Ask any benefits manager why their organization offers benefits to their workers — or why they offer a 401(k) — and my experience suggests that the reliably consistent answer is “to attract and retain the best workers.”
Indeed, as the 2013 Health and Voluntary Workplace Benefits Survey (WBS)[1. The 2013 Health and Voluntary Workplace Benefits Survey (WBS) was conducted by EBRI and Greenwald & Associates. Additional information can be found online here.] bears out, the benefits package that an employer offers prospective employees is an important factor in their decision to accept or reject a job. In fact, one-third of employees say the benefits package is extremely important, and another 45% say it is very important.
Moreover, one-quarter of employees report they have accepted, quit or changed jobs because of the benefits — other than salary or wage level — that an employer offered or failed to offer.[2. “Views on the Value of Voluntary Workplace Benefits: Findings from the 2013 Health and Voluntary Workplace Benefits Survey,” can be found in the November 2013 EBRI Notes article online here.]
However, the WBS also found that many workers are not especially satisfied with the benefits package offered by their employer: 31% are only somewhat satisfied, and one-quarter are either not too satisfied (12%) or not at all satisfied (14%).
It is, of course, entirely possible that these workers are genuinely dissatisfied with the options provided by their employers. On the other hand, the WBS found that a substantial minority of employees may be confused about the benefits their employer offers and who pays for them — a level of ignorance that belies the time and expense often undertaken by employers in making those offerings available.
Employers increasingly look not only to attracting and retaining a qualified workforce, but (at an appropriate time and place), to helping an aging workforce migrate into retirement — a process that can be assisted by a well-crafted benefit program. And it’s not surprising that workers see value in offering additional voluntary benefits to those nearing retirement age.
In fact, the WBS finds that large majorities of workers say they think the following products and services would be extremely or very valuable to workers nearing retirement age:
• An annuity product that makes guaranteed monthly lifetime payments (83%).
• Life insurance that pays benefits to the surviving spouse, helping to replace income from Social Security or other sources that is discontinued when a worker dies (77%).
• Retirement planning that includes assistance with deciding when to retire, when to claim Social Security benefits, what Medicare option to choose and how to set up a stream of income for retirement (76%).
• Long-term care insurance (71%).
During my working life, there have been times when I didn’t care much about certain aspects of the benefits package. As a young, single person, I focused primarily on salary and vacation — cared less about health care insurance than I should have, while retirement benefits, even for someone who worked with them every day, were distant prospects. As my family grew, my priorities (and those that I assigned to various benefits) shifted. It was still presented as a package, of course, but the various components mattered more or less depending on my personal situation.
Ultimately, employers looking to keep the best workers committed and engaged — and the advisors trying to help them do so — know that benefits, like workers, have a life cycle, and that programs designed to keep the best workers are not only well-designed for those various life stages, but (as the WBS reinforces) are well-communicated and reinforced throughout a worker’s career.
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