Growing Needs and Wants of Younger Generations
Require Rethinking Benefits Strategy to Rekindle Loyalty
NEW YORK–(BUSINESS WIRE)–Many younger employees, often the most numerous of a small business workforce, have seen the recession and its aftermath weaken their personal finances and impact their work life, and they would like to see their employers offer more assistance, a MetLife study has found. One-half of Gen Y and Gen X workers employed in smaller businesses (less than 500 employees) said current economic conditions were making them look more toward employee benefits to achieve financial security, even if in some cases they have to fund 100% of the cost themselves. Stress-inducing financial concerns of younger workers could also impact productivity as one in four of this group reported taking extra time off or dealing with financial issues during working hours.
Help for employees might become more readily available, too, if more employers capitalize on the opportunity to leverage voluntary benefits, where employees pay some or all of the cost, to improve employee loyalty and retention. More than four out of five smaller employers in MetLife’s 10th Annual Study of Employee Benefit Trends strongly agreed that an extremely important objective of employee benefits is retaining workers, a view that could pave the way for an enhanced program to recharge workforce loyalty where it has ebbed and to boost retention. Younger employees who were very satisfied with their benefits were much more likely to feel a very strong sense of loyalty to their employers – 72% compared with 46% of younger workers overall.
“It’s hard to over-estimate the importance of responding to the needs of younger workers on whose shoulders the future of a small business can depend,” said Anthony J. Nugent, executive vice president, Group, Voluntary & Worksite Sales, at MetLife. “Our study underscores that generational differences about benefits needs and preferences are not just reflections of age. Younger workers, particularly those in many smaller organizations that were hit very hard by the recession, and who are unsure about the future of Social Security, have a different benefits perspective than older generations, ” he noted.
Willing to do their part
Tellingly, the Gen Y and X generations, who comprised 56% of the small business workforce in the survey, also recognize that their goal of more financial security can entail a cost, and as a group they are willing to do their part, despite the financial strains some of them are feeling. Two-thirds of Gen Y and Gen X small business employees would be willing to pay more of the cost of benefits rather than lose them. Significantly, 54% of younger workers would be interested in having a wider array of benefits options, even if it means paying all of the cost for those voluntary benefits, such as life, dental, vision, disability, critical illness, or homeowner/auto insurance coverage, for example.
In contrast to smaller companies, voluntary benefits occupy a much larger portion of the benefits menus of larger organizations. The percentage of companies with 500-plus employees identifying voluntary benefits as a key element in their benefits strategy jumped to 57% from 43% a year earlier, while smaller firms saw an increase to 31% from 26%. Below are some voluntary insurance benefits, the percentage of younger workers interested in paying for them, and the percentage of small business employers who offer the benefit:
|Insurance||% Employees||% Businesses|
“There is no economic need for smaller businesses to leave popular voluntary benefits to the realm of larger companies, especially given the interest and willingness by many Gen X and Y employees to contribute to, or to fully pay for, benefits,” said Nugent. “With the newer enrollment systems and accompanying explanatory tools, it is now much easier to enroll employees with multiple benefits.”
Education lower cost way to build loyalty
As the keen interest in voluntary benefits indicates, strengthening employee loyalty, which has been on the decline for a few years, does not need to be an expensive proposition. One low-cost way to build loyalty is through financial education at the worksite. Almost three out of four small business employees are interested in their employer offering financial education programs, but only 29% of employers offered these learning opportunities.
The findings from the MetLife study are summarized in ‘Are You Listening? What Small Business Employees Want From Their Benefits, and How Employers Can Show They’ve Heard,’ available at www.metlife.com/sbtrends along with a wealth of other related benefits resources.
The 10th Annual MetLife Study of Employee Benefits Trends was conducted in September and October of 2011 and consisted of two distinct studies fielded by GfK Custom Research North America. The employer survey comprised 1,519 interviews with benefits decision-makers at companies with staff sizes of at least two employees. The employee sample comprised 1,412 interviews with full-time employees age 21 and over, at companies with a minimum of two employees. Of the interviews, 944 were conducted with decision makers at companies with fewer than 500 employees, and 685 interviews were conducted with employees who work for these smaller businesses.
GfK Custom Research North America is part of the GfK Group, one of the world’s largest and most prestigious market research organizations, operating in more than 100 countries. Headquartered in New York City, with 10 offices in the U.S., GfK Custom Research North America provides full-service market research and consulting services in the areas of Customer Loyalty, Product Development, Brand & Communications, Channels, Thought Leadership, Innovation, and Public Affairs.
Metropolitan Life Insurance Company (MetLife) is a subsidiary of MetLife, Inc. (NYSE: MET), a leading global provider of insurance, annuities and employee benefit programs, serving 90 million customers. Through its subsidiaries and affiliates, MetLife holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For more information, visit www.metlife.com.