If you’ve been budgeting for a better employee health-care plan for your company, you may want to change your tactics. A new study says that employees are now more focused on retirement benefits than on health-care benefits.
According to a survey of almost 5,000 U.S. employees released this week by the consulting firm Willis Towers Watson, 66 percent of respondents were willing to have more taken from their paychecks each month to support larger and more generous retirement benefits. Only 38 percent of those same respondents were willing to pay more each month for better health-care benefits.
“While employees continue to feel vulnerable about their long-term financial prospects and say they are willing to pay more for greater retirement security, health care benefits evoke a much different response,” an economist from Willis Towers Watson said in a news release. “Employees, who continue to see their health care costs increase annually, are basically saying ‘enough is enough’ as far fewer are willing to pay more each month for more generous health benefits and more predictable costs.”
Health care is one of the most significant costs for an employer, and there are reports that premiums may be on the rise over the next few years. But this study seems to suggest that most employers are providing decent health and retirement plans at a reasonable cost for their employees. Sixty-six percent of workers surveyed said that their health plan meets their needs, and 59 percent said the same about their retirement plans.
But when given the choice, a majority of employees would rather give up more of their paycheck for a better retirement plan over health-care benefits. They want more choices and flexibility, too. Employers who realize this trend can better tailor their benefit packages to attract and retain good people — a big challenge in these tight labor times. The Willis Towers Watson research found that more than half of employees who believe they have good benefits are “highly engaged” in their jobs.
The takeaway for employers of all sizes: Revisit your benefit plans this year. You and your employees may be spending more on health care than needed — and less than desired on good retirement options. It could be time to switch things up.