Employee Retention in a Growing Talent Shortage

Unlocking value for clients with Total Rewards

by Andrew Stocker

Employees dictate the success of any company, and companies with a committed, loyal and productive workforce are likely to see the best results. However, employers across the globe are struggling to attract and retain skilled talent.

Historically, salaries and bonuses have been the two most critical factors for employees when choosing where to work—and how long they ultimately stay. While still important, monetary benefits form just part of the overall equation today, with employees instead seeking broader benefit options. Consultants and intermediaries are being tapped to help clients develop non-cost prohibitive benefit packages that are designed not only to attract prospective employees, but to retain them for the long haul.

Voluntary and wellness benefits, as well as retirement and financial planning options, help tip the scales. But beyond just offering these benefits, brokers must help their clients promote them properly, so that employees can take advantage of what’s available. Doing so will increase a company’s overall value proposition, support workplace culture, and ultimately improve business results because of a more healthy, loyal, and productive staff.

The Talent Struggle is Real

In most markets surveyed in MetLife’s Employee Benefits Trend Studies (EBTS), companies are struggling to find qualified candidates, which is why employers around the world are feeling a talent crunch. Even if employers do discover talented workers, retaining them remains a challenge.

More than half of employers in India (69 percent), China (66 percent), Poland (54 percent) and the United Arab Emirates (53 percent) say that recruiting remains their top challenge, according to MetLife’s study. In countries where the lack of talent isn’t as concerning, employers have a different problem to deal with: employees planning to work for a different company in the near future. At least one-quarter of employees in many countries—India (47 percent), United Arab Emirates (39 percent), Egypt (33 percent)—strongly agree that they would like to be working elsewhere within a year.

In a cost-focused economy, employers are no longer able to simply offer pay increases or bonuses to remain with the company, nor is it a compelling enough selling point to employees who are interested in a much broader range of benefits. In order to retain employees, companies are tasked with developing a creative benefits package that improves work-life balance and overall loyalty.

According to EBTS, 75 percent of employers across all geographies agree that benefit offerings are important when retaining employees. Similarly, employees could be convinced to stay with an existing employer because they value an improved benefits package.

Building a Mutually Beneficial Total Rewards Package

Given the increasing talent shortage and urge that employees have to switch companies, consultants and intermediaries play a critical role in helping their clients understand employee benefit needs and interests. Outside of medical and life insurance, voluntary and wellness benefits are the main priority, while options for retirement planning and financial advice are being labeled as “must-have” benefits.

Once benefits are identified, consultants and intermediaries need to help their clients communicate total rewards packages to ensure that employees fully understand the options and offerings. Our regression analysis predicts that the more employees value benefits, the more engaged, productive and committed they will be with their employer.

Voluntary Popularity

The offering and use of voluntary benefit plans has become a necessary addition to bolster total rewards packages. Voluntary benefits are attractive because they’re employer-endorsed, yet less cost intensive to implement. Employees can choose to participate and contribute all or a portion of the costs associated with particular benefits. Providing employees with the opportunity to select from an array of more personalized benefit options increases employee satisfaction and in turn, improves overall loyalty.

In the U.S., voluntary benefits have been on the rise over the last 10 years, with annual sales growing over 60 percent since 2004 to nearly $7 billion for 2014, according to Eastbridge Consulting Group. According to MetLife’s U.S. EBTS, 55 percent of employees are interested in receiving the option to select a wider array of non-medical benefits to be purchased on their own.

Outside of the U.S., interest in voluntary benefits is increasing among employers and employees. Nearly fifty percent or more of employees in 9 of the 11 countries surveyed say they are seeking a wider array of voluntary benefits to choose from and pay for on their own, and at least 60 percent of employers agree that it’s important to offer a variety of voluntary benefits.

For example, in Brazil, voluntary dental outpaces life insurance significantly. And even in recessionary markets like Greece, employees are finding value in contributing toward additional benefits. MetLife recently launched voluntary benefit capabilities in Greece, and employee participation in voluntary plans is up to 30 percent, underscoring the need to have products that will offer financial security from a trusted source.

Consultants and intermediaries should consider the following issues when starting a discussion with their clients. First, it is important to align product recommendations based on country and need. Products should meet the needs of the employee, based on potential insurance gaps created by public or social insurance schemes. Once the right product portfolio has been established by country, consultants and intermediaries should work with employers to determine the right media for enrollment by market. Although face-to-face enrollment is still a preferred media for enrollment in many countries, new technology is emerging constantly and is quickly becoming the preferred channel in markets across Asia and Latin America.

Healthy Life, Happy Work Life

As employers continue to adopt voluntary benefits plans to enhance total rewards packages, consultants and intermediaries should keep physical health and wellbeing offerings at the forefront. Non-communicable diseases—like obesity and diabetes have quickly become the leading contributor to rising health care costs in many countries. The good news is that technology continues to evolve making data and analytics more readily available around the globe, giving employers a fighting chance in controlling their health care spend and designing health and wellness offerings that are relevant and effective for their employee populations.

Despite the advances in access to data and analytics, nothing is more harmful to multinational employers than the impact an unhealthy workforce has on performance. Whether an employee is absent from work due to an illness, or whether they are at work physically but not mentally due to concern over health, the impact is significant.

Providing lifestyle benefits is one easy way to help employees stay healthy, happy and productive in the workplace. However, the formula for designing lifestyle and wellness programs is not an easy one because there isn’t a one size fits all approach, particularly when it comes to large multinational employers.

With many wellness programs available to employers, brokers need to help employers understand the programs that make the most impact by country and region. In the United Arab Emirates (UAE), although 87 percent of employees that participated in wellness programs felt the programs had a positive impact on their health, only 33 percent of all employees actively participated in these programs, underscoring the need to evaluate whether the right programs were selected for UAE employees.

The same study identified that over 69 percent of UAE employees actively want to participate in benefits connected to improving their work-life balance. As you can see, identifying the offering that will not only be widely accepted, but will also have a positive impact on the health and productivity of the employee population is important.

Financially Fit

In addition to looking for help with their physical wellbeing, employees are now turning to employers for financial education programs to serve as a solution for various financial needs.

Increasingly, employees are spending more time at work worrying about finances. According to the China EBTS, 46 percent of employees’ reported spending more time on financial matters at work than they felt they should. Filling the gap of financial security and retirement for employees by offering on-site workshops with financial advisors and educational resources will bolster the total rewards package and improve overall employee satisfaction.

MetLife is already seeing positive outcomes from its financial education pilot programs in Japan and India, which are designed to empower employees to make smart financial decisions through on-site guidance at work.

The focus on finances can also be seen in the U.S., as nearly two-thirds (62 percent) of employees say they’re looking to their employer for more help in achieving financial security through employee benefits, according to the U.S. EBTS. Most employees are concerned about the future of their finances and what the standard of living will be in retirement.

Talk It Out

Helping clients create an innovative total rewards package won’t be nearly as effective if it’s not properly communicated. Many employees are unaware of the benefits being offered, how they work, and how to best to take advantage of them. So employers must provide details of what each benefit entails, how it meets their employees’ needs, and the expected costs associated with each rewards package.

Companies around the world still struggle to effectively communicate their benefit offerings to employees. When asked whether their benefit communications effectively educated them, less than half of employees in Brazil (43 percent), Russia (48 percent), the United Arab Emirates (38 percent), and the U.S. (37 percent) responded positively.

As consultants and intermediaries, it’s important to acknowledge that not only is each company different, but so are the countries and the ways that people like to communicate.

Key considerations include:

• Communicate benefits in a way that’s clear and concise
• Provide a variety of resources such as decision-support tools
• Implement year-round communication to keep employees educated and aware of all benefits and any associated deadlines
• Promote all benefits – not just some of them
• Understand how your employee base wants to be communicated with
• Know the latest benefits technology

The method of sharing information must be tailored toward channels that are appropriate for the employee base: one-on-one meetings, company websites, and brochures to name a few. Further changing the landscape are advancements in technology, such as the ability to offer an interactive digital reward statement or employees’ preference to manage their benefits via a mobile application. Providing employees with multiple means for absorbing the complexity of benefits packages will further improve an employer’s value proposition, but finding the right channels to communicate is paramount.

Rewards of Total Benefits

With a global talent shortage and a mindset shift in terms of preferred benefits, consultants and intermediaries must sit with their clients and reevaluate how benefits fit into their overall value proposition. Some pieces of advice include:

(1) customizing product recommendations by country and need – one size does not fit all,

(2) being well-versed on the latest technology options that are helping advance employee benefits, and

(3) knowing effective communication strategies that can help employers better promote their benefit packages while keeping in mind that this varies from country to country.

Loyal, productive and engaged employees are critical to a company’s success, and most are no longer enticed by big salaries and bonuses alone. Total rewards packages that are properly communicated and include a wide range of voluntary benefit options that help relieve financial stress and improve health and wellness make the most impact. And most importantly, employees will be better off financially and physically because of them. ◊