Employers have many objectives when planning what benefits to offer employees. Certainly, they want their benefits packages to help attract top talent and boost engagement and loyalty among employees. Employers also hope their benefits packages help workers successfully blend work and home life, and they like to offer benefits that will enable employees to participate in programs aimed at increasing wellness—physical, emotional, and financial. And certainly a benefits package needs to be affordable enough for the employer to offer.
But a new study from insurance giant MetLife shows retention is the top priority for most employers. Eighty-three percent of employers participating in MetLife’s 15th annual “U.S. Employee Benefit Trends Study,” named retaining employees as an important benefits objective. That compares to 80 percent who named increasing employee productivity and 79 percent who named controlling health and welfare benefit costs. Over half of the employers (51 percent) said that retaining employees through benefits will become even more important in the next three to five years.
A factor driving the concern about retention is the rise of the gig economy, according to the study. As more people turn to freelance work instead of choosing to work for one particular organization, employers may be facing a diminishing pool of people who want to be traditional full-time employees.
Interest growing in gig economy
Millennials, in particular, show a strong interest in gig economy work. The study found that 51 percent of employees said they are interested in contract or freelance work instead of working a full-time job that may not offer opportunities for more flexible hours, the ability to work from home, and project variety. The study found that a majority of employers (59 percent) understand that the growth of temporary jobs will continue to make an impact on the workplace in the next three to five years.
With technological advances making app-based work possible and a greater demand for work that meshes with employees’ nonwork lives, it’s no wonder the gig economy is expected to grow.
“From the standpoint of workers, the gig economy can offer improvements to the work-life balance over what has traditionally been possible in most jobs,” Robert P. Tinnin, Jr., an attorney at the Tinnin Law Firm in Albuquerque, New Mexico, wrote in the April 2016 issue of New Mexico Employment Law Letter. “Rather than being forced into a job because they are unable to obtain employment, workers are free to pick up whatever temporary ‘gigs’ they can land and select jobs they’re interested in.”
But employers taking advantage of the new style workforce must take care not to misclassify workers as independent contractors when, by law, they should be considered employees.
Five ways to address challenges
So how should employers respond to the challenges affecting their benefits planning? The MetLife study offers five suggestions for meeting employees “where they are.”
- Offer a breadth of benefit options. Lots of options can help alleviate anxiety related to integrating work and home life.
- Offer tailored solutions. An increasingly diverse workforce calls for benefits that fit a wide range of ages and family needs.
- Offer the right expertise. For example, employees appreciate benefits programs that offer wellness advice and financial expertise.
- Provide clearer information. Employers are wise to make sure employees understand how to choose the benefits options that fit their needs.
- Simplify enrollment. A simpler, clearer process enables employees to understand the value of their benefits. That understanding enhances their loyalty and commitment to their employer.
Customization is key
Changes in the workforce that have come about in recent years mean millennials are working alongside people old enough to be their grandparents, and that makes the “tailored solutions” aspect of benefits even more important.
“Employees have very distinct wants and needs and expect their employers to meet them,” Todd Katz, executive vice president, Group Benefits, at MetLife, said in a statement accompanying the study. “To attract and retain top talent in this new era, especially during a time of decreasing unemployment rates, employers have an opportunity to adapt their workplaces to address the unique needs of their employees. This is especially critical when it comes to benefits.”
Millennials especially crave customization, Katz said. “Today, our lives reflect our preferences. We choose how our coffee is made, create personalized playlists, and decide which apps we have on our phones. In all aspects of our lives, we can make choices to meet our unique needs. The same should apply when it comes to benefits.”