July 23, 2014
85% of employees believe that their current benefits are not adequate to take care of their families, this according to a recently released Aflac survey reported in Employee Benefit Advisor on July 16th. Said another way, only 14% of employees believe that their benefits meet their family’s needs extremely well.
In the same Aflac survey, 80% of employees said that a well-communicated benefits package would make them less likely to leave their jobs – though they also said that is not what they had at this time.
57% of employees would consider taking a new job with lower pay, but better benefits.“
Employers are spending hundreds of billions of dollars on providing employees with benefits and an astonishingly high proportion of those employees are dissatisfied with those benefits and find them inadequate.
Why? Because the employer is deciding what benefits to offer in the World War II-era “defined benefits” model – the employer picks what will be available for benefits and all of the employees live with that choice. Employers will need a new approach.
We cannot solve our problems with the same thinking we used when we created them.”
If employers want to have both happier, more satisfied employees and employees who both understand and appreciate their benefits – there is a different approach and that is called “defined contribution.” Defined contribution is where the employer decides what his or her budget for benefits will be, and then divides up that budget among his or her employees and allows the employees to decide what benefits to purchase.
The transition from defined benefits to defined contribution is why private, association marketplaces are gaining in popularity, as it is in the association marketplace where employees go to make their benefit choices with the help of a professional benefits advisor.
41% of employees who admit they’re likely to look for a new job in the near future say that having a better benefits package would keep them in their current jobs.“
The most effective way of improving an employee benefit package is to put the employee in charge of what benefits the employee can buy! The employer doesn’t spend any more on benefits in the defined contribution model – the only difference is that thr employer allows the employee to decide what to buy.
It is time to change the approach to providing employee benefits and that is why we have private, association-based health insurance and employee benefits marketplaces.