
0%
40%
Flex time
17%
12%
Job sharing
19%
Convenience services (e.g., dry cleaning,
ATM on premises, hair-cutting/salon on
premises, on-site convenience store, etc.)
29%
Gen Y
32% 31%
24%
12%
YoungerBoomers
10%
OlderBoomers
29%
Gen X Gen Y YoungerBoomers
OlderBoomers
Gen X
Gen Y
4%
YoungerBoomers
2%
OlderBoomers
Gen X
26%
Gen Y
8%
YoungerBoomers
5%
OlderBoomers
25%
Gen X
on
27% mpsma diffnnaina na v impansaic cs.
I in incasdawanss wmivas diffnains is adivin ffin ad spcmand a m fiaa ns.HR Professional
(1,0003,000 employees)
San Francisco, July 2010
INSIGHT
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offer dental and drug Plans
Ensure that dental and prescription drug
beneits are part o the beneits portolio.
Nearly 50% o Gen X and Gen Y employees
surveyed ranked these programs in their top
ive most important beneits.
coVer What matters to them
Work with carriers to ensure that plan designrelects the needs o younger workers. For
example, cover white illings and orthodontics
in dental plans and appropriate medications
in the preerred drug ormulary.
offer choices
Streamline plan options to keep premiums and
service costs aordable or younger workers.
go VoluntarY
Map beneits to needs and explore voluntary
plan options to close gaps.
get fleXible
Add telecommuting and lex time and
encourage usage this group highly values
lexibility in work time and place.
get to the Point
Simpliy, shorten and make electronic beneits
education materials to suit younger workers
communication preerences.
Insight to Action
Younger workers are a greater light risk. Boost retention by emphasizing beneits
that this group especially values.
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To some extent, employers can achieve greater choice and lexibility in the beneits program by
spending dierently and reallocating resources to where they may be more eective. But i some othe cost o greater customization has to be borne by employees, will this create more dissatisaction?
The Study indicates that it will not.
eMPloyeeS WIllINg to PAy to PerSoNAlIze
Flexibility and choice in beneits are a way to deliver personalized and customized beneits to drive
loyalty while still managing the bottom line.
Employees across the board highly value personalized beneits to the point that they are prepared
to pay the entire cost i necessary. They also say that the availability o beneits that meet their needs
is likely to increase their eelings o loyalty to the company.
fig.3.4
Coice rives oyaty, especiay or yoger worers
Employees who said choice o benets that meet their needs is extremely important or creating loyalty
(even i they pay 100% o the cost)
0%
50%
Gen X
40%
YoungerBoomers
30%
OlderBoomers
31%
Gen Y
41%
Funding Flexibility and Choice
Na w-id mps vavna nas a wa ain
ns a mi psna n
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MetlIe Study o Employee Benets Trends 9th ANNuAl
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teeINg uP VoluNtAry beNeItS
Voluntary beneits allow employers to expand the types o beneits oered without signiicant
increases to beneits costs. Voluntary beneits include not only legal plans, critical illness and pet
insurance but also supplemental levels o lie and disability coverage that are employee-paid.
Nearly two-thirds (61%) o employees report that they value these products as a way to obtainbeneits that meet their personal needs.
Employees also appreciate that they can save time and money when they obtain coverages
through the workplace. They also expect they would have to pay higher costs i they purchased
similar coverages elsewhere.
fig.3.5
Empoyees o a ages see coice, cost a coveiece avatages i votary beefts
0%
70%
More likely to choose benefits that meet their personal needs
Comparable products outside of the workplace would cost more
Buying through the workplace is convenient and saves time
Employees said they value voluntary benefits because:
Older
Boomers
61%
66%68%
Younger
Boomers
59%
62%64%
Gen X
64%66% 67%
Gen Y
57%
64% 65%
eMPloyeeS Are oN boArD WIth VoluNtAry beNeItS but Where Are eMPloyerS?
Despite the opportunity to use voluntary beneits as a way to increase the perceived value o
the company program, many employers are not making the most o what voluntary beneits
can do or them.
Nearly hal (43%) o employers surveyed underestimated the level o employee interest andappreciation or these products, and did not recognize their potential or reinorcing employee loyalty.
I iv avna na a acmpan cas can mmps nnds wi cmpan pain cs.HR Professional(1199 employees)
Chicago, July 2010
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fig.3.6
Empoyers are ot reaig te sigas correcty we it comes to empoyee iterest ivotary beefts
Our employees are not interestedin a wider range of voluntarybenefits products
43%I am interested in a wider array ofvoluntary benefits that I can chooseand pay for on my ownEMPLOYEES
52%EMPLOYERS
fig.3.7
Empoyees ee ie, isabiity a eta israce trog te worpace are importat eve i
tey ave to pay 100% o te cost
Interested in life insurance Interested in disability insurance Interested in dental insurance
0%
60%
54%
58% 59%
on
17% mpsindica a
vnans a a vsinican pa cmpansns sa
on
14%sa a vi incas nm
vna nd in nw as.
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take a close look
Analyze current beneits or gaps and identiy
opportunities to enrich the program based
on the preerences and proiles o the current
(and uture) workorce.
get an outside VieW
Seek recommendations rom brokers and
carriers or eective voluntary plan solutions
to ill any gaps and add perceived value to theprogram without adding direct cost. Forty-
two percent o employers reported that their
broker has recommended voluntary beneits as
a cost-eective way to enhance their beneits
program. It is a worthwhile conversation to have.
eXtend income Protection
Turn to employee-paid options or supplemental
lie and disability coverage when the current
plan does not provide employees with adequate
income protection coverage levels. Employeescan choose to pay or the option no need to
add to the employers beneits costs.
focus on sPecific needs
Explore specialty voluntary beneits that
address speciic employee concerns. For
example, 57% o employees are very worried
about meeting extra costs not covered by
medical insurance in the event o a major
illness. Critical illness insurance is a voluntary
beneit that can help address this concern.
shift costs, dont droP
Dont drop beneits because o cost constraints;
consider a voluntary replacement instead. Sixty-
one percent o employees are clear that they
would rather pay or beneits than lose them.
Insight to Action
How to venture into voluntary beneits.
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More than hal (56%) o employers surveyed made no modiications to their beneits materials
last year, and a third (33%) o them indicated that changing employee communications is simplynot a priority right now. While recognizing the very real inancial challenges that many companies
ace in this economy, deciding to save money in the area o beneits communications could be
shortsighted. Employees who say that their company has eective beneits communications, or
who recognize that their employer has improved communications, are more than twice as likely
to say they are loyal to their employer. They are also more likely to be more satisied with their
beneits and with their jobs.
Eective communication can make the dierence between beneits that are understood and valued,
and beneits that are overlooked and underutilized.
fig.3.8
Improvig beefts commicatios as a oyaty payo
57%
0%
Strongly agree that... Strongly disagree that...
80%
65%
78%
Strongly agree that... Strongly disagree that...
16%
My employer is loyal to me
I am very loyal to my employer
...my company benefits communications
are effective
...my employer improved our benefits
communications this year
70%
15%
25%
30%
oNe CoMMuNICAtIoNS PACkAge or All So yeSterDAy
One communications platorm/package approach no longer makes sense or todays diverseworkorce. An eective beneits communications strategy requires messaging that resonates with
dierent lie stages and generational attitudes in the workplace and highlights beneits that will
engage them. Yet, in the last 12 months, only 10% o employers have brought a generational point
o view to their communications materials, and only 13% have added a survey to help identiy their
employee beneits needs and attitudes.
StePS IN the rIght DIreCtIoN
The good news is that nearly hal o employers (44%) did make some changes to their beneits
communications in the past 12 months. And their employees noticed: 43% o employees reported
that their company had improved beneits communications in the last year.
Making Communications Count
An mp camp m ffic ansaid, I nd asss. W dnw av visincva? And Isaid, W d. ynw, is is anmp as
wi s v asHR Professional
(4,000+ employees)
San Francisco, July 2010
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StIll oPPortuNIty or IMProVeMeNt
Despite this welcome progress, there is still opportunity to do more. Employers should strive to
keep up with todays ast-changing communications trends and technology to keep beneits
communication relevant. Fity-ive percent o employees reported that they did not ind their
beneits materials clear or comprehensive. Only 23% o employees are satisied with their beneitscommunications and these satisied employees tend to be older employees, not the younger
workers who need to engage more on the subject o beneits.
eMPloyerS get 30 MINuteS to tell theIr beNeItS Story
Showing employees the value o their beneits and options requires getting their attention. The
Study again conirms that employees (regardless o age) spend on average 30 minutes on beneits
enrollment. And in this world o short attention spans, this is unlikely to change. Employers are
going to have to make every minute count.
Employers who changed their communications strategies ocused mainly on communicating
more oten (25%) and expanding into new media (19%). Making assumptions rom an HR point
o view may not always give the right answers, but only 13% added employee surveys to helpguide their thinking.
fig.3.9
Cages tat empoyers mae to beefts commicatios i te ast 12 mots
0%
30%
Increased thefrequency of
communications
25%
Tailored materialsfor differentgenerations
10%
Changeddesign and/or
messaging
12%
Added employeesurveys
13%
Added types ofmedia (paper, web,
video, podcast,social media, etc.)
19%
Where should employers make beneits communication improvements or maximum eect? This
year the Study asked employees what would make their beneits communications more meaningul
or them and they said they would like to see more requent communications (34%) and
inormation tailored to lie events (39%).
But even more, employees said that receiving beneits inormation on the internet (44%) would be
more meaningul. Younger workers eel most strongly about this, yet 36% o Older Boomers also are
interested in online communications. Not surprising, since 74% o Americans now are actively using
the internet.2 So employers appear to be on the right track although they could add more ocus to
dierentiating beneits messaging by lie stage and generation.
2 Internet, Broadband and Cellphone Statistics, Pew Research Centers Internet & American Life Project, Jan. 2010.
55% mpspd a did n ndi nsmaias ca cmpnsiv.
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PreereNCe or A lIVe PerSoN
Automation and outsourcing have reduced the visibility o HR in most organizations especially
large ones. Yet over one-third (36%) o all employees surveyed would preer to have access to a live
person to explain their beneits. This speaks to the need or a multichannel approach to providing
beneits inormation, since this preerence exists across the generational spectrum.
SoCIAl MeDIA the NeW keyStoNe IN the CoMMuNICAtIoNS brIDge
Many people assume that social media is another name or social networking sites, such as Twitter,
Facebook and LinkedIn, but the deinition is much broader. Social media is about on-demand
inormation, access and engaging people in two-way dialogue. It includes videos, blogs, mobile
content and podcasts. It is not a ad; it is undamentally changing the way people communicate
about all subjects not just beneits. A smart social media communications strategy is as much
about connectivity and leveraging mobile technologies as it is about any one particular medium.
As part o an integrated communications campaign, social media can make beneits more relevant
and improve results. It also lets employers gather real-time eedback rom employees.
gettINg INterCoNNeCteD
Seventy percent o employers say they do not use social media, and the Study uncovers some o the
perceived barriers to including it in the communications mix. Some employers (25%) believe there
is a lack o interest on the part o their employees, while others cite legal concerns (23%) or lack o
resources (37%). Others say it is just not valuable or their company (33%).
fig.3.10
Compaies are esitat to aopt socia meia
0% 40%
Do not think it is valuable 33%
Do not think employeeswould use it
25%
Have legal concerns 23%
Have technical
support challenges
15%
Do not know how tocurrently implement it
12%
Other reason 12%
Do not have the resources 37%
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However, despite these reservations, the Study also shows that many companies recognize the
advantages o using social media. These companies see new media as a way o engaging employees,
and 74% acknowledge that it provides an easy, convenient way or employees to obtain beneits
inormation. Yet only 8% o those who do not currently use some orm o social media plan to put a
toe in the water in the next year.
PAy AtteNtIoN to youNger WorkerS CoMMuNICAtIoNS PreereNCeS
Gen Y workers are the most interested in receiving beneits inormation through social networking,
mobile devices and text messaging, while older workers are less interested. But older workers
preerences alone should not drive the communications strategy.
Employers might consider exploring some aspects o social media to build a beneits bridge to
younger employees, especially since they are more likely to be a light risk and to rate company
beneits communications as less eective.
fig.3.11
Yoger empoyees are most itereste i receivig beefts iormatio trog socia etworig,
mobie evices a text messagig
Gen YEmployee interestin social media Gen X
Mobile device to access
he internet (e.g., cell phone,
BlackBerry, iPhone)
Text messaging
Social networking sites
(e.g., LinkedIn, Twitter,
Facebook, etc.)
YoungerBoomers
OlderBoomers
Internet site
42%
42%
40%
75%
39%
38%
37%
80%
12%
12%
12%
66%
10%
11%
10%
61%
74% cmpanisacnwda scia mdiapvids an as,cnvnin wa mps ain ns
inmain.
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MetlIe Study o Employee Benets Trends 9th ANNuAl
tn in emp Diffncs Sap
an effciv bns Pam
Not all employees are the same. Their stages in lie, personal needs and individual
preerences all impact how they perceive the value o their beneits. As employers
strive to make their beneits dollars work harder, they will need to pay close
attention to ensuring their beneits programs are responsive, lexible and aordable.
simPlifY
First, review current beneits materials to
ensure that they are simple, well organized
and concise. Jettison jargon wherever you can.
set goals
Dont jump into social media without a clear
goal, or else money and eort may be wasted.
The goal might be to boost participation in
a wellness initiative, shine a spotlight on anunderutilized voluntary beneit or add new lie
to a repeat campaign. Decide i social media
tools can help to accomplish the companys
chosen objectives.
understand Your audiences
Identiy the audiences or this goal and their
communication preerences. Veriy that social
media will help them receive the inormation
easier and aster.
set a budget
Decide on an appropriate level o inancial
investment. Building a communications
website on the internet (beyond the irewall)
will provide a sound, long-term platorm. But
a quick podcast or video also may do the job
eectively as part o a campaign.
start small
A blog or Twitter eed may be the easiestway to start. Keep them simple but resh
and interesting, with regular updates and
hints and tips rom the HR stas collective
knowledge and experience.
listen and adaPt
Let employees guide the process by soliciting
eedback about what they like. Be sure to
monitor and respond switly to comments so
employees know they are being heard.
Insight to Action
Here are some pointers or setting social media in motion.
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section 04
Remoeig teBeefts a
Retiremet SpaceFresh Perspectives onFamiliar Solutions.
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Focus on FacilitatingEmployee Actions to BuildFinancial Security
Economic realities have made the beneits cost
equation balancing beneits costs with beneit
needs more challenging than ever, especially as it
pertains to employee health and inancial security.
The new beneits blueprint approaches this
challenge not with radical new architecture, but
by remodeling the existing beneits space
or a changed perspective. This means thinking
dierently. Instead o responsibility or cost being
primarily the companys concern, it is now shared
by employees. And employee inancial security is
approached rom a perspective o income needs
and income protection.
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retirem
ent
sPace
Wellness Delivers Returns
Wellness programs are delivering proven
returns on investment or employers,
with nearly three-quarters o them citing
these programs as being eective in
reducing the companys overall
medical costs.
Financial WellnessAdding a New Dimension to Health and Wellness Strategies
WellNeSS ProgrAMS eeCtIVeNeSS IS NoW Well eStAblISheD
Wellness programs are one o the places where employees are engaged in the beneits cost
equation. The survey shows that encouraging employees to adopt healthier behaviors is increasing
in popularity as a means to control health costs and drive productivity.
Employers who oer wellness programs believe that they work; 72% say that they are eective
at reducing medical costs, and over hal o employers surveyed believe that health and wellness
programs are eective or improving productivity through reduced absence a number that rises
to 76% or companies who provide wellness programs.
fig. 4.1
Empoyers tat oer weess programs are especiay iey to report tat tey are eective at
recig meica costs
Say they are effective at reducingmedical costs
EMPLOYERS THAT OFFER WELLNESS PROGRAMS ALL EMPLOYERS
72%Say they are effective at reducingmedical costs
59%
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rooM or WellNeSS exPANSIoN
Since employee liestyle choices account or the majority o health care costs, a successul wellness
strategy requires investment in programs that create and sustain healthy employee behaviors. Across
all companies, there has been a steady increase in wellness programs, as well as growth in associated
wellness initiatives such as medical and dental disease management programs. But more employerscould beneit rom a solution that is proven to help manage their greatest beneits expense
medical costs.
fig. 4.3
Weess programs ave steaiy icrease over te ast tree years
50%
0%
2008 2009 2
Wellness program
Medical disease management
Dental disease management
010
Employers who said their company offered:
33%
15%
8%
45%
26%
14%12%
37%
20%
fig. 4.2
Empoyers tat oer weess programs are especiay iey to report tey ep mae worersmore proctive
Say they are effective atimproving productivity
76%Say they are effective atimproving productivity
58%
EMPLOYERS THAT OFFER WELLNESS PROGRAMS ALL EMPLOYERS
W a discn n ns wn wimpmnd
wnss pamS nw vdin cmpans a an ff[m] i w .HR Professional
(1,0003,000 employees)
San Francisco, July 2010
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fig. 4.4
Growt i weess programs as bee sigifcat i compaies wit 500 or more empoyees
57%
500 or more employees
Under 500 employees
80%
19%
72%
29%
2008 2009 2010
0%
22%
61%
ADDINg A INANCIAl ASPeCt to WellNeSS
Stress is associated with exacerbating and driving health problems, and inancial stress is a prime
cause o personal stress.3 The recession has resulted in widespread inancial insecurity across all
employee age groups. In act, there is a virtual epidemic o inancial illness.
As much as employers have been ocused on traditional health and wellness, there is compelling
evidence that inancial illness also contributes to health care costs, as well as to reduced
productivity. Employee inancial security may be a major driver in accomplishing business goals.
fig. 4.5
A geeratios o te wororce ser rom facia i-eat
Gen Y Gen X
ob security
Have trouble paying bills
All employeesEmployees who report thathey are very concerned about:
Employees who strongly agree they:
YoungerBoomers
OlderBoomers
Live paycheck to paycheck
52%
33%
43%
49%
32%
41%
50%
30%
40%
51%
31%
43%
52%
23%
35%
Having enough money
o make ends meet 49% 52%53% 58% 52%
3 Health and Personal Finances, The Personal Finance Employee Education Foundation, (http://www.personalfinancefoundation.org/research/hpf.html).
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INANCIAl IllNeSS IS lINkeD to PhySICAl IllNeSS
There is an association between health risk and the kind o stress experienced with inancial
struggles. The Study shows that employees who say they are not in control o their inances, or who
live paycheck to paycheck, are more likely to report worse health than those not similarly stressed.
Employers recognize this dynamic. Over two-thirds (69%) say that inancial stress contributes tohealth costs at their company.
fig. 4.6
Poorer eat is associate wit stress facia sitatios
Employees who report they are verymuch in control of finances
Employees who strongly disagree thatthey live paycheck to paycheck
Employees with excellent/very good health
Employees with fair/poor health
0%
70%
68%
7%
65%
7%
fig. 4.7
Stress rom ebt is associate wit a rage o eat probems tat impact costs a proctivity 4
Headache Severe anxiety
51%
Muscle tension Ulcers ordigestive tract
problems
Severedepression
Heart attacks
0%
60%
High debt stress
Low debt stress
31%
44%
15%
29%
4%
27%
8%
23%
4%6%
3%
4 AP-AOL Health Poll Debt Stress: The Toll Owing Money Takes on the Body, 2008.
I in sss isa div inss psicamina andis a mid. W avs ppavin nanciass i nDisaiiis a Dpssin is p.HR Professional
(1,0003,000 employees)Chicago, July 2010
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INANCIAl StreSS AlSo StIleS ProDuCtIVIty
Employers agree that inancial stress, in addition to impacting employee health, also aects
productivity. Fity-eight percent say that inancial illness contributes to employee absences at their
companies, and an amazing 78% also agree that worry about personal inancial problems while at
work can distract employees to the point that they are less productive.In act, according to the Study, 27% o employees admit they took o unplanned time and/or were
distracted at work dealing with personal inancial issues. This was especially true or younger workers.
fig. 4.8
Abseteeism a preseteeism e to facia stress ca tae a to o proctivity
Say employees are less productive
while at work at our company whenthey are worried about personalfinancial problems
78%Say that financial stress contributes to
employee absences at our company
58%
EMPLOYERS EMPLOYERS
INANCIAl eDuCAtIoN AND guIDANCe CAN ProMote INANCIAl WellNeSS
Changing inancial behaviors can create a sense o inancial control and help reduce stress. But
many employees lack a source o sound inancial advice and guidance; nearly one in two employees
reports that they do not currently consult with anyone regarding personal inancial matters, and one
in ive seeks advice rom a riend or relative who is not a inancial proessional.
More than hal o employees surveyed said that they would be interested in their employers helping
to ill this gap by providing inormation on how to address issues that can create inancial stress.
fig. 4.9
Empoyees wo ave bee abset rom wor e to facia cocers are especiay itereste i
avice a giace rom teir empoyers
I s i v daWv ad s
man mpsws msav n incs, isps was aidff, sic.W sin a asnismsndins isss
HR Professional(4,000+ employees)
San Francisco, July 2010
TESTIMONIAL
Are interested in financial adviceand guidance
ALL EMPLOYEES
EMPLOYEES WHO HAVE TAKEN TIME OFF
FROM WORK OR SPENT MORE TIME THINKING
ABOUT PERSONAL FINANCIAL ISSUES
52%Are interested in financial adviceand guidance
81%
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78% mps a as p a insin civin asamn asws w mcincm iimn savinwd na.
fig. 4.10
Yoger a oer worers ave ieret preereces or ow tey wo ie teir empoyerto provie facia ecatio i te worpace
% of employees who expressed interest:
0%
90%
Online tools (e.g., written materials, learningmodules, calculators, or scenario planning)
69%66%
75%79%
Gen Y YoungerBoomers
OlderBoomers
Gen X
0%
Financial planning/retirement webinarsvia the internet
90%
Financial planning/retirementin-person seminars
55%53%
62% 63%
65%
54%50%
Gen Y
63%
YoungerBoomers
OlderBoomers
Gen X
Gen Y YoungerBoomers
OlderBoomers
Gen X
Advice and guidance from an expertvia telephone
50%
37%34%
Gen Y
46%
YoungerBoomers
OlderBoomers
Gen X
INSIGHT
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INCoMe ProteCtIoN CAN helP SuStAIN INANCIAl SeCurIty
In addition to providing inancial advice and guidance programs, employers can help their
employees gain a measure o inancial security by providing access to adequate amounts o lie
insurance and disability income insurance. People who eel in control o their inances are more
likely to take planning steps to protect their amilies against the eects o premature death
or being unable to work due to injury or illness. This can contribute to peace o mind and less
distraction at work.
fig. 4.11
Empoyees wo ow ie a isabiity coverage worry ess abot facia isses
0%
50%
Employees who own
Employees who do not own
Disability insurance
Employees with disability and/or life insurance who say they strongly agree that because of workplace benefits,
they worry less about financial issues
Life insurance
46%
26%
43%
25%
INANCIAl WellNeSS beNeItS WorkerS AND eMPloyerS
Helping employees reduce and manage their inancial stress has a positive impact that is recognized
by both workers and employers. It is an important and eective way to help achieve the goals o
wellness programs reduced health costs and improved productivity.
fig. 4.12
Empoyees wo ee strogy tat teir beefts rece worry are more iey to report better eat
Report fair/poor health
7%Report excellent/very good healthOF EMPLOYEES WHO WORRY LESS BECAUSE
OF BENEFITS AT WORK
OF EMPLOYEES WHO WORRY LESS BECAUSE
OF BENEFITS AT WORK
67%
I dn in isa scI ins dnia cnncin [wn iinsanc nand disaiins andnancia wnssHR Professional
(4,000+ employees)
San Francisco, July 2010
TESTIMONIAL
74% mps wff wnsspams cnca wnssiniiaivs wd m ffcivi incddpams andsvics p
mpsmana inancia sss.
INSIGHT
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WellNeSS ProgrAMS CAN reINorCe reteNtIoN
Wellness programs not only help companies reduce costs and improve productivity, they can also
help drive loyalty. Employees who participate in wellness programs are more likely to report loyalty
to their employer and perceive that their employer is more loyal to them. In addition, they are more
likely to say that beneits are a reason they remain with their employer.
fig. 4.13
Empoyees wo ave access to, a participate i, weess programs are more iey to be oyato teir empoyer
Believe their companyis very loyal to them
Feel very loyal totheir company
Say benefits are an importantreason they stay at their company
0%
80%
Participate in company wellness programs
Do not participate
73%
27%
62%
38%
62%
38%
Employees who:
I pp aavin nanciadifficis, andan mp canp, a ads id pa mndsamn aand as snds amssa w cmpana is aca a amiand n s mp andIm mpHR Professional
(4,000+ employees)San Francisco, July 2010
TESTIMONIAL
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gauge the need
To maximize the eectiveness o advice and
guidance programs in the workplace, irst
determine the kind o support employees
require a preerence or retirement
planning, basic inancial literacy, income
protection advice or maybe debt counseling.
consider Worker ages
Consider generational preerences whendeciding the best ormat or providing the
inormation. Younger workers may preer
the convenience and sel-serviceaspects
o online webinars and podcasts on their
own time.
taP into outside resources
Work with providers to develop and promote
on-site seminars or inancial education and
planning. Usually theres no cost to employers
or employees or these services. Also, dontassume that only older workers are interested
in retirement planning; many younger
workers see what is happening to their
parents and are interested in how they can
be better prepared.
offer essential tools
Connect employees to online inancial tools
and calculators. There are eective online
resources such as lie insurance calculators
and retirement planning tools that
employees can use to help assess inancial
needs and plan appropriate solutions. Many
carriers, brokers and government websites
oer such resources, which would be helpul
to employees i they know where to ind them.
focus on hoW emPloYees gain
Frame the potential beneits o wellness
initiatives in terms o improved quality o
lie or employees not reduced costs or
the company.
reinforce behaVioral change
Rewiring bad habits is hard and takes
repeated and regular reinorcement. This
is not a once-and-done commitment.
Insight to Action
Investing in inancial wellness.
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heADS IN the SAND
Given the recession and a sluggish economic recovery, it is no surprise that the Study inds many
employees eeling concerned and vulnerable about their inancial security. O more concern, is an
apparent inertia to take action to get themselves on a better track. It would seem that many are
unaware o the risks they ace or perhaps earul that the solution is beyond their control.
INCoMe INterruPteD
Most working Americans rely on their income to cover essential living expenses or themselves
and those who depend on them. But what happens i that income is interrupted? Forty percent o
survey respondents o all ages admit that they currently live paycheck to paycheck, and 45% o theworkorce says they could not cover inancial obligations or more than a month i they lost that
paycheck.5 In act, most employees are not in a position to pay their bills or very long in the event
o income loss, but many have done little to protect themselves against that possibility.
CoNCerNeD but Not CoVereD
What i the principal wage earner in the amily was unable to work because o illness or injury?
Although more than hal o employees (56%) say they are very concerned about this possibility,
only hal (53%) o these worried workers have disability income insurance to protect their incomes.
In addition, less than a third o all surveyed employees have calculated how much income they
would need to meet essential living expenses in the event o illness or injury that prevented them
rom working.
Similarly, 51% o survey respondents are very concerned about the impact o their premature death
on amily inancial security, but only about two-thirds o them have lie insurance coverage. And less
than a third have calculated their income replacement needs.
An alarming number o those who have obtained insurance suspect that their coverage levels are not
adequate to maintain their liestyle i disaster were to strike. Forty-nine percent o those with disability
income insurance and 41% o those with lie insurance say they may be underinsured, or do not know
i they have enough coverage to maintain their liestyle.
Protecting and Preserving IncomeEmpowering Employees to Conront and ControlTeir Economic Realities
5
MetLife, 2010 MetLife Study of the American Dream , 2010.
41% s wii insancsa ma ndinsd,
d n nwi avn cva mainaini isin vn pma da
INSIGHT
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fig. 4.14
Most respoets ave ot cacate teir icome repacemet ees
Employees who have calculated how much theywill need to protect against loss of income due
to death of a wage earner in the household
Employees who have calculated how much theywill need to protect against loss of incomedue to a health problem of a wage earner
in the household
No
Yes
Not sure
61%
7%
32% 62%
8%
30%
bArrIerS to INCoMe ProteCtIoN
Many people preer to believe that bad things will not happen to them; denial can play a large
part in why people do not take the necessary steps to protect their income. Unortunately, the
statistics do not support this illusion. The Social Security Administration estimates that one in our
20-year-olds will become disabled beore reaching age 67.6
Also, many mistakenly believe that other employee beneits would kick in to replace lost income
which is not the case. Disability beneits may be available through Social Security, but can
sometimes be diicult to obtain. Government disability beneits are only available i a person is
expected to miss at least a year o work, or their illness or injury is expected to end in death. 7
When asked why they do not purchase levels o coverage that would better protect them,
employees cite lack o money: 39% say they cannot aord to pay or more disability coverage,
and 61% say they cannot aord to pay or more lie insurance. Communicating the cost-eective
value o their group beneits program may help stimulate participation.
ProteCteD INCoMe MAkeS or loyAl eMPloyeeS
Helping employees obtain adequate income protection has advantages or employers too, in the
orm o increased employee loyalty. Non-medical beneits including income protection products
are very important loyalty drivers or 59% o employees. Yet only 37% o employers recognize
this. In reality, the right amount o lie and disability coverage can bring high employee satisaction
at relatively low cost.
hIttINg the CoVerAge CeIlINg
The workplace is the primary source or obtaining insurance coverage or 88% o employees
who own disability insurance and or 91% o employees who own lie insurance. But it is not
always possible or employees to obtain enough coverage through their current beneits program.
Sometimes the maximum oered is not enough to meet employees personal needs. This was the
reason cited or being underinsured by 42% o employees or disability income protection and or
19% o employees or lie insurance.
6 Social Security Basic Facts, Social Security Online (http://www.socialsecurity.gov/pressoffice/basicfact.htm).7 Social Security Frequently Asked Questions, How does Social Security decide i f I am disabled? Social Security Online (http://www.social security.gov).
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However, those who have hit the maximum ceiling oered by their employers are very interested
in having an opportunity to purchase additional coverage through the workplace i their company
were to make higher coverage levels available. Yet currently, o employers who oer some lie
and disability insurance to employees, only 38% say it is very likely they will oer access to
supplemental levels o lie insurance, and only 28% say it is very likely they will oer additional
long-term disability coverage.
PArIty or hIghly CoMPeNSAteD eMPloyeeS
Because o group plan maximums, there can be a signiicant gap between the insurance coverages
that top talent needs and what the standard company group plan can provide, especially when it
comes to lie and disability beneits. Closing this gap can increase a companys ability to compete or
the critical skills they depend on.
Creating an executive plan carve-out that supplements executive Group Lie with Group Variable
Universal Lie (GVUL) insurance and augments Group Disability coverage with Individual Disability Income
(IDI) insurance can be a cost-eective way to provide income protection parity or these key employees.
However, only 46% o companies report they oer executive beneits.
PAyINg or ProteCtIoN
Having disability income insurance through work is considered important to employees so much so
that 58% o respondents say that they are prepared to pay the ull cost o the product, i necessary.
Fity-our percent eel the same way about lie insurance. Providing access to supplemental levels o
coverage on an employee-paid basis can help meet this demand without adding to the beneits budget.
fig. 4.15
Empoyees beieve it is importat to ave israce avaiabe i te worpace eve i tey ave to
pay 100% o te cost
0%
Gen Y Gen X YoungerBoomers
OlderBoomers
70%
55%55%57%
Disability insurance
63%
Gen Y Gen X YoungerBoomers
OlderBoomers
44%
51%
58%
Life insurance
60%
65% mps wav maimdisaii cvaavaia mi mpa insd in ppni pcasm wpac.
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focus attention
Help employees understand the risks they
ace, and how they can better provide or their
amilies by protecting against such risks.
clarifY costs
Demonstrate that income protection
insurance is relatively inexpensive compared
to the costs o not having coverage idisaster strikes.
share useful tools
Provide access to online tools through
carriers and brokers that help simpliy
beneits calculations.
simPlifY concePts
Clariy explanations or complex insurance
products so that there is no reason or
employees to postpone decisions.
let them choose
Oer employee-paid lie and disability
insurance options to give workers access
to adequate coverage amounts.
Insight to Action
Employers can help employees protect the income that underpins inancial security
in their everyday lives.
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Many employees are even more unprepared or what might lie ahead in retirement. Since the
advent o the MetLie Annual Study of Employee Benefits Trends, the story has been one oemployees being behind in savings and worried about the outcome. And the recession has done
nothing to change this grim situation. Fity-two percent o employees surveyed are behind
schedule in retirement savings and 10% have not even started.
fig. 4.16
Over 60% o Boomers iicate tey are bei i savig or retiremet
Employees were asked to identify the scenario which best describes the current progress of their retirement savings
0%
Behind schedule70%
48%
62%60%
Achieved/on track to achieve goals
19%
24%
Gen Y
43%
35% 33%
YoungerBoomers
OlderBoomers
Gen X Gen Y YoungerBoomers
OlderBoomers
Gen X
0%
Havent yet started to save for my retirement40%
11%9%
7%
Dont have savings goals
11%
9%
Gen Y
9%
14%
8%
YoungerBoomers
OlderBoomers
Gen X Gen Y YoungerBoomers
OlderBoomers
Gen X
Income or Retirement
I in a m mpsa wina in a
npacc I dnin ainin aimn. ta inina cis n w.HR Professional
(1199 employees)
Chicago, July 2010
TESTIMONIAL
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lookINg to SoCIAl SeCurIty to MAke uP the ShortAll
Social Security beneits will be a major source o retirement income or about a third o workers,
with 85% o workers planning to rely on it to some degree. However, while Older Boomers are
counting on Social Security to be there or them, others are not so sanguine. Eighteen percent o
Younger Boomers now in their early 50s question whether the Social Security saety net will beavailable by the time they retire.
fig. 4.17
Over oe-tir o empoyees are cotig o Socia Secrity or a or a major portio o teir
retiremet icome.
All Employees
Only source of retirement income
A major source of retirement income
A moderate source of retirement income
A minor source of retirement income
An unreliable source of retirement income, as it mayno longer be available by the time of retirement
30%
9%15%
16%
30%
fig. 4.18
Yoger Boomers are ess cofet abot te avaiabiity o Socia Secrity ta Oer Boomers
Social Security will not be a reliable source of retirement income as it may no longer be available by the time of retirement
0%
30%
YoungerBoomers
18%
OlderBoomers
6%
Why olDer eMPloyeeS CoNtINue to Work INSteAD o retIrINg
Employees age 55 and older who are behind in saving or retirement are more likely to say they
keep working because they need the money (64%). But those who are on track in their retirement
planning are more likely to say they are working to stay meaningully engaged (63%).
Both groups say that maintaining health insurance beneits until they qualiy or Medicare is an
important reason that they continue to work.
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eMPloyeeS Are Not DoINg the MAth
In general, Boomers and Gen X are still expecting to retire at age 65 even though they are behind
schedule in their savings. And, on average, they have planned or only 20 years in retirement.
However, based on lie expectancy data, a man age 65 has a 50% chance o living beyond age 85.
A woman age 65 has a 50% chance o living beyond age 88. And or a couple, both age 65, at leastone person has a 50% chance o living beyond age 92.8 And because these igures are averages,
50% o the people will live longer than the 20 years they have planned or.
fig. 4.19
O average, empoyees ave pae or 20 years i retiremet a to retire rom wor at age 65 bt tis
is iey to eave more ta a sort o savigs give crret ie expectacies
Age at retirement
64.8Years planned for in retirement
20
AVERAGE OF ALL EMPLOYEES AVERAGE OF ALL EMPLOYEES
retIreMeNt requIreMeNtS MAy be too DePreSSINg to CoNteMPlAte
Over hal o survey respondents (56%), including those on the cusp o retiring, are not conident
that they know how much annual income their savings will generate once they retire. And most are
not doing the calculations to ind out.
They have various reasons or this, but the reality is they ear that the resulting number will be more
than they have. And that number is likely more than they can save in their remaining working lie,
especially i they have to retire ive years beore they planned to. Sixty-our percent o people who
are over 50 say that their retirement would be in jeopardy i this happened.
fig. 4.20
Eve tog tey are cose to retiremet, oe-tir o Boomers say it is too eary to ow wat tey
wi ee, sowig ac o paig or teir retiremet iestye
Employees indicate the following reasons for why they have not calculated how much annual income they will need in retirement
0%
40%
Younger Boomers
Older Boomers
Dont understandhow to calculate it
28%
31%
Dont havethe money
39%
37%
Dont havethe time
10%
6%
Dont feel thatthey need to
5%
13%
Too early to knowwhat is needed
34%33%
8 Society of Actuaries Annuity 2000, Male and Female Tables.
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A relIAble PAyCheCk IN retIreMeNt
Employees are used to budgeting their living expenses based on a regular paycheck, and lie in
retirement might be easier to manage i it included a predictable and guaranteed income stream
a retirement paycheck.
For several years, the Study has noted that employees have expressed interest in receiving someor all o their retirement savings in the orm o a guaranteed income stream. Sixty-six percent are
interested in learning more about how they could use annuities as part o their 401(k) plan.
Nearly hal o employers surveyed strongly agree that oering employees retirement products that
provide a guaranteed stream o income during retirement years is an important beneits strategy, but
only 15% o employers report that they currently oer annuities at the point o distribution in their
deined contribution plans. And only 28% o those companies that do not oer an annuity option
as part o the 401(k) plan indicate that they are interested in doing so.
Many employers are understandably somewhat hesitant to oer annuities because o iduciary
concerns. However, given the signiicant employee interest in options that provide a guaranteed
stream o income rom retirement savings, it may be time or employers to work closely with
providers to move more quickly, especially regarding sae harbor legislation.
fig. 4.21
Empoyees are itereste i aities, bt empoyers are ot yet respoig
100%
15%
Employers who currentlyoffer annuities
100%
28%
Employers who do not currentlyoffer and are interested
in offering annuities
69%
100%
Employees who would like theiremployer to offer an annuity
option as part of their 401(k) plan
gettINg SerIouS About SAVINg
Developing a serious savings habit is more likely when saving becomes simple and routine. Many
employees, including younger workers, are interested in auto-enrollment savings options or
retirement to help them sta