Financial Wellness Programs Boost Engagement and Loyalty

84% of employees describe financial wellness programs (e.g., planning, education, workshops, tools) as benefit offerings they want or need.

While employers and employees are embracing greater use of technology and automation with open arms, new data from MetLife reveals they are also worried about losing a sense of human connection within the workplace.

According to new survey data shared by the firm, more than half (56%) of employers have a positive view of automation technologies that can help companies do human jobs, compared with 20% who are pessimistic. This is according to MetLife’s 16th Annual U.S. Employee Benefit Trends Study (EBTS).

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“On the employee side, nearly half (49%) are optimistic, while only a quarter (24%) are pessimistic,” MetLife reports. “This breaks down along gender and generational lines: men (54%) are more optimistic than women (43%), and Millennials (63%) are more optimistic than Gen Xers (47%) or Baby Boomers (38%).”

Still, both employers and their workers have trouble reconciling their optimism around automation with their desire for human connection. About half of both groups (46% of employees, and 51% of employers) worry the workplace is becoming less human.

“While automation is the next workplace frontier, the biggest fear is that work is losing its human touch, likely due to unmet needs for personalization and recognition,” says Todd Katz, executive vice president, Group Benefits at MetLife. “Employers who are able to balance their—and their employees’—desire for innovation through automation, while creating great work experiences, will be tomorrow’s talent leaders.”

The research suggests employers can win trust and loyalty from their employee base during this period of transition by offering relevant and timely professional development, as well as flexible work schedules and responsive employee benefits. Many stats are shared to back up this point, for example that 87% of workers whose employer enables them to flexibly manage time in/outside of work are more loyal and satisfied. Nearly three quarters (72%) report that having the option to work remotely is important to their work/life balance.

Other findings show the percentage of workers interested in contract or freelance work, as opposed to full-time salaried jobs, has increased—partly because of the “make your own hours” lifestyle allowed.

“More than half (57%) of employees say they’re interested in freelance work, compared with 51% last year,” MetLife reports. “And it’s not just interest; 24% of employees say they plan to leave their full-time jobs for freelance work in the next five years. Choice and flexibility strengthen loyalty.”

Trending upward from 2017, six in 10 employees—and 69% of Millennials—now report that they’re willing to pay more to have benefits choices that meet their needs, up from 52%. One of their biggest needs is “financial wellness.” Fully 84% of employees describe financial wellness programs (e.g., planning, education, workshops, tools) as offerings they want or need. Yet only 18% of employers currently offer them, according to MetLife.

Among employees who feel most “connected” or “empowered” at work, more than 90% expect to still be working for their organization in 12 months, compared with 81% of all workers. They are also at least 17 percentage points more likely to say they trust their company’s leadership and 11 percentage points more likely to report that employee benefits help them worry less about unexpected health and financial issues.

“With unemployment at a record low and top talent in high demand, employers are looking for new ways to attract and retain workers,” Katz concludes. “For employees to feel connected and loyal in this era of automation, a positive employee experience is essential. Employees want a say in how, when and where they work—and they’re prepared to reward the organizations that deliver with hard work, performance and loyalty.”

SURVEY SAYS: Information From Peer Benchmarking

Many plan providers or other entities can provide peer benchmarking reports—so plan sponsors can compare their plans to those of similar type, size or in the same industry.

Last week, I asked NewsDash readers, “Does your firm/adviser perform peer benchmarking to see how your plan stacks up to others, and what would you like to know about your peer plan sponsors?”

 

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Nearly three-fourths (73.1%) of responding readers work in a plan sponsor role, 19.2% are advisers/consultants, and 7.7% are TPAs/recordkeepers/investment managers.

 

Among all respondents, 73.1% indicated their company or plan adviser performs peer benchmarking to see how their retirement plan stacks up to others, while 15.4% said they do not and 11.5% don’t know.

 

Asked what information they would like to know about their peer plans, plan design features, fees, participation rates and average deferral rates were common answers. But there were some not so common answers, such as, “I question whether the peer results can be skewed to achieve desired results.”

Responses included:

  • fees paid, asset allocation, total return
  • How are Plan Sponsor’s implementing a sound risk management process?
  • Fees, match structures, plans and services offered. Also what services are utilized?
  • plan features offered by others in our industry (law firms)
  • Average participation, employer matching provisions
  • How does our plan offerings & fees compare to other small group plans?
  • cost, participation rates, common features and are they happy with their current providers.
  • Age breakdown of participants, account balances, and contribution requirements under the plan
  • I’d love to know if plan sponsors are engaging their employees in the 401(k) Plan, or just letting them “coast.” I think semi-annual or annual ee meetings are critical for keeping employees interested in retirement.
  • Average balance, average deferral rate, % of participation.
  • Company match rate, participation rates, average salary, average account balance, etc.
  • Do the company have a Pension Plan as well as the 401(k)
  •  (1) More info on their employees’ demographics. (2) Do they have a DB plan — frozen or the status as it applies to most DC participants. (3) Bonus plans outside of DC plan.
  • For clients with smaller asset balances (<$5M), do other plan advisors provide fee benchmarking?
  • The comparison of our plans performance is always favorable. I question whether the peer results can be skewed to achieve desired results. What I am questioning is could peer results be sorted in such a way that they make our plan results look better than the benchmark? I say to myself, “No that can’t be”. Then I watch the national news and say, “Why not?”
  • Our primary use of benchmarking statistics is to show our clients how to retain and attract top talent by, at the very least, matching the features that are most common in their industry and plan size, and preferably, exceeding those offerings. The benchmark reports are often very eye-opening for plan sponsors!
  • Usually the hardest data to acquire is outside of the US and developed markets. Finding out what your competitor’s retirement and medical plan designs are in underdeveloped markets is hard to acquire, and highly valued.

 

Among readers who left comments, many pointed out the benefits of peer benchmarking—to make sure the plan is competitive, to potentially reduce plan costs and to get new ideas for their plans, as well as others. A couple of respondents noted that beer benchmarking does not show plan sponsors everything they need to know. Editor’s Choice goes to the reader who said: “As a retention tool the plan has to be comparable to my competition, relatively simple to administer and yet still fit in my budget. I feel benchmarking should help me determine each of these items.”

 

Thanks to all who participated in our survey!

 

Verbatim

Helps a Plan Sponsor defend their documented decisions are compliant with the written Investment Policy Statement.

Peer benchmarking helps us to be competitive with what we offer

It can help in making the case for enhancements to the Plan

As a retention tool the plan has to be comparable to my competition, relatively simple to administer and yet still fit in my budget. I feel benchmarking should help me determine each of these items.

Helps us to keep up on trends and understand what options are out there that we might not otherwise be aware of.

You can find out if others are doing something you’re not, and if it would be beneficial for your participants.

Just nice to see confirmation that we rarely see a study where we have lower participation, wage deferral or participant balances. Much be doing something right.

You never really know the whole story.

We are curious but there are so many other factors…typically benchmarking is only one of many factors.

It helps plan fiduciaries fulfill their ERISA fiduciary obligations to ensure plan fees are reasonable. It also seems to have helped reduce plan costs overall.

It goes set a very good achievement bar to shoot for.

Keeps you on your toes and in line with what participants want and expect.

Peer benchmarking does provide a benefit, as most senior leaders will support a proposal that will make their retirement plans more competitive. The problem is that innovation usually suffers with this model, so we try to balance competitiveness with innovation to find a mix our employees value.

 

 

NOTE: Responses reflect the opinions of individual readers and not necessarily the stance of Strategic Insight or its affiliates.

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