nullSmall Businesses: Surviving Economic Woes and Employee Loyalty Challenges
By: Dr. Ronald S. Leopold, MetLife
The long-term outlook for American small businesses remains mixed, with promising signs of recovery evident earlier in the year now overshadowed by less favorable reports. But whatever the forecast, small businesses find themselves confronting a clear and present challenge - diminishing employee loyalty Employees of small businesses are not as loyal as they used to be several years ago and say they're considering a change in employers. According to MetLife’s 9th Annual Study of Employee Benefits Trends, the percentage of employees working for small employers (those with fewer than 500 workers) who say they have strong sense of loyalty to their employer has dropped to 44%, down from 62% in 2008. In fact, 34% of small business employees would like to work for a different employer.
In contrast, small business employers’ perceptions of employee loyalty have not changed much over the past few years. MetLife’s study found that 54% of small businesses employers currently believe that their employees have a strong sense of loyalty to them, nearly the same as a few years ago. What can employers do to help staunch the loyalty loss? One tool that they may be overlooking is their employee benefits program. The study found a strong correlation between benefits satisfaction, job satisfaction and employee loyalty.
What Employers Can Do
A strategically designed benefits program may help drive employee loyalty. Employees who are very satisfied with their benefits program have stronger feelings of employer loyalty. According to the MetLife study, approximately 50% of small business employees who are not satisfied with their benefits hope to be working for a different employer in 2011. This is sharply contrasted to this additional finding -- 72%, of small business employees who are very satisfied with their benefits feel a strong sense of loyalty to their employer.
Despite the tie between employees’ benefits satisfaction and loyalty to their employers, many small businesses have not modified their benefits offerings over the past few years. Voluntary benefits can be an attractive strategy – for both the employer and their employees. The MetLife study shows that approximately half of employees find it important to have benefits like dental, life insurance and disability insurance available to them through their workplace, even if they have to pay all of the cost themselves.
Another way for employers to strengthen their benefits package in a cost-effective manner is to offer programs that contribute to employees’ financial wellness as well as their physical health. The study found that 75% of employees who admitted their productivity was impacted by personal monetary issues would be interested in learning how to address issues that cause financial stress. However, 77% of small business employers do not plan to offer financial retirement planning seminars within the next 18 months. Workplace financial wellness programs can be particularly helpful to Baby Boomers in addressing their challenges in planning a secure retirement. Only 16% of this demographic who work for small businesses said that they are on track to achieve or have already achieved enough retirement savings and 62% say that they are very concerned about outliving their retirement savings.
Of course, to have an effective benefits program one also needs effective benefits communications. According to the study, a mere 27% of small business employees consider the benefits communications at their workplace to be very effective. If employees do not know about the benefits that are offered to them through the workplace, they can not take advantage of them and appreciate them. To maximize efforts to improve employees’ sense of loyalty to their employer it is important to both have a strategically designed benefits program and provide effective education and communication so employees understand the relevance to their lives.
Dr. Ronald Leopold is vice president and national medical director of U.S. Business for MetLife. For more small business-related findings from MetLife’s 9th Annual Employee Benefits Trends Study download Small Business Benefits: Address Growing Flight Risk with Benefits-Based Strategies available at www.metlife.com/sbtrends .
By: Dr. Ronald S. Leopold, MetLife
The long-term outlook for American small businesses remains mixed, with promising signs of recovery evident earlier in the year now overshadowed by less favorable reports. But whatever the forecast, small businesses find themselves confronting a clear and present challenge - diminishing employee loyalty Employees of small businesses are not as loyal as they used to be several years ago and say they're considering a change in employers. According to MetLife’s 9th Annual Study of Employee Benefits Trends, the percentage of employees working for small employers (those with fewer than 500 workers) who say they have strong sense of loyalty to their employer has dropped to 44%, down from 62% in 2008. In fact, 34% of small business employees would like to work for a different employer.
In contrast, small business employers’ perceptions of employee loyalty have not changed much over the past few years. MetLife’s study found that 54% of small businesses employers currently believe that their employees have a strong sense of loyalty to them, nearly the same as a few years ago. What can employers do to help staunch the loyalty loss? One tool that they may be overlooking is their employee benefits program. The study found a strong correlation between benefits satisfaction, job satisfaction and employee loyalty.
What Employers Can Do
A strategically designed benefits program may help drive employee loyalty. Employees who are very satisfied with their benefits program have stronger feelings of employer loyalty. According to the MetLife study, approximately 50% of small business employees who are not satisfied with their benefits hope to be working for a different employer in 2011. This is sharply contrasted to this additional finding -- 72%, of small business employees who are very satisfied with their benefits feel a strong sense of loyalty to their employer.
Despite the tie between employees’ benefits satisfaction and loyalty to their employers, many small businesses have not modified their benefits offerings over the past few years. Voluntary benefits can be an attractive strategy – for both the employer and their employees. The MetLife study shows that approximately half of employees find it important to have benefits like dental, life insurance and disability insurance available to them through their workplace, even if they have to pay all of the cost themselves.
Another way for employers to strengthen their benefits package in a cost-effective manner is to offer programs that contribute to employees’ financial wellness as well as their physical health. The study found that 75% of employees who admitted their productivity was impacted by personal monetary issues would be interested in learning how to address issues that cause financial stress. However, 77% of small business employers do not plan to offer financial retirement planning seminars within the next 18 months. Workplace financial wellness programs can be particularly helpful to Baby Boomers in addressing their challenges in planning a secure retirement. Only 16% of this demographic who work for small businesses said that they are on track to achieve or have already achieved enough retirement savings and 62% say that they are very concerned about outliving their retirement savings.
Of course, to have an effective benefits program one also needs effective benefits communications. According to the study, a mere 27% of small business employees consider the benefits communications at their workplace to be very effective. If employees do not know about the benefits that are offered to them through the workplace, they can not take advantage of them and appreciate them. To maximize efforts to improve employees’ sense of loyalty to their employer it is important to both have a strategically designed benefits program and provide effective education and communication so employees understand the relevance to their lives.
Dr. Ronald Leopold is vice president and national medical director of U.S. Business for MetLife. For more small business-related findings from MetLife’s 9th Annual Employee Benefits Trends Study download Small Business Benefits: Address Growing Flight Risk with Benefits-Based Strategies available at www.metlife.com/sbtrends .
