According to MetLife’s 10th Annual Study of Employee Benefits Trends, this percentage climbs to 55% for Gen X workers and 66% for Gen Y.
The majority of surveyed employers (60%) feel economic conditions are creating additional opportunities to leverage workplace benefits programs to achieve their objectives, and only about 10%, regardless of company size, say they plan to reduce benefits. Among the employers that see additional opportunities to leverage their benefits programs, 91% feel strongly that benefits can be used to retain employees, 86% say that benefits can greatly increase employee productivity and 80% feel that benefits can greatly help attract employees.
The study also found that younger workers are more risk averse than older workers when it comes to their investments; 81% of Gen Y employees say they want guarantees that offer stable but somewhat lower returns compared to 76% of surveyed Baby Boomers. Perhaps fueling this conservative approach among the youngest workers is planning a retirement without Social Security benefits. Just 16% of employees believe that Social Security benefits will be available for Gen Y workers when they retire as they are for today’s eligible retirees, and just 24% of employees believe these benefits will be available for Gen X.
Having enough money in retirement is a growing concern for younger workers. For instance, in 2003 one-third (33%) of employees ages 21 to 30 were very concerned about running out of money in retirement. Now more than half (52%) of that age group are very concerned.
Sixty-two percent of surveyed Gen Y and Gen X employees are willing to bear more of the cost of their benefits rather than lose them. More than half, 57%, are interested in a wider array of voluntary benefits offered by their employer, as compared to 43% of Baby Boomers. The study also found that employers recognize this interest, as 62% of employers agree that in the next five years employee-paid benefits will become a more important strategy than they are today.
Retirement Readiness: A Growing Issue
The study illustrates that the past several years have eroded retirement savings, and the percentage of employees who have fallen behind schedule in their progress towards retirement savings has increased from 45% in 2004 to 50% in 2011. More than one-third of surveyed Baby Boomers (35%) say that as a result of economic conditions they plan to postpone their retirement.
The study found that only 39% of employees overall feel very confident in their ability to make the right financial decisions for themselves and their families, and 72% express interest in having various financial education programs made available in the workplace. The study also found that attending these programs can make a difference; 58% of people who attended a financial education program feel very confident in their decision making contrasted to 43% of people who had a program available to them but did not attend.
Loyalty Gap Widens
The percentage of employees who feel a very strong sense of loyalty towards their employer is only 42%—a seven-year low. One-in-three people would like to work for a different employer in 2012, but that number climbs to one-in-two for Gen Y employees. Not too surprisingly, people who say they hope to be working elsewhere are nearly three times as likely to admit to a decrease in the quality of their work. Conversely, the percentage of employers who feel a very strong sense of loyalty towards their employees has grown to 59% in 2011—a seven-year high.
More than half of surveyed employees (58%) say benefits are an important retention driver—and this is highest among Gen Y (63%) and Gen X (62%) workers. The study highlights a correlation between benefits satisfaction and loyalty. For instance, 61% of employees who are very satisfied with their benefits say they feel a very strong sense of loyalty to their employer compared to 24% of employees who are very dissatisfied with benefits.
While employers seemed to understand how items like salary and wages, advancement opportunities and company culture influence employees’ feelings of loyalty, they continue to underestimate the power of leveraging their benefits programs. For example, while 66% of surveyed employees say that health benefits are an important driver of their loyalty, only 57% of employers believed so. The divide widens when it comes to retirement and non-medical benefits. For instance, 59% of employees said retirement benefits are very important for influencing their feeling of loyalty toward their employer, but only 42% of employers realized this, and 51% of employees said the same for non-medical benefits like dental, disability and life insurance, while only 32% of employers thought so.
The 10th Annual MetLife Study of Employee Benefits Trends was conducted during 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 older, at companies with a minimum of two employees.