Research Studies

Getting Benefit Costs Under Control Now Tops Employee Retention

No author cited
MetLife, April 2010

Available online

The findings from the 8th Annual Study of Employee Benefits Trends point to the apparent resilience of workplace benefits in this recession, and reveal that, as employers and employees continue to deal with the effects of the economic downturn, they are focused on the long term. Most employers have not reneged on their benefits commitments.

However, this year's Study also reveals a benefits landscape that has been altered as a result of the recession experience. Employers must seek ways to maintain a competitive advantage for their benefits programs in the context of greater focus on employee productivity and cost control.

Despite these challenges, employers and employees appear to be working toward a common goal: Securing financial health & wellness. Through employer-sponsored wellness programs, automatic enrollment features for retirement savings plans, voluntary benefits and protection products, employers are taking steps to help their employees act on their best intentions.

This year's Study provides new insights that can help employers identify opportunities to realize the full potential of their benefits programs and to maximize the return on their benefits investment.

Key Highlights from the Study on what employers are saying include:

1. The importance of controlling costs has increased and is now their most important benefits objective.
2. The focus on employee retention is somewhat reduced, but is still the second most important objective despite the weak job market.
3. Employee productivity remains the third most important objective, but the steady increase in importance since 2007 continues.
4. Programs that help foster employee health & wellness and financial security are
   effective in improving employee productivity.
5. Active employer engagement in their qualified retirement plans is increasing and is necessary to help employees realize adequate income in retirement. There is emerging interest in automatic enrollment, automatic escalation and default annuitization in larger companies to help employees act on their intentions to save.
6. They have not increased their focus on providing financial advice, guidance and
   retirement education, despite employee interest, perhaps reflecting the economic
   pressures of the last year.
7. Voluntary benefits can cost-effectively enhance a benefits program, yet few are increasing the number offered or prioritizing this as a strategy.