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With all the targeted marketing out there, and the customer satisfaction surveys and opinion polls that companies seem to offer at every turn, you might think that employers could get a handle on which employee benefits are most popular among their workers. You might think that — but you’d be wrong.
Employers and employees have divergent views on the appeal of a range of benefits, and the differences are wider now than they have been in years, according to several recently released surveys.
Some 86 per cent of the 262 employers in a study by Watson Wyatt, the consulting firm, said they believed that their organisation was treating employees well, and more than half expected to do a better job of treating employees well in the future. But only 55 per cent of the 1,100 employees in the study believed they were well treated, and just 24 per cent thought they would be treated better in the future.
Employers also appeared to have little sense of why high-performing employees might leave the organisation: not one employer said health care benefits would play a role, but 22 per cent of the top performers said that those benefits would be important.
“If I was surprised by anything, it was the degree of the disconnection and the fact that it ran across the spectrum from the highest-level summary statement of ‘We think we treat our employees well’ on down to the specifics,” said Laura Sejen, Watson Wyatt’s practice director in charge of strategic rewards. “Think of it like tectonic plates. We’re on a crash course and something’s going to have to give.”
In another study measuring employees’ commitment and motivation on the job, employees were less satisfied with every aspect of compensation than they had been in previous years, from overall pay to the pay system itself. This was true even though raises have consistently ranged from 3.7 per cent to 4 per cent for the last several years, according to Jim Kochanski, a senior vice president at Sibson Consulting, which undertook the study.
“There’s a huge drop in satisfaction with their pay increases even if their pay increases were the same as they’ve been,” Kochanski said. The differences are not all that surprising if you take the long view. For the last decade or more, many employers have shown a willingness to scale back their work force if it makes strategic sense.
At the same time, as they have faced steep increases in the cost of health care, many have responded by scaling back what they provide or by asking employees to pay for more themselves. And accounting rule changes have made it more costly to offer options to lots of employees.
Many employers are now putting more emphasis on other benefits, like flex-time options and enhanced career development, that are often enormously popular with certain segments of the work force, like younger workers with children.
But for large numbers of employees, who have perhaps lived through layoffs and sharp cuts in benefits, those kinds of goodies are less attractive than cash. If the labour market had more slack, the disconnect between employer and employee might not affect much beyond employee morale. But in a tight market for highly skilled workers, the effect can be very different.
For employers wanting to head off major defections, the advice often given in Can This Marriage Be Saved? applies: communication is vital. Surveys can reveal a wealth of information about what benefits workers want most. So can solid analyses of work force demographics: younger employers are likely to care about benefits like child care subsidies and generous leave policies, while older workers might focus almost solely on health and retirement benefits.
Scana, a gas and electric utility based in Columbia, South Carolina, is one company that has studied the demographics of its work force. Roughly half of its employees will be eligible to retire in the next five to 10 years, said Chris McSwain, director of compensation and benefits, so he plans to use benefits to attract and retain workers and to make the transition as smooth as possible.
Last November, Scana officials began meeting with focus groups of employees of different ages — one group in their 20s, one in their 40s, and so on — and asked about their preferences for different supplemental benefits, like phased-in retirement and training seminars. After studying the results, the company plans to offer a package of add-on benefits; employees can choose among them to supplement those they already receive.
“We know we’re going to have some turnover, and we know the needs of people joining the company will be different from the people leaving,” McSwain said. “We want to adjust to balance the needs of those with us along with those of the people joining us in the next five years.”
Turnover is less of an issue at the NewYork-Presbyterian Healthcare System, but the organisation faces a challenge from the wealth of job opportunities its employees have in the New York City area. So G. Thomas Ferguson, senior vice-president and chief human resources officer, commissions regular employee satisfaction surveys to take their pulse on a range of subjects. “Some of our employees can change jobs and not even change their ‘going to work and coming home’ pattern,” Ferguson said.
The first survey, undertaken shortly after Ferguson’s arrival at NewYork-Presbyterian, in 2001, found that 59 per cent of the organisation’s employees were satisfied with their benefits. Annual employee turnover, at 13 to 14 per cent, was also close to the national average for health care organisations.
So, in the last several years, NewYork-Presbyterian has stepped up communication with employees about available benefits. It has also pushed for price concessions from vendors to contain the costs of the benefits it offers, in order to keep employee contributions from increasing too much.
NewYork-Presbyterian also allows employees to buy what amount to supplements to their benefits, like added life insurance and legal services, at discounts. Ferguson estimated that between 30 per cent and 50 per cent of employees bought some kind of supplemental benefit.
In a July 2006 survey of employees, satisfaction with benefits stood at 71 per cent, Ferguson said; he estimated that turnover now runs about 10 per cent.
“We want to be able to hire and keep the best people and have them be satisfied,” he said. “It’s good human relations. It’s also good business.”