Where I’m from, we have an expression to describe loyalty: “I know where my bread is buttered,” and according to a recent Metlife employment benefits study, there isn’t much butter going around.
MetLife Insurance conducted a study on employee satisfaction and how benefits distribution affects employee loyalty. The results confirm that while cost cutting measures have proved fiscally beneficial on the short term, employee retention is suffering on the long term.
In an economy where CEO salaries have exceeded pre-recession numbers and productivity is up twelve percent, employee benefits are being reduced and salaries are frozen.
These trends lead the average worker to ask, “What is going on?”
In order to survive the recession, cost cutting measures have become most companies’ number one priority, while employee satisfaction has taken a backseat. Turnover has increased so much that people are quitting their jobs at a higher rate than people who are being laid off. While companies believe that employee loyalty has remained the same despite the recession and its subsequent benefits costs and workload increases, employee loyalty has reached a three year low.
One of the ways larger companies are dealing with benefits cost increases is by cost-shifting, which is turning over the cost of benefits directly to the employee. Additionally, companies are focusing less on responding to ailments and more on preventative health care measures with the believe that if an employee simply works harder at taking care of themselves, then they won’t need most health care benefits, thereby cutting health benefits costs.
Cost cutting measures also include layoffs, salary freezes, retirement benefits reductions, and increased workloads and hours. Despite these negative setbacks for employees, they’re working longer and making due with less which correlates to a rise in stress at home and an imbalance in the delicate work/life equilibrium, which then affects employee health with stress related ailments. The vicious cycle continues and employees have had enough. 40% of respondents in the study said they worked harder, taking on extra loads, working less hours with less job security and 51% plan to look elsewhere. As benefits take the majority hold for why employees stay at their jobs long past their overall satisfaction expiration, companies will have to reevaluate profit distribution to maintain a strong and effective workforce.
MetLife makes an insightful suggestion to companies by making benefits packages customizable and flexible for each age group. The study shows that a Generation Y professional has different professional and personal priorities such as flex-time, telecommuting and basic health maintenance costs while a Baby Boomer is more concerned with more health and wellness coverage and covering the spread between the present and retirement.
Pushing employees with little salary and poor working environments until they lose it and quit will have a diminishing marginal utility on the long run. Americans will deal with tough situations, but they know things will get better and if employers continue cut employee benefits and ignore the real life consequences these cuts have on their employees, the long term business costs could be disastrous. Some repercussions include unionizing and strikes, if not reduced talent quality and produce poor products, which in turn, diminishes profits. The days where employees stay at their jobs for twenty, fifteen, and perhaps even five years are over for most American companies. If companies are not willing to share profits and ameliorate the quality of work life during the recession, professionals will start looking for other companies who are willing to pass the butter.