What Do Workers Really Want in a Benefit Package?
From the April SullivanKreiss newsletter:
In many firms, employee benefit offerings vary little from year to year. The common mind-set is that what worked fine five or 10 years ago suits us well now too. But the needs and expectations of workers do change over time, and if the benefit package is outdated, it could be a factor in your turnover rate and in recruiting.
A big challenge to adjusting a benefit plan to best serve employees is the difficulty in finding out what they really want. The larger the firm, likely, the more difficult the task.
Many companies base their benefit packages on industry benchmarks that can be tracked from industry-wide surveys. Some firms also use internal employee surveys to track trends in benefit wants and needs, and employee satisfaction.
Its interesting to note that employee surveys can produce somewhat surprising results in terms of employee and employer perceptions about the working environment, salary, and benefits. The 2004 Job Satisfaction Survey, conducted by the Society Human Resource Managers (SHRM) and the now-defunct CNNfn cable network, highlighted some differences on the perceptions of the importance of job-satisfaction factors between employees and HR professionals.
Each group ranked 21 factors according to their importance. HR managers ranked them according to what they believed employees would most value. On the employee side, Benefits came in at number one; HR pros ranked it number three. Relationship with immediate supervisor was the top choice of HR pros, while that factor ranked seventh on the employee side. Perceived value of benefits not always consistent Some companies have found that certain benefits improve retention for some groups of employees, but have little impact on others. For example, according to a 2005 SHRM magazine article, IndyMac Bank, a California mortgage lender, found that while stock awards had an overall positive retention influence on all employees, turnover for management was only slightly lower for those awarded stock than those who weren’t, but for operations staff granted stock, turnover was more than 50 percent lower.
It may be that managers took stock options for granted and were motivated to stay or leave based on other factors, while operations personnel saw stock awards as above-average rewards for their positions, and were more likely to stay as a result.
There are a few lessons we can deduce from IndyMacs experience:
The impact of your benefit plan on employee satisfaction can be measured with solid data.
Different employee groups value certain benefits more than others.
Analysis of surveys and turnover data gives insight into which benefits impact turnover.
So, it makes good sense to survey employees at least every few years on benefits. If you have annual employee satisfaction surveys, add a section on benefits. With any employee survey, it’s critical to share the results with the whole firm. Then, decide what action steps are appropriate and let everybody know about them.
The feedback and action step is critical. If you fail to address common concerns cited in the survey, employees will likely perceive management as being out of touch or of ignoring legitimate issues. That’s not to say that every item on the employee wish list needs to be fulfilled, but an explanation of what is and what isn’t practical is in order. At worst, this lets everyone know that their concerns have been heard and noted. Change is a constant Its important to realize that societal changes have great influence over which benefits employees value. Telecommuting, for instance, wasn’t very practical for many workers 20 years ago, but with the proliferation of PCs and the development of the Internet making working from home easy, it is a valued perk for many today. As commutes lengthen and the price of gas rises, this benefit only becomes more desirable for many employees.
Here’s another benefit that bears watching: As baby boomers exit the workforce and members of subsequent generations with different work/life values acquire increasing influence in the workplace, elder-care benefits might become as important as child-care benefits. The huge baby boom generation is likely to live longer than any previous generation. Many of their children will face difficult work/life balance challenges as their parents’ age and need assistance. Firms that are able to accommodate employees on this issue may have an edge in recruiting and retention.
Other benefits issues that impact employees and society as a whole are bound to make their mark over the next decade. For example, the so-called Generation X, now entering middle management positions in large numbers, highly values more vacation time, more flexible hours, and more training to help advance their careers, according to national surveys.
Making sure that benefit plans are in sync with employees’ expectations is important in order to keep turnover down and aid recruiting. We strongly advise keeping regular tabs on what the competition is doing in this area and what your employees want.
What do you think? Let us know.
Kim can be reached at email@example.com .