Benefit Satisfaction Down 9% in 2003

According to the MetLife 2003 Employee Benefits Trend Study, less than one-third (32%) of workers are satisfied with their employer benefits – down 9% from one year ago. Among men, benefits satisfaction dropped to 29%, versus 41% last year and, among women, it dropped to 34% in 2003 from 41% in 2002. One reason for the trend: employers’ moves to shift benefits’ costs onto the workforce. Job satisfaction has also fallen somewhat, with 44% of employees expressing satisfaction in 2003 compared with 48% in 2002.

Although few employees work at companies that continue to absorb the full cost of employee benefits, most employers subsidize some portion of the expense. Three out of four workers who obtain traditional benefits from their employer receive subsidized medical (77%), dental (71%) and vision care (70%) insurance, as well as a 401(k) plan (71%). More than half of the employees who purchase non-traditional benefits such as long-term care insurance (54%) and dependent life (54%) through the workplace also receive company-paid subsidies, as do more than one-third of employees who purchase estate planning (41%) and legal services (37%) at work.

Employees’ views on their benefit packages should be a substantial employer concern, according to the survey. For example, among employees who are highly satisfied with their benefits, roughly two-thirds say that their benefits are an important reason they stay with their current employer (69%), are satisfied with their job (64%), and feel strong loyalty toward their employer (64%).

Management and workers don’t see eye to eye on the issue either. While more than two in five (41%) employers believe that workers are satisfied with their benefits, fewer than one-third (32%) of employees agree. Similarly, 54% of companies believe that job satisfaction is high at their company, yet only 44% of employees concur.

The Importance of Employee Retention

While more than half (54%) of the employers surveyed rank “controlling health and welfare benefits costs” as their single most important benefits objective, “employee retention” (49%) and “increasing employee job satisfaction” (47%) are right on its heels. For employers with 10,000 or more employees, employee retention is more important than controlling health and welfare benefit costs.

Specifically, helping employees balance their work and personal lives (e.g., telecommuting, flexible work arrangements, job sharing, day care services) tops the list of strategies that employers say is most important (43%) in meeting their benefits objectives. Other key approaches include providing better decision support tools for employee benefits (29%), providing retirement-planning services (25%) and offering a wider choices of voluntary (i.e., employee-paid) benefits (22%).

When it comes to the value of voluntary benefits, both sides are apparently on the same page. Nearly one-third (28%) of employees want their company to provide a wider array of voluntary benefits, and 20% of employers concur. Employers see voluntary benefits as a cost-effective way to meet the diverse needs of their workforce (42%) and enhance the attractiveness of their company’s overall benefits offerings (40%). Reasons for the interest in voluntary benefits include payroll deduction (55%), convenience (51%), and better rates (46%).

In addition to voluntary benefits, employers are increasingly looking to the Internet and their company’s intranet to reduce costs and better manage their benefit plans. This year, 51% of employers used the Web for benefits enrollment, up from 44% last year and 15% in 2001. More than one-third of employers (38%) turn to online channels to manage employee benefits information and provide benefits services.

Among employers with 50 or more employees, the number of employers offering benefits portals to their employees is also on the rise (60% this year, up from 44% last year and 30% in 2001). Companies are also increasing the range of benefits activities they manage online. More than two-thirds (69%) use the Internet/intranet for benefits recordkeeping related to changes in status (name, address, beneficiary, etc.) and more than two out of five provide online benefits plan design information (49%), eligibility verification (48%), claims status/explanation of benefits (45%) and benefits billing/remittance (43%).

The MetLife Employee Benefits Trend Study was conducted during the third quarter of 2003 and consisted of two distinct surveys. The employee survey polled 728 full-time employees, age 21 and older, at companies with at least two employees. A total of 1,548 HR/Benefits executives from companies with at least two employees participated in the employer survey. Both surveys were fielded during September and conducted by NFO World Group via the Web.