Americans have seen only modest gains in their paychecks over the past few years but this does not necessarily mean that businesses are failing to boost worker compensation. For example, benefits (vacation time, health insurance, bonuses, etc.) have been a big driver of rising employment costs since the recession ended, and the share of worker compensation that comes in the form of benefits has risen markedly over the past decade. Although sluggish wage growth being partially offset by rising benefits highlights the fragility of the current economic expansion, it is clear that employers must do something to lift worker compensation if they want to continue to attract and retain talent in a tightening labor market.
Fortunately, a study from the Employee Benefit Research Institute (EBRI) found that Americans greatly value their workplace-provided benefits. Specifically, more than a third (36 percent) of surveyed adults (ages 21–64) said that they consider the benefits package offered by a prospective employer to be an “extremely important” factor in their decision to accept or reject a job offer. Another 41 percent said that benefits offerings are “very important,” and 22 percent reported that they had already “accepted, quit, or changed jobs” solely because of the benefits that an employer offered or failed to offer. The vast majority (81 percent) of surveyed workers said that they are at least “somewhat satisfied” with their current benefits package but only 14 percent reported being “extremely satisfied.”
One reason for this could be that many workers simply lack an understanding of the benefits made available to them. At least that is what a new study from Guardian Life suggests, which found that 80 percent of surveyed workers said that they believe they understand their benefits “very well” but less than half (49 percent) could correctly answer at least eight out of ten true or false questions about benefits. The average worker answered around seven question correctly, equivalent to a “C” letter grade, and roughly one in five respondents outright failed the quiz. What is worse is that 62 percent of surveyed employers said that they believe their workers understand their benefits “very well,” implying that there is a lot of room for improvement in the arena of benefits communication.
The survey also found that employees seem to prefer receiving information about their benefits from human resources (HR) rather than an insurance company representative or other sources. When asked about what topics workers would like to receive additional information about, the most popular responses were saving for retirement, protecting income in the event of an injury or illness, ways to reduce debt, and more specifics on how their benefits work and how to enroll. Businesses concerned about talent retention should definitely consider making such improvements because three-quarters of surveyed workers who said that they highly value their company’s benefits reported that they want to stay with their employer for at least another five years, compared to just 53 percent among respondents who put a lesser value on current benefits offerings.
Sources: U.S. Department of Labor, Bureau of Labor Statistics, Wall Street Journal, EBRI, Guardian Life, Benefits Pro, NAPAPost author: Charles Couch