Employers Risk Facing Turnover Without Comprehensive Benefits Offerings

If employers fail to offer a holistic suite of benefits that is target toward their particular plan demographics, and fail to effectively communicate these benefits, they risk facing retention issues down the line, according to a new survey conducted by Nuveen, a TIAA company. 

After surveying 1,500 full-time U.S. workers, Nuveen, a TIAA company, found that 70% of respondents said they would be willing to switch jobs for better benefits, with younger workers expressing the greatest willingness to move on. 

“Rather than viewing benefit as a cost, organizations can seize a competitive advantage by treating them as a strategic investment,” stated Nuveen in its Benefits 2.0 report.  

Nuveen argued in its report that it is in employers’ best interest to create more inclusive benefits that serve their workforce, as less adequate benefits packages are linked with perceptions of a less accommodating workplace. 

One-size-fits-all benefits packages are ineffective, according to Nuveen, as benefits priorities vary immensely across demographic groups. The prevalence of one-size-fits-all packages reveals that companies lack significant insight and data into what their workers truly want from company benefits. 

Need for Holistic Benefits 

Nuveen pointed out that workers are often vocal about competitive wages but may be “quietly disgruntled” about the portion of their compensation made up of benefits.  

Younger workers, for example, tend to show greater demand for education benefits, while older workers show a greater desire for more comprehensive retirement benefits and parental leave.  

Gen Z, in particular, is attracted to education and training benefits, with 66% saying they would consider switching jobs for better access to these perks.  

“An organization looking to build a young workforce should look to capitalize on these benefits, especially in an age of ‘automation anxiety’ in which many roles and functions are disrupted by artificial intelligence,” the report stated. 

Ethnic and racial minority groups similarly ranked education benefits as a top priority. In fact, those respondents were 70% more likely than white workers to rank education perks as a top priority.  

Gen Z workers also placed more weight on paid time off than their older peers, but they expressed the least satisfaction with their opportunities for taking advantage of this benefit. For example, Gen Z respondents were the least likely to say they could use all their vacation days. In addition, they were more likely to feel that their company culture does not actively encourage taking time off.  

Meanwhile, older workers place greater emphasis on retirement benefits, as 87% of this cohort ranked retirement among their top three most important benefits. However, only 32% of them said they have access to automatic retirement contributions from their employers.  

“While new employees were defaulted into the TDF/ QDIA, more likely to have age-appropriate risk exposure, the more tenured/ older employees were left behind, and not given a chance to take advantage of auto features, because plan sponsors assume they’d be resistant to change,” said Brendan McCarthy, head of retirement investing at Nuveen, in an email response. “Very few participants have the necessary expertise when it comes to retirement investing. That’s why the right plan design, and specifically auto features are so important.”

McCarthy said there is value in conducting a reenrollment to enable inclusion of all workers.

For parents, family planning and child care benefits are a priority, with 42% saying these offerings have allowed them or their partner to remain at their current jobs. However, Nuveen found that only six in 10 workers have access to such benefits.  

Paid maternity and paternity leave have become significantly more common than childcare assistance, which Nuveen interpreted as meaning that offerings for parents with older children are lacking.  

Lack of Communication 

A lack of communication about benefits ultimately results in a lack of utilization, Nuveen found. Two-thirds of workers said there is room for improvement, reporting that organizations do not do enough to communicate and explain how their benefits work. In particular, companies are failing to ensure their workers know about, and can fully access, their benefits, with minority groups most likely to report difficulty in taking advantage of them.  

Nuveen suggested that in-person discussions, seminars, mailers and digital outreach can help ensure that benefit details reach all workers and their families through the most receptive channels.  

Benefits platforms should also be accessible and user-friendly to encourage workers to actually take advantage of the available benefits.  

“The average number of places that a worker needs to go to access benefits is … at least three portals. That is a lot,” stated Caroline McGoldrick, health solutions innovation and integrated solutions leader at Aon, in the report. “It’s not just providing the benefit as much as it is actually making sure that that benefit is able to be accessed by your entire population.” 

Nuveen also recommended that employers ask their workers to provide feedback on their benefits’ offerings, as this is the “most efficient and effective way” to learn if an employer’s offerings are meeting participants’ needs. Employers tend to benchmark benefits against those offered by competitors rather than looking internally at whether their benefits are “meeting the real world needs” of their staff, Nuveen found. 

While surveys, focus groups and open discussion forums tend to be underutilized, Nuveen argued that these are effective strategies for employers to use to get feedback about benefits offerings.  

The Benefits 2.0 survey was fielded in October and November of 2023.