I was reading the results of the recent Making Smart Benefit Choices survey of workers by Mercer and was struck by the confluence of societal issues that are impacting the choices workers are making today. The key insights from the survey results are these:
- Workers desire benefits with a decidedly short-term benefit over those with longer-term value
- Employers need to ramp up their workforce education efforts regarding balancing short- and long-term benefit choices
Employers are not Marie Antoinette. “Let them eat cake” cannot be an appropriate response when surveys show that cake would be a more popular benefit than, say, fruit or broccoli. (Mayor Bloomberg’s foray into the regulation of food options notwithstanding.)
So in the age of disappearing and underfunded defined pension plans and the very real specter of a bankrupt Social Security system in the US (and similar situations in most developed nations), what are the responsibilities of employers to their employees when considering changes in benefit plans? How much should employers take into account their employees’ preferences for short-term gain over long-term value?
It’s interesting to note this survey’s results. In part, respondents were asked about their preferences in a trade-off (conjoint) analysis that allowed Mercer to rank 13 core benefits. A salary increase of $500 was used as the benchmark variable against which to measure how benefits are valued by workers. Here is the chart with the results:
I’m fascinated that after a $500 salary increase, the next choice is one week of paid time off. This certainly synchs with the data that SHRM and the Families and Work Institute are publishing that more flexibility over time is becoming a cultural imperative – and the financial value of a week off is greater than $500 if you’re making more than $26,000 per year.
But given the state of retirement benefits, Social Security, and the general lack of preparedness of the workforce for retirement, the short term focus of the respondents is arresting.
But then again, we live in a business world that measures organization success quarter by quarter, rather than year by year or through business cycles. We live in a political world that brings the economy to “fiscal cliffs” with some regularity. We live in a society that appears to value now in ways that leave us unprepared for tomorrow.
So I guess it really shouldn’t surprise us that workers focus on now rather than tomorrow even though an additional $500 402(k) increase would have much greater value over time. What’s an employer to do in all good conscience? Give more paid time off or ensure a little more retirement stability? Give more paid time off or reduce employees’ share of health care costs?
This is a tough one with which HR and Benefits leaders in organizations of all sizes are wrestling. Employers surely want benefits packages that attract and retain their best and brightest talent. Employers surely want their employees to be better prepared for an uncertain financial future. It seems as if these may be in conflict, based on this survey’s results. So how to decide?
“Let them eat cake” is one way to go: continue the focus on now and leave the future to the business and policy and political leaders of the future.
I think I’d rather use some of today’s resources to educate my workforce so that they’re making truly educated choices. I think I’d rather use some of today’s influence to begin to leave behind the now focus for a future focus that might ensure a little more sustainability all around.
While I love cake – especially the chocolate kind – I think that employers have a responsibility to the economy and to the future as well as to the workforce. What about you? Are you a cake or a broccoli professional?