A recent AICPA survey found that employees – by a whopping 4-to-1 margin – would choose a job with benefits over an identical job that offered 30% more salary but no benefits. We asked NAPA Net readers about their frame of reference.
Asked how they felt about those participants with whom they came in contact, roughly a quarter (24%) said they wouldn’t go for that trade, though just as many said that “most would,” and 1 in 10 weren’t sure. On the other hand, 41% of this week’s respondents said it would depend on the person/beneficiary. “I think the bigger number after the dollar sign would obscure the lack of benefits when choosing a job (but they’d realize the flaw afterwards),” noted one.
Of course, depending on the benefits (and salary), benefit costs add up to about 30% of pay – and so, financially the tradeoff might be seen as “equal.” Interestingly though, that survey found that employed adults appear to overestimate the value of their benefits – assuming that their benefits represent 40% of their total compensation package, though the Bureau of Labor Statistics, puts that figure at about 31.7%.
But, do the workers NAPA Net readers come in contact with know the value of their benefits? More than half (55%) of this week’s respondents said they didn’t, and just 7% said they did. “Employees have no idea of the true cost of their group benefits,” noted one reader. On the other hand, 28% said that it depended on the person/benefit.
And while it’s long been touted that benefits are designed to attract and retain qualified workers, we asked readers if they thought that was still the case. A solid majority – 66% – said they did, and another 17% were in the “yes, for the very most part” camp. Just over 1 in 10 said it depended on the person/benefit, and the rest split between “no” and “not sure.”
As for what (if anything) their plan sponsor clients had done to help workers better understand/appreciate the value of their benefits, readers responded (more than one response was permitted):
72% - Educational meetings
62% - Communicate during enrollment meetings
48% - Produce benefits statements
24% - Expanded benefits
21% - Payroll stuffers
7% - Nothing in particular
And then, asked if they knew the value of their benefits, readers responded:
76% - Yes!
14% - I think I do, but…
10% - Now that you mention it…
Asked if benefits had ever played a role in their decision to change or stay with an employer, readers noted:
38% - No
31% - No, but it did play a factor in the ultimate decision
24% - Yes
7% - Not yet
We got a number of reader comments – as we nearly always do. Here’s a sampling:
“I wish they'd get benefits out of the employer realm,” stated on reader. “Didn’t benefits come about because of wage controls? You history wonks out there probably know better than I. ABC Company should focus on making widgets, not on pensions and health care. Individuals should save for retirement and get their own health insurance. I’m going to stop here because otherwise I’d get very political and would get censored.”
“I find blue collar workers are less concerned about their benefits. They would prefer increases in pay. Office staff in any capacity prefer the benefits and will take less pay for outstanding benefits.”
Two things: 1) Total compensation statements are really useful. Employees have no idea how much employers pay for their health insurance and other benefits and they take it for granted. 2) Benefits people (myself included) need to do a better job with education.
“I don’t think anyone has successfully come up with a way to communicate the wide range of benefits simply.”
“Medical options at the individual level continue to expand so it may not become as big of an attraction from an employer provided level; salary may play the bigger role so you can bargain for what coverage matters the most.”
“My spouse works for the county, and gets an annual benefit statement... they throw everything plus your use of the kitchen sink in there! It’s become a bit of a joke, they’re not providing anything additional or paying more in taxes for you than any other employer would, but I guess they want you to see how much of an expense you are ; )”
Thanks to everyone who participated in our weekly NAPA Net reader poll!