Benefits and the Coming Employee Retention Crisis

As the Great Recession has worn on, more and more American companies have been forced to downsize their workforces and replace human capital with technology. The result has been a rapid increase in productivity and record corporate profits.

Unfortunately, those pay-offs have come at a price. Many of the remaining employees are being asked to do more for the same compensation. Although unhappy about this arrangement, after seeing their coworkers laid off, these employees accept the unspoken truth: "Be happy that you still have a job at all." As glad as most are to still be working, their level of satisfaction and their loyalty to the firm have eroded. With fears about job security, and few prospects for changing jobs in today's economic climate, these employees "soldier on," biding their time.

For many companies, this may lead to a rude awakening when the economy eventually revives. The 9th Annual MetLife's ! Study of Employee Benefits Trends offers a warning and clear message to employers: "Reprioritize employee loyalty and satisfaction, or economic recovery may arrive with unanticipated setbacks for retention and productivity."

In other words, happy employees now may mean less turnover later.
The MetLife study revealed a startling statistic: "One in three employees hopes to be working elsewhere in the next 12 months." This is a high level of dissatisfaction and implicit disloyalty. But the study also revealed a disconnect. Employers perceive employees to be more loyal than they are. For this reason, most employers are largely oblivious to the looming retention challenge, and uncommitted to addressing it.

Here are the key numbers from the MetLife study:

• Just 44 percent of small business employees felt loyal to their company in 2010.
• By comparison, 62 percent of the same category of employees felt l! oyal in 2008.
• Meanwhile, 54 percent of employers beli eve their employees feel a strong sense of loyalty to their firm.
• Only 22 percent of employers listed retaining employees as their number one concern, with 33 percent saying...
For more in-depth analysis of what this means to you, click here.