What’s on the mind of mid-market benefits managers? The 2016 Employee Benefits survey from SHRM reveals some interesting trends and insights that illuminate the history and perhaps the future of benefits for smaller and mid-sized companies.
The top three benefits noted as very important to job satisfaction are:
1. paid time off
2. health care
3. work flexibility
Retirement planning is not top-of-mind — maybe because the survey was not conducted by a DC provider.
Financial wellness seems to be on the wane, with Rand estimating that large companies lose $.50 on every $1.00 of spend. But SHRM notes:
Although it may seem like organizations are decreasing wellness benefits overall, it is possible that they are being more strategic. Programs with low employee participation or those proving to be relatively ineffective may be dropped or replaced with other programs.
Good advice for the budding financial wellness industry.
On the retirement front, 90% of companies that offer a retirement plan, which is 94% overall, offer a DC plan. Matches are provided by 74% of companies, while 50% offer an HSA in 2016, up from 34% in 2012; Roth options have risen to 51% of companies in 2016 from just 34% four years ago. Of note, since 2012 a staggering one-third of companies have dropped their DC loan option. The percentage of firms offering plan loans now stands at 44%. Access to advice has remained stable, as has auto-enrollment (38%) and auto-escalation (19%).
Employee benefits take up 31.3% of compensation, so companies are watching them carefully. Of the 7% that decreased benefits in 2016, 24% decreased retirement benefits — second only to health care. One-third of companies are increasing benefits, and two-thirds indicated that it’s difficult to fill full time jobs.
On the rise over the past 20 years: telecommuting, which contributes to work life flexibility, with 60% now offering the option — up from just 20% two decades ago.
Takeaways:
- Retirement is not as important as those in the DC industry think.
- Those touting financial wellness should be prepared to show a tangible ROI.
- It might be safer than ever to drop plan loans.
Here's one more: Don’t rely on DC industry surveys to get inside the minds of the small and mid-market benefits managers who are the gatekeepers to their companies’ retirement plans.
Opinions expressed are those of the author, and do not necessarily reflect the views of NAPA or its members.
