Benefits Matter

For the third year in a row, the Aflac WorkForces Report finds that employee satisfaction with their benefits influences their loyalty, productivity and decision to leave a company.


Without question 2013 will bring many changes to the benefits programs of companies across the country, of all sizes and industries. Amid the shifts to benefits in response to health care reform and cost pressures, companies and HR leaders will be well-served to remember the one vital thing that isn’t changing. Benefits still matter to workers and greatly influence the outcome of key HR metrics, including the ability to attract a dwindling supply of highly-skilled workers, keep them satisfied and engaged, and ultimately secure their loyalty. As such, this year will likely bring a widening gap between the companies that continue to adhere to this premise and provide their employees with a variety of benefits resources and those that do not.

For the third consecutive year, the 2013 Aflac WorkForces Report1 examined workers’ preferences and expectations about benefits, and the correlation to overall employee recruitment, job satisfaction, engagement and retention. These findings are an important reminder to employers that as they consider potential changes to their benefits program, benefits continue to play a leading role in helping them curb an equally daunting challenge – a growing difficulty in finding talent, engaging and keeping them.

In fact, even in the current labor market, one-in-three employers (34 percent) globally have reported difficulty in filling jobs due to lack of available talent. Beyond finding skilled talent, voluntary turnover by workers is increasing year by year. A PwC/Saratoga report predicts higher voluntary separation rates in 2013, higher than what they’ve seen in the past eight years. During 2011, a year characterized by high unemployment rates, we saw a 19 percent increase in high performers that left their jobs from 2009.2

Benefits Remain Fundamental Component of Talent Attraction

As the sheer number of highly-skilled, educated workers falls short of employer needs, the long-held approach of hiring workers who are already employed will likely grow. In fact, more and more employers are requiring that potential candidates be currently employed to even apply for an open position. As HR staff seeks ways to lure workers from their existing post, they will continue to promote incentives and workplace benefits their company has to offer.

The Aflac report found that a company’s benefits offerings may even trump compensation as a means of talent recruitment. The study finds that nearly six-of-ten (59 percent) workers would be at least somewhat likely to accept a job offer that included a slightly lower compensation but a more robust benefits package.

Employers are also increasingly relying upon internal referrals to find new hires, particularly as the job market tightens and employee networks on LinkedIn and Facebook grow in popularity. More and more companies are setting internal goals for increasing proportion of hires that come from internal referrals, and implementing incentives like gifts or cash to employees who refer new hires.

As this trend becomes more prevalent, benefits will factor into the success of a worker referral program. The Aflac study found that the clear majority (80 percent) of workers say their overall benefits package is at least somewhat influential over their willingness to refer a friend to their organization. Of those, 44 percent say it is extremely or very influential.

Given the unique talent market of today, companies are expanding their talent attraction and recruitment methods to include both newly-innovative and tried-and-true techniques. Yet, the potential success of those efforts will continue to be influenced by the adequacy of an organization’s benefits package.

Figure 1

Using Benefits to Drive Job Satisfaction – A Prerequisite to Engagement, Retention

The often-lengthy process of wooing candidates and onboarding new hires is relatively small compared to the efforts required to maintain employee satisfaction once they are on the job. However, achieving worker satisfaction is the foundation to keeping them engaged, productive and loyal – a contributor to corporate success.

According to Gallup, nearly nine-in-ten (86%) of engaged employees said they felt happy very often at work, compared to 11 percent of the disengaged. 3 Additionally, the Corporate Leadership Council reports that highly engaged organizations have the potential to reduce staff turnover by 87 percent and improve performance by 20 percent. 3

Organizations understand that employee job satisfaction and engagement are important to their business sustainability. Employee engagement, which must be built upon job satisfaction, is about employees connection and commitment to their organization. How can workers be highly-committed to their company when they are halfhearted about going to work everyday?

While there are arguably many factors that contribute to job satisfaction, an employee’s satisfaction with their benefits package is a growing influence. In fact, the Aflac WorkForces Report found that 84 percent of workers say their overall benefits package is at least somewhat influential over their job satisfaction, an increase from 79 percent in 2012.

The Aflac WorkForces Report finds 84 percent of workers say their overall benefits package is at least somewhat influential over their job satisfaction, an increase from 79 percent in 2012.

Furthermore, workers who are satisfied with their benefits are more likely to be satisfied with their overall job. In fact, 68 percent of workers who are extremely/very satisfied with their overall benefits package are also extremely/very satisfied with their job. This is opposed to only 5 percent of workers who are extremely/very satisfied with their overall job but not at all/not very satisfied with their benefits package.

Employers have an uphill battle when it comes to boosting job satisfaction and engagement during a time when U.S. workers are bearing the brunt of higher productivity expectations, stagnant wage increases, and the reality that empty cubicles will likely remain that way. Continuing to leverage benefits to keep workers happy and feeling protected will deliver many dividends for the foreseeable future.

The Hidden Connection between Benefits Coverage and Worker Productivity

Perhaps the only glimmer of optimism as the country emerged from the Great Recession was the fact that companies learned to become vastly more productive. The challenge now is to maintain the high productivity output expectations, adhering to a whole new set of priorities where resources are smaller and fewer dollars are being spent but in smarter ways.

These changes have also created a new reality for U.S. workers. They are bearing the brunt of higher productivity expectations. Business leaders know that in order to achieve new productivity expectations and requirements, they need productive employees. And productive employees deliver tremendous value for their company, but only in return for tangible and intangible value that enhances their lives.

63 percent of employees say that a benefit package offering is important to their work productivity (Source: 2013 Aflac WorkForces Report)

Employees have been exposed to a variety of strategies designed to make them as productive as possible, such as special training, career development and employee incentives. Yet, many employers fail to recognize the correlation between employee work productivity and a satisfactory benefits package despite it becoming ever more apparent to workers. The 2013 Aflac Workforces Report found that 63 percent of employees say that an overall benefits package is extremely or very important to their work productivity, a 5 percent point increase from 2012 (figure 2).

Growing Importance of Benefits on Productivity

  2012 2013
An overall benefits package is extremely/very important to work productivity. 58% 63%
Adequate insurance benefits have a strong/very strong impact on helping them cope with personal issues. 47% 53%

Figure 2

Companies are also experiencing higher productivity losses due to distracted workers. More than one-quarter of workers who have experienced a personal issue that impacted their ability to get their work done, said it was due to a health issue specifically. More than half (56 percent) of those said it decreased their productivity at work.

Additionally, the Aflac study finds that 49 percent of companies estimate their average productivity loss stemming from employees’ concern over personal issues is between 11 and 30 percent. The average productivity loss for companies amounts to 18.6 percent. That can amount to more than 200 hours per week in lost productivity for a small company with just 100 employees.

The bottom line is that employers can achieve two critical productivity outcomes by providing comprehensive benefits coverage to its workforce – fulfilling the desire and expectation of workers to receive such benefits to impact their productivity, and helping ensure a healthy, non-distracted talent machine to deliver on productivity demands.

Benefits Programs That Meet Worker Needs Help Combat Worker Attrition

The Bureau of Labor Statistics (BLS), in a February 2012 report, showed that the number of workers quitting has been steadily rising since its low point in December 2009. 4 According to the 2013 Aflac WorkForces Report, nearly half (46 percent) of all workers are at least somewhat likely to look for a new job in the next 12 months, and 26 percent are very or extremely likely to move on to another opportunity this year.

As HR decision-makers analyze the best measures to prevent an exodus of workers, the Aflac WorkForces Report provides clear, undeniable evidence that a world-class benefits program can deliver results. In fact, the study found that workers who are extremely or very satisfied with their benefits program are three times more likely to stay with their employer, compared to those workers who are dissatisfied with their benefits program.

“Workers who are extremely or very satisfied with their benefits program are nearly three times more likely to stay with their employer, compared to those workers who are dissatisfied with their benefits program.”

Further, when asked how influential an overall benefits package is in the decision to leave a current employer, 75 percent say at least somewhat influential. And, when asked what their current employer could do to keep them in your job, 46 percent said “improve my benefits package.”

The Aflac WorkForces Report shows that employee perceptions of the degree to which their employers care about them weighs heavily on their loyalty or lack thereof. More than 4-in-10 (44 percent) of workers who disagree that their employer takes care of its employees are at least somewhat likely to leave in the next year, compared to 92 percent of those who at least somewhat agree their employer takes care of its employees and are not at all/not very likely to look for another job. Further, 61 percent of those at least somewhat likely to look for a new job said that a comprehensive benefits package demonstrates the fact that their employer cares about them.

The challenge for employers is that this perception can only best be combated with action – through offering adequate health care benefits that meet their employees’ needs.

BENEFITS IMPACT ON DECISION TO LEAVE EMPLOYER Extremely/Very Likely to Leave Job in Next 12 Months
An overall benefits package is at least somewhat important to my decision to leave my employer. 78%
I’d be at least somewhat likely to accept a job offer with a more robust benefits package but lower compensation. 75%
I’m only somewhat or not very satisfied with my current benefits package. 64%
Current benefits package only meets the needs of my family somewhat or not very well. 57%
How to Enhance Your Benefit Program Options and Delivery

As we know, employees expect benefits options, and these options factor heavily into their perception of their employer, job satisfaction, engagement, productivity and loyalty. Benefits are a core component of employer-employee exchange – provide productivity and results to our workplace, and we will provide you with something of value. But what if the benefits package isn’t of value? What if there are needs and preferences that aren’t being met?

According to the Aflac study, only 16 percent of workers today feel the current benefits package offered by their employer meets their current family needs extremely well. Even beyond satisfaction, many workers feel unprotected by their current insurance coverage. Only seven percent of employees say they completely agree that they are protected by their current insurance coverage.

Engage Workers in the Identification of Benefits Options

The online movement has made the ability to survey workers much more accessible and at very little cost. Yet, little over half (59 percent) of organizations survey their employees to understand their satisfaction with benefit offerings.

Making assumptions within the realm of benefits and health insurance can be potentially damaging, not only to workers who may feel their needs aren’t being met, but also to a company’s productivity and retention levels.

For example, when it comes to voluntary benefits – an increasingly popular method for companies to offer more options to employees for additional insurance without any direct cost to the company – misinformation and misunderstanding between employers and employees is prevalent.

Many HR decision-makers choose not to add voluntary benefits that could help workers with the financial obligations of unexpected health events because they feel their employees don’t have an interest in purchasing such options. However, survey findings conclude quite the opposite. Seventy-five percent of employees say they would be interested in purchasing additional insurance if it were offered by their employer.

When asked why adding voluntary insurance benefits would be important to them, the top three reasons given were:

  • It offers me more options when it comes to health care coverage
  • To meet my needs
  • To give me more comprehensive insurance coverage

Adding voluntary plans to a company’s offerings can also help companies build robust benefits packages while providing workers with the additional coverage choices that best suit their individual needs. The 2013 Aflac WorkForces Report shows that workers who are most satisfied with their benefits package are enrolled in voluntary benefits, more so than those workers who are not enrolled in voluntary benefits.

If organizations invest in time and resources to clearly understand the preferences and needs of their workforce, not only will employees be more satisfied with their benefits package but they will have greater peace of mind knowing they are adequately protected. With a clearer view as to the knowledge gaps that exist, HR executives can better address communication stop-gaps and find ways to make benefits information more robust and accessible.

Tailor Benefits Packages to Workers’ Life Stage or Level

The Aflac WorkForces Report found that the overwhelming majority of workers (92 percent) would be more likely to take advantage of a benefits package tailored to their personal situation. Yet, 62 percent of companies say they don’t tailor their benefits offerings based on the needs of employees at different levels or life stages, and only 11 percent feel it is extremely important to do so.

Even the slightest customization of benefits offerings can result in higher participation and satisfaction with benefits for workers. Seventy percent of companies whose employees are satisfied with their benefits package tailor their benefits packages based on levels or life stages.

Improve benefit communications

Benefits communications are not often leveraged effectively; however, 79 percent of workers at least somewhat agree that a well-communicated benefits package would make them less likely to leave their job, a 35 percent increase from 2012 Aflac WorkForces Report findings. Unfortunately, feedback from U.S. workers indicates that most companies’ benefits communications and education programs aren’t up to par. 65 percent of workers say that their employer only communicates about benefits at open enrollment or new hire enrollment (figure 3).  

Frequency of Benefits Communication and Likelihood to Leave  
Communicates about benefits only at open enrollment or new hire enrollment 56%
Communications 2 times throughout the year 20%
Communicates 3-5 times throughout the year 18%
Communications 6-9 times throughout the year 3%
Communications 10+ times throughout the year 3%

Figure 3

A crucial component in shifting the way a company approaches benefit communications is to first acknowledge the possibility that it needs improving. Often, executives have false perceptions. For example, 93 percent of employers believe they are at least somewhat effective at benefits communication. However, 43 percent of workers say HR communicates too little.

79% of workers say they would be less likely to leave if they had a well-communicated benefits program.(Source: 2013 Aflac WorkForces Report)

Too often, employers only communicate their benefits programs to its workers one or two times a year, heaping on the information at open enrollment or at hire. Employees are already struggling to better understand even the basic of health care terms, so expecting them to retain large amounts of benefit information at once is unrealistic, and unfair.

Try communicating different components of your employee benefit program throughout the year. Or, consider utilizing online venues where employees can access any information, tools, and tips about their companies’ benefits packages. Consider using a variety of methods, including e-mail, voicemail, online outlets, portal postings, and in-person meetings with employees. Many insurance providers offer these services and best-in-class communication vehicles to clients.

The Bottom Line: Benefits Matter

Much has changed for U.S. employers in the past few years, to say the least. Although the economic landscape may look vastly different, and the unemployment situation a far cry from the economic heyday in 2007, the need for an organization to compete for top talent to drive innovation, productivity and market leadership remains steadfast.

Equally unwavering is workers’ reliance upon and expectation of benefits options. In fact, employees are arguably demanding a more robust benefits package to offset the relative halt in pay raises, promotions, bonuses and even reduced work schedules.

As your organization strives to meet the challenges of today’s environment, how do your benefits options stack up against those of your competitors? Are you considered an employer of choice? Does your benefits package demonstrate that you care about the welfare and satisfaction of your workforce?

Organizations must adhere to some basic best-in-class strategies when it comes to benefits, including:

  • Ongoing surveys of employee base to gauge interest level and satisfaction with benefits options.
  • A wide range of benefits offerings, both insurance and non-insurance-related, that are best suited to worker demand.
  • Tailored options and communication of benefits to specific levels or life stages of workers.
  • Frequent communication throughout the year about their benefits program and enrollment.
  • High degree of awareness and belief in connection between benefits and profitability measures.
About the Aflac WorkForces Report

The 2013 Aflac WorkForces Report is the 3 rd annual Aflac employee benefits study examining benefit trends and attitudes. The study, conducted by Research Now between January 4 and January 24, 2013 captures responses from 1,884 benefits decision-makers and 5,299 employees across the U.S. Benefits Matter is one of four key themes from the 2013 study. To learn more about the Aflac WorkForces Report and to read the articles on Consumer-Driven Health Care, The Competitive Edge and Growing Need for Voluntary Products, visit

Works Cited:
12013 Aflac WorkForces Report, a study conducted by Research Now for Aflac, January 2013.
2PwC/Saratoga 2012/2013 US Human Capital Effectiveness Report,
3Gallup and Towers Watson Studies, cited January 10, 2012, accessed March 25, 2013
4U.S. Bureau of Labor Statistics, Job Opening and Labor Survey, May 2012