Employees Exerting Greater Control over Their Benefit Decisions and Influencing Employer Benefits Strategies
NEWARK, N.J., January 15, 2013 - Nearly four years after the financial crisis began, fewer employers and employees are reporting severe negative economic effects. However, both groups exhibit declining optimism about how they will be doing financially a year from now. According to Sharpening the Focus on Benefits Strategy, the first in a series of research briefs stemming from The Seventh Annual Study of Employee Benefits: Today & Beyond from The Prudential Insurance Company of America (Prudential), 14% of both employers and employees cite severe negative economic effects, down significantly from 2010 results of 27% for employers and 22% for employees. Conversely, employers who say their financial position will be better or improving in one year dropped from 70% in 2010 to 54% this year; employees report a drop from 44% to 38%.
“Prudential’s flagship study continues to be an essential source of trend data on the benefits marketplace. Our research data shows that despite the indicators of economic recovery, it is taking longer for American employers and employees to regain full confidence in the future,” notes Steve Pelletier, president of Prudential Group Insurance. “The good news, however, is that this view of the future doesn’t negatively impact benefits decisions. In fact, benefit strategies have been evolving into a main focus for businesses of all sizes.”
Employers report a 17% increase over 2010 results in making benefits strategies a main focus. With shifting ownership and cost of benefits to employees, employers’ top strategies are, in priority order:
- Expanding wellness, preventive, and work/life balance initiatives
- Improving the effectiveness of benefits communications
- Cost-sharing with employees
- Giving more financial responsibility to employees
- Increasing employee benefits education and financial advice
From their viewpoint, 79% of employees see their employers as a trustworthy source to help them grow and protect their money, second only to credit unions (81%.) And, the perceived value of employee benefits has been trending upward, from 43% in 2010 to 59% today. Fifty-one percent of employees believe they are being offered a wide array of benefits, up from 38% two years ago.
“We are seeing two positive trends pointing to the successful evolution of employee benefit strategies,” Pelletier continued. “Employers are well-positioned to shift ownership of benefits to employees. At the same time, employees are taking on more responsibility for the benefits selection process and are expressing greater confidence in the benefits they are selecting.”
Communications are key to employee satisfaction and strengthening employees’ trust and confidence in their employers. Employees have seen a steady trend in the effectiveness of their benefit communications, from 36% in 2011 to 42% today. At the same time, employers report increased satisfaction with their benefits, at 37% today, up from 27% a year ago.
“For the first time, we are seeing disagreement in the perception of benefits communication effectiveness between employers and employees,” said Jean Wiskowski, chief marketing officer, Prudential Group Insurance. “The research shows employers believe group meetings at work are the most successful form of communication and education. By contrast, employees told us they prefer multiple forms of outreach including email, traditional mail and online presentations. This indicates that employers may need to re-evaluate their benefits communication tools, to include video and rich media employees can review at their own pace.”
Employees report they are reading their benefit enrollment material in large numbers, 82% this year, up seven points from last year. Most agree they prefer benefits communications they can read on their own time.
Sharpening the Focus on Benefits Strategy is the first in a series of five research briefs that highlight the major findings from Prudential’s Seventh Annual Study of Employee Benefits: Today & Beyond. The research was conducted via the Internet during July 2012, and consisted of three distinct surveys of plan sponsors, plan participants, and broker/consultant audiences.
Prudential Group Insurance manufactures and distributes a full range of group life, long-term and short-term disability, and corporate and trust-owned life insurance in the U.S. to institutional clients primarily for use in connection with employee and membership benefits plans. The business also sells accidental death and dismemberment, and other ancillary coverages and provides plan administrative services in connection with its insurance coverages.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader, has operations in the United States, Asia, Europe, and Latin America. Prudential’s diverse and talented employees are committed to helping individual and institutional customers grow and protect their wealth through a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, and investment management. In the U.S., Prudential’s iconic Rock symbol has stood for strength, stability, expertise, and innovation for more than a century. For more information, please visit http://www.news.prudential.com/.
Group coverages issued by The Prudential Insurance Company of America, 751 Broad Street, Newark, NJ. Prudential, the Prudential logo, and the Rock symbol are service marks of Prudential Financial, Inc. and its related entities, registered in many jurisdictions worldwide.