Small Business Benefits: Cost-Effective Strategies for Maximizing ROI is a supplement to MetLife’s 7th annual Study of Employee Benefits Trends (see Study Finds Employer-Worker Disconnect on Education/Advice ).
The supplement is the result of surveying nearly 1,000 benefits decisionmakers at companies with fewer than 500 employees as well as hundreds of the employees who work for these smaller businesses.
According to a press release, approximately seven in ten (66%) workers at companies with fewer than 500 employees reported that benefits such as life, disability and dental insurance are significant drivers of their feelings of loyalty towards their employer, behind salary and wages (85%) and health benefits (71%).
While small businesses are on par with larger companies when it comes to offering medical insurance (95% and 96%, respectively), the divide widens for other products. For example, only 65% of small businesses with fewer than 500 employees offer dental insurance compared to 93% of those employers with 500 or more employees.
The addition of life, dental, disability and other insurance benefits can be important factors when considering overall job satisfaction among employees, MetLife said.
The study found that 73% of employees who were satisfied with their benefits were satisfied with their job, while just 22% who were not satisfied with their benefits were satisfied with their job – an indicator that attention to benefits satisfaction could have a positive impact on employee loyalty and retention.
For employers with fewer than 500 employees, productivity increased as a top benefits objective from 33% in 2007 to 43% in November 2008.
However, Small Business Benefits: Cost-Effective Strategies for Maximizing RO” reveals that smaller employers may not be leveraging benefits as effectively as they could be and offers several strategies that small businesses can implement as they seek to drive productivity and retention.
According to MetLife's study, one significant - but often missed - opportunity for small businesses to maximize their benefits programs is to increase employees' options through voluntary benefits. The study found that only about one-third (31%) of employers with fewer than 500 employees see voluntary benefits as a cost-effective way to enhance the attractiveness of an organization's overall benefits offering.
However, when it comes to voluntary benefits, employees said they like the convenience and time savings of buying at the workplace, the ease of payroll deductions, and group rates. Approximately nine in ten small business employees are interested in their employer providing a greater array of employee benefits that they can choose to pay for on their own.
Similarly, MetLife said, small businesses may have the opportunity to actually reduce benefits costs through the use of workplace wellness programs. Small businesses say they are spending 61% of their total benefits dollars on medical insurance. MetLife found employee interest in health and wellness is high; 73% of employees who participate in wellness programs said the top reason to participate is "I want good health."
MetLife's study suggests another missed opportunity for small business employers may be benefits education. Only about one-third of workers at businesses with fewer than 500 employees reported that their company's benefit communications effectively educate them on their benefits options so they can select those that best meet their needs.
Forty-three percent of employees at small businesses have taken a greater interest in understanding the employee benefits they receive through their employer because of recent economic events.
The supplement is available at http://whymetlife.com/sbtrends2009 .
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