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Small Business Workers Unsatisfied with Benefits
More than half would be likely to accept jobs with slightly lower pay but better benefits

By Stephen Miller, CEBS  7/18/2014

updated 8/7/2014

Although 63 percent of employees at small businesses say they are extremely or very satisfied with their job, many think there's room for improvement when it comes to their benefits packages. Only 12 percent are extremely satisfied with their benefits and only 14 percent believe their benefits package meets their current family needs extremely well, according to the 2014 Aflac WorkForces Report for Small Businesses.

The study, released by Aflac, a provider of voluntary insurance, captured responses from 1,856 benefits decision-makers and 5,209 employees across the U.S. in early 2014. It found that as small businesses (three to 99 employees) adapt to a slowly growing economy and health care reform, they remain concerned about taking care of employees and continuing their benefits options. Among surveyed small businesses:

  45 percent hired new full-time workers in 2013, compared to 71 percent of midsized companies and 60 percent of large organizations.

12 percent changed some employee hours from full- to part-time in 2013.

34 percent said they gave employees smaller raises in 2013 than in previous years, while 24 percent said they planned to do the same in 2014 and 18 percent planned to eliminate or delay raises this year.

Job Satisfaction Doesn’t Guarantee Loyalty

For small-business employees, benefits can be the deciding factor in staying with their employer, the survey revealed that small-business workers said:

They're likely to accept jobs with slightly lower compensation but better benefits (57 percent of respondents).

Improving their benefits packages is one thing their employers could do to keep them in their job (47 percent).

“Employees at a small business might be satisfied with their pay, enjoy their company environment, their colleagues and the work itself, but that doesn't mean better benefits offerings elsewhere won't entice them to leave,” said Teresa White, executive vice president and chief operating officer, Aflac Columbus. “These findings should alert small-business decision-makers that robust benefits,” including voluntary offerings, “are an important way to keep employees engaged, productive and loyal.”

A Personalized Approach

“Multiple surveys attest to the power of voluntary benefits to retain and attract employees. That said, voluntary benefits aren’t the proverbial silver bullet,” Steve Adams, CEO of Navera, a provider of benefit support services, commented about the survey findings.

“Employers—whether small or large—seeking the potential rewards from offering voluntary benefits need to understand that simply saying these benefits are available isn’t enough,” Adams noted. They should “engage users on their terms, and educate and advise them according to their individual context and circumstances,” he advised. 

“Simply offering voluntary benefits to employees is not enough,” concurred Chris Hill, CEO of Spotlite, a provider of online employee benefits education, decision support and enrollment systems. “Successful voluntary benefits enrollments reveal two essential ingredients,” he noted:

Benefits plans need to be presented to employees with simple and clear directions that are easy to understand and enable employees to make well-informed decisions.

Enrollment must be accessible 24/7 so that employees are able to participate in the process when it’s convenient for them, at the time and location of their choice.

“To ensure an experience that engages, satisfies and retains, a voluntary benefits enrollment should have the look and feel of a high-quality online shopping experience,” Hill remarked.​ ​ ​

Benefit Satisfaction Aligns with Job Satisfaction

Employee satisfaction with their benefits continues to closely relate to satisfaction with their employer, according to research recently released by Unum, a provider of disability insurance benefits.

A December 2013 survey of 1,521 working adults sponsored by Unum found:

More than three-quarters (77 percent) of those workers who rate their benefits package as excellent or very good also rate their employer as an excellent or very good place to work.

By contrast, only 17 percent of employees who consider their benefits package to be fair or poor rate their workplace as excellent or very good.

79 percent of workers who reviewed benefits in the past year and rate their education as excellent or very good also rate their employer as excellent or very good—compared to only 30 percent of those who said the education they received was fair or poor.

Only 33 percent of employees who were asked to review benefits in the prior year rate the benefits education they received as excellent or very good—a drop from 2012 and a reversal to the upward trend in ratings since 2009.

Nearly three in 10 (28 percent) rate their benefits education as fair or poor.

Overall, only half (49 percent) of U.S. workers rate their employer as an excellent or very good place to work. Less than half (47 percent) of employees who were offered benefits by their employer rate their benefits as excellent or very good. This was the lowest rating of benefits in Unum’s six years of conducting this research.

“With health care reform and other changes in employee benefit plans, employees have so much information to digest right now,” explained Bill Dalicandro, vice president of the consumer solutions group at Unum. “Employers can play such a great role in helping their employees understand their options so they will feel comfortable making benefits decisions.”

“This research underscores the value of an effective benefits education plan because when an employee understands their benefits, they tend to value them more and in turn may then value their employers more for providing access to them,” added Dalicandro.


Stephen Miller, CEBS, is an online editor/manager for SHRM. Follow him on Twitter @SHRMsmiller.

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