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Benefits Valued by Iowa Employees

Happy Employees in IowaOur 2007 Iowa Employment Values Study sheds light on many questions that employers continue to wrestle with today…namely, what workplace values are most important to their employees? In last week’s blog, I discussed the 11 key workplace values that are ranked by employees and their executives.

Of the 11 workplace values rated, Benefits ranked number seven, which was seven points less than the top-ranked value, Respect. Within this Study, differences of four or more points are statistically significant. The three values that were at least 4 points greater than Benefits were Respect, Achievement and Balance (having the opportunity to balance work time with family time). The other three ahead of Benefits, but fewer than four points were: Job Security, Money and Employer Leadership. Time will tell whether employees continue to rank these values in a similar fashion from six years ago.

We asked employees and their bosses in this Study to rank the importance of nine benefits (Table below). The bosses (executives) rated how important they believed each benefit was to their employees. NOTE: The questions were presented to respondents using Likert scales. Scored on a 1 to 100 scale, the highest number represents the most positive response.

Values Study - Benefits

As you might expect, Health Insurance and Vacations are rated highly by both groups. In most other benefit categories, however, executives underrated the importance to their employees.

Executives severely underrated the importance of Long-Term Disability Insurance, Life Insurance and Dental Insurance to their employees. Retirement is also substantially more important to employees than executives realized. Employees ranked Retirement first, while executives ranked it fifth. One must wonder how the Great Recession has impacted such rankings today…

Some other key findings for employers to consider from this 2007 Study include:

  • Benefits by Gender: Females reported almost all benefits as more important than their male counterparts. Female employees responded that Sick Pay and Holidays were much more important than their male counterparts and female executives recognized this importance. Also, Health Insurance, Long-Term Disability Insurance, Life Insurance and Dental Insurance were much more important to female employees than male employees. Male executives were the least cognizant of the importance of all of the benefits listed to their female employees.
  • Benefits by Age: Categories of those younger and those older than 50 years of age were also studied. With the exception of Health Insurance, executives under 50 grossly underestimated the importance of benefits to their employees, especially Retirement, Long-Term Disability Insurance, Life Insurance and Flex Spending. Employees of both age categories rated the importance of these benefits similarly, with the exception of Flex Spending which was much more important to the younger group of employees.
  • Benefits by Tenure: Employees with five years or less at their current job consider Health Insurance to be the most important benefit. However, those employees with greater tenure consider Retirement plans most important. Executives underestimated the importance of five major benefits (Retirement, Dental Insurance, Long-Term Disability Insurance, Life Insurance and Flex Spending). This Study also found that executives with less tenure are slightly more accurate in their perceptions than those with greater tenure.

Much can be learned from this Study which can be applied in today’s world. One important takeaway is that executives must be more cognizant of what is most important to their employees and continue to find ways to bridge this gap. This Study suggests that employees have needs and desires that are far different from what many executives perceive. By the way, the new Lindex tool recently developed by David P. Lind Benchmark, uses key findings from this Study when determining the weights assigned for each benefit ‘score.’ 

Executive responses from smaller organizations disclose that they are less in tune with what is important to their employees than executives from larger organizations. Since turnover can be even more crippling to a small organization, these executive misperceptions are extremely important to recognize. The results from this Study reveal that executives from smaller organizations need to better understand the importance of employee benefits to their staff.

To attract and retain employees, it is critical for organizations to understand what drives commitment – particularly among top performing employees – and act on it. Iowa employees responded negatively to their organization’s ability to recognize and reward the best workers and to the availability of advancement opportunities within the organization.

The clear disconnect between employers and their employees in this six-year-old Study should encourage Iowa organizations to review their workplace environment and consider enhancements to their total rewards program.

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