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Employee Loyalty – A Huge ‘Benefit’

David P. Lind BenchmarkAccording to MetLife’s 10th Annual Study of Employee Benefits Trends report (released in March 2012), only 42 percent of employees indicated they felt a strong sense of loyalty toward their employer – a seven-year low. Interestingly within this same report, 59 percent of employers felt a strong sense of loyalty toward their employees…a seven-year high!

Another part of this study caught my attention, yet I’m not all that surprised.

About 61 percent of employees (generations included – Boomers, X, and Y) who were very satisfied with their benefits said they felt a strong sense of loyalty to their employer versus only 24 percent of employees who were very dissatisfied with their benefits. If offering strong benefits provides greater loyalty from employees is more causation (rather than a correlation), employers have hope on developing a long-lasting sense of loyalty to their employees.

Not a bad thing!

A few other interesting tidbits from this study include:

  • More than half of surveyed employees (58 percent) said that benefits were an important reason to stay with their employer, and this was highest among Generation Y (born 1981 – 1994) at 63 percent and with Generation X (born 1965 – 1980) who followed at 62 percent.
  • While 66 percent of employees said that health benefits were an important driver of their loyalty, only 57 percent of EMPLOYERS believed this to be the case.  Hmmm…
  • 59 percent of employees indicated that retirement benefits were “very important” when influencing loyalty to their employer, while only 42 percent of employers recognize this. Another Hmmm…
  • A large majority of employers see opportunities to leverage their benefits programs to engage their employees. Leveraging benefits can retain employees more effectively, increase employee productivity, and attract employees.

How loyal are your employees? If loyalty is high, maybe your benefits package is a bigger contributor than you might think. If it is low, there is hope, according to this study! Offering quality employee benefits can be very expensive, but it might be more costly to NOT offer such benefits.

Trust, but Verify

David P. Lind Benchmark“Fair and balanced.”

You hear this phrase from many different sources. It conjures up something within us that we all desire to have when making critical decisions. Understanding the pros and cons on any given issue is important to most of us. But do we really receive the “truth” or the “transparency” that will allow us to draw our own conclusions on the subject matter at hand? It really depends on the source of the information…so I believe.

The reason for this particular blog stems from a presentation that I recently gave at the “2012 Iowa Employment Conference” in Altoona. Much of my presentation focused on the health insurance trends in Iowa based on our annual studies. The trends by the way, are dismal at best, unsustainable at worst (another blog for later). When discussing potential solutions for employers, a few topics were breached such as consumer-driven health plans, wellness initiatives, and health reform measures. I mentioned that each topic will usually have many arguments (both pro and con), in addition to having both intended and unintended consequences. To know the subject matter well, I suggested to the audience to have a comfort level with their SOURCE of information (publications, media outlets, research organizations, etc.).

Much to my surprise, a hand was raised that followed with this question: “Which sources do YOU trust?” This question came out of the blue for me, but was asked in a thoughtful manner. I don’t quite remember my response that day, but since that presentation, I have had time to further reflect on this question. The word ‘Trust’ is defined in the Merriam-Webster dictionary as “assured reliance on the character, ability, strength, or truth of someone or something.” Another definition is “one in which confidence is placed.” I like both.

Regarding health care related stuff (including health insurance programs offered by employers), I TRUST a few particular sources. Each source has earned my trust over the years due to consistent research that attempts to factor out biases that typically are inherent in any type of research. Also, the authors of such research will generally disclose any potential outside influences that may mitigate the truthfulness of the results.

In no particular order, my short list of trusted sources is found below:

  • Health Affairs Journal – Many authors (national and international experts) write thought-provoking articles on highly researched thematic topics each month.  This is the gold standard because the information is fresh and relevant at all times. I also download their free podcasts and listen to them while I run in the morning. A subscription is necessary for this journal…but it is well worth the investment.
  • RAND Corporation – RAND provides objective research on many issues, including healthcare. Rand provides very innovative material…much of it can be found on their website at no cost!
  • Kaiser Family Foundation – Most information is at no cost…and there is a ton of information on many different health topics. A great go-to source!
  • Dartmouth Atlas of Health Care – The pioneer on the disparity of health care delivery in the U.S.

There are other sources that I highly value, but those sources (at least in my view) tend to be a level below the four mentioned above. Just know that the SOURCE of information is just as important as the content of the information being conveyed.

President Reagan adopted a signature phrase and made famous when discussing U.S. relations with the Soviet Union:  “Trust, but verify.” This phrase can also be applied to healthcare information and many other topics!

Finding Skilled Talent

David P. Lind BenchmarkSurvey findings were recently published by Deloitte Consulting LLP revealing the top five priorities in 2012 for U.S. employers relating to ‘Total Rewards’. Studies like this are helpful because it provides a glimpse into the national psyche of the corporate “mind” regarding compensation, benefits, perks and other direct/indirect payments to employees. This particular study is the 18th year of the Top Five Total Rewards Priorities series.

We all know that unemployment in this country is much too high (especially for those who are currently seeking employment). From this study, when 330 respondents ranked the most significant challenge facing their organization in the next three years, I was surprised to learn that TALENT SHORTAGE is the top challenge! We have high unemployment, but shortage of talent? This sounds a little counterintuitive to me.

What gives?

Deloittes’ explanation is that HR professionals “believe today’s surplus of job seekers has not translated to a talent surplus. Rather, employers are facing heightened competition for highly skilled talent that is not necessarily present in the large pool of unemployed.” About one quarter of the study respondents pointed to the shortage, motivation and retention of qualified talent, which is up from 16 percent in 2011.

According to the Deloitte study, here’s the list of the most significant challenges in the next three years:

  1. Shortage, motivation, and retention of qualified talent (25%)
  2. Rising cost of Total Rewards (21%)
  3. Health care reform complexity (18%)
  4. Uncertain economic conditions (10%)
  5. Total Rewards administration that meets or exceeds expectations (7%)

Having shortages in skilled positions is nothing new to employers. A labor surplus (due to high unemployment) does little to resolve labor shortage issues for key positions in some organizations (i.e. skilled production, engineering technologists, scientists, etc.). To fill these positions, employers will need to find new approaches to develop these skilled positions, regardless of the unemployment rate. Developing thoughtful training and recruitment initiatives, coupled with partnering with community colleges (and other vocational entities) will most likely help employers fill these skilled positions in the future. Vermeer Manufacturing in Pella has done just that by developing smart programs to fill these vital positions.

Without a doubt, Iowa’s workforce is our precious resource. We must continue to reinvest (and retool) in this resource to maintain competitive advantages here, nationally, and of course, internationally. We also must find ways to attract new people to Iowa and retain our existing residents…especially in rural areas. David Swenson, an economist at Iowa State University, recently wrote a piece in the Des Moines Register addressing precisely this issue.

It just makes good sense.