New resource aims to help small businesses use their
employee benefits plans more strategically
Small businesses and their brokers stand at a crossroad
in a difficult economy when it’s becoming more critical for them
to spruce up their employee benefit offerings and create greater
awareness about plans that are available in order for them and their
employees to realize the greatest value. They also need to think about
benefits as an investment rather than an expense with the returns
potentially being greater employee loyalty, engagement and retention.
MetLife has published new benefits research, Small Business
Benefits: Cost-Effective Strategies for Maximizing ROI, that should
help employers with fewer than 500 employees better understand how to
optimize the value of their benefits program without necessarily adding
significantly to their overall benefits spend.
The insights from this supplement to MetLife’s 7th annual
Employee Benefits Trends Study should also help small businesses better
understand how to use these plans more strategically as they strive to
achieve their business goals.
“Small businesses are really important to our country and are a
growing sector that represents about 70% of new jobs
historically,” says Georgette Piligian, MetLife’s senior
vice president, small business strategy and operations. She cites U.S.
Census Bureau statistics showing that 99% of all American companies
employ fewer than 500 people.
There are several key messages that Small Business Benefits:
Cost-Effective Strategies for Maximizing ROI delivers. One is the
link between a company’s successful benefits package and
addressing objectives such as employee benefits satisfaction and
loyalty. Another is to help smaller employers maximize the return on
investment associated with their benefit programs, particularly for
programs that have not been adequately communicated.
Considering that only about one-third of employees in smaller
companies (those with fewer than 500 workers) say that the benefits
communication they receive is effective, Piligian says the new resource
offers employers best practices to target employee needs.
As part of that approach, for example, these firms should attempt to
show the correlation between having disability insurance and protecting
an income stream (arguably an employee’s most valued asset) in the
unfortunate event that they become sick or injured and cannot work
– a likelihood that may often be underestimated by the average
Employees who work for smaller businesses generally express less
satisfaction with their benefits compared to employees who work at much
larger companies. This is likely because historically the benefits
packages at small businesses have been less robust which may undermine
efforts to attract and retain exceptional talent against larger
competitors. In good economic times and bad, talented and engaged
employees are important to an employer’s sustained viability.
Piligian says employers should be mindful that financial protection
is a growing priority for employees at a time when benefits appreciation
is growing. Nearly half of working Americans polled by MetLife say
they’re taking greater interest in the benefits they receive at
work because of the recession.
Low cost, high yield
Perhaps the most important point for this audience to realize is that
benefits can be expanded along with their perceived value with little or
no increase in overall costs. Employee-pay-all plans offered on a
voluntary basis featuring the benefits of group rates can help round out
While the carrier’s findings show that life, disability and
dental insurance products are major contributors to an employee’s
sense of loyalty in addition to some form of group medical coverage
(which 96% of all companies offer); there are some significant missed
For example, only 65% of firms with fewer than 500 employees offer
dental plans compared with 93% of those with more than 500 employees.
It’s also worth noting that 88% of employees who work for small
firms are not only interested in receiving more benefits but are also
willing to pay for them.
Other areas where small employers can make a significant difference
involve providing access to financial planners for retirement advice
(46% of surveyed small business employees have expressed such interest),
or adopting an employee wellness program.
Whatever shape the benefits package takes, there’s a need to
continuously communicate a small employer’s commitment to their
workforce and help strengthen employee engagement. Methods can include a
letter from the business owner explaining why benefits are being
offered, offering appropriate resources for financial planning and other
areas, and dedicating an entire month to raising awareness about a
These strategies “need to address the listening and learning
patterns of the organization” at a time when the workforce is
becoming increasingly diverse, Piligian adds. “Our research shows
a correlation between benefits satisfaction, job satisfaction and
employee retention. The cost of replacing people with critical knowledge
To obtain a copy of Small Business Benefits: Cost-Effective
Strategies for Maximizing ROI and learn more about creative and
cost-effective strategies that can help small businesses optimize their
benefits programs, visit whymetlife.com/sbtrends2009.