Why Great Benefits are Good Business Lessons from The Principal 10 Best Companies for Financial Security 2008 Dennis Long, Vice President Principal Consulting Group
Agenda • The Principal 10 Best Winners— 2008 • Great Benefits At-a-Glance • Why Employee Financial Security Matters • The Formula for Success • The Holy Grail: Communication
The Principal 10 Best Companies for Employee Financial Security – Companies with 5 – 1, 000 employees – Commitment to employee financial security – Showcase role models – 7 years – 4, 885 nominations – 70 winning companies – Do not need to be a customer of The Principal
How Are They Selected? – Mathew Greenwald and Associates – Independent panel of experts – Anonymous entrants
Independent & Objective Process
The Winners • 1 st United Services Credit Union • A. Y Mc. Donald Manufacturing Company • CENTRIA • Jewelers Mutual Insurance Company • NJ Sullivan Company, Inc. • NORCAL Mutual Insurance Company • North Island Credit Union • SAE International • The Spiratex Company • Torch Technologies, Inc.
Criteria Entrants evaluated on: • Breadth and depth of financial benefits offered • Level of commitment to benefits What kind of benefits? • Those that contribute most to long-term financial security for employees
The Benefits Medical Coverage • 100 percent offer medical insurance • 8 pay at least 80% of an employee’s premium, and 5 pay 85 percent or more of the premium • 7 pay 80 percent or more of dependents’ premiums • 5 offer medical insurance and/or prescription drug coverage to their retirees • 100 percent offer wellness programs
The Benefits Retirement • 7 out of 10 offer 2 or more retirement plans, including 401(k), Profit Sharing and ESOP • 6 offer a defined benefit pension plan • Among the 401(k) or 403(b) retirement plans offered: – Average employee participation rate: 91. 9% – Average deferral rate: 8 percent – 9 provide match to employee 401(k) contributions
The Benefits Insurance • 100% pay for group life insurance • 9 pay 100% premiums for long-term disability coverage. • All offer short term disability insurance; ___ pay • 6 offer long term care insurance
2008 Trends • Staying the course • Focus on boosting retirement savings • Phased retirement • Expanded wellness programs • Ramped up communication and education efforts • One-on-one meetings at the worksite
10 Best Companies Devote a High Share of Their Total Compensation Package to Benefits Seven in ten devote at least 30% of the total compensation package to benefits. 70% 40% or more 30% to 39% 20% to 29% Less than 20% Source: The Principal 10 Best Results 2004 -2008
Why Employee Financial Security Matters Competitive Advantage • Retention of valued employees • Attraction of valuable employees • Improved loyalty and motivation of employees • Improved customer retention and satisfaction • Improved productivity • Enhanced company’s image • Improved company’s financial position “You can draw a straight line between the overall benefit program and the success of our company. ” -Bob Rubrik, Director of Administration, CENTRIA (2008 10 Best Winner)
Top 5 most valued workplace benefits (Gen X and Gen Y combined) Source: “Preparing for Their Future: A Look at the Financial State of Gen X and Gen Y” – 2008 ASEC and AARP
Attract & retain great employees: As Boomers retire, talent shortage grows # of jobs to be filled in 2012: 165, 300, 000 # of available workers in 2012: 162, 300, 000 = shortage of 3 Million workers! Source: U. S. Bureau of Labor Statistics
Building the case for benefits Increased retention/Reduced turnover costs: Reduce Voluntary Turnover The Principal 10 Best Companies turnover rate: 8. 2% National turnover rate: 21. 94% Source: The Principal 10 Best Companies for Financial Security, 2008; Bureau of Labor Statistics
Improve Bottom Line Results ü 4. 3% ü 20% ü 16. 1% ü 57% higher shareholder value Companies with effective health coverage and productivity programs achieve: more revenue per employee higher market value higher shareholder returns Source: “Building an Effective Health & Productivity Framework” – Watson Wyatt 2007
The Formula for Success FINANCIAL + FITNESS for employees PHYSICAL = FITNESS for employees FISCAL FITNESS for the business
Financial Fitness Retirement Best Practices BEST PRACTICE: EMERGING BEST PRACTICE: • Monitor whether employees are • Contact employees individually regarding diversification • Base employer match on years of participation in the plan • Phased retirement • Roth 401(k) • Replacement ratio as measure of success • One on one education • Make meetings mandatory diversifying • Offer investment choices – but not too many • Make participation easy with “auto” features • Give employees an incentive to increase contributions (Offer a match, etc. ) • Offer lifecycle/lifestyle funds Source: The Principal 10 Best Companies for Employee Financial Security
Basics of a great program: Financial Protection Best Practices BEST PRACTICES: EMERGING BEST PRACTICE: • Mandatory enrollment meetings • Face-to-face meetings • Needs analysis • Simple financial planning tools • Protecting employee’s income • Benefit designs to encourage return to work • Foundation of coverage with options to buy additional coverage – voluntary benefits • Choice of benefits Source: The Principal 10 Best Companies for Employee Financial Security
The Formula for Success FINANCIAL + FITNESS for employees PHYSICAL = FITNESS for employees FISCAL FITNESS for the business
Benefits program best practices: Employee wellness can help control healthcare costs +59. 1% +31. 1% "We firmly believe wellness will lower our health care costs over the long term. " – Mark Sherwin, President, CENTRIA Source: Principal Wellness study comparing claims of participants with 3 or more health screenings to non-screened individuals.
Benefits program best practices: Health & Wellness Best Practices BEST PRACTICE: EMERGING BEST PRACTICE: • Focus on wellness • Offer free health screenings • Establish baseline measures • Engagement models of healthcare (claims, costs, etc. ) • Pay for preventive care • Disease management • Tie wellness participation to – HSA – HRA – Co-insurance vs. co-pay • Cost transparency • Financial responsibility insurance premiums • Offer choice to meet employees’ varying needs Source: The Principal 10 Best Companies for Employee Financial Security
The Formula for Success The Holy Grail Communication!
Maximizing the benefits investment Communicate True Value Employees underestimate the true value of their benefits by 43% Source: HR Daily Advisor, June 2007
Employees are more satisfied with benefits when they understand their value Good benefits + poor communication = Good benefits + good communication = 17% turnover 8% Source: Watson Wyatt 2007 through HERO Think Tank turnover
Educate: Educate. Communicate. Repeat. It takes an average of 7 times before a person learns and remembers
The Power of One-on-One Education Employees are Struggling • 80% of employees are worried about their personal finances* • Employees are more likely to get their CAR an annual checkup than themselves. ** Percent of employees who have done this in the past year Car check-up Health check-up **2 nd 75% Financial check-up * Gallup 95% 28% Poll, May 2008 Quarter 2008 Principal Well-Being Index
Educate: Communication Best Practices BEST PRACTICE: • “Age” education with workforce • Distribute personalized benefit statements • Use a combination of tools: email, newsletters, video, web, paycheck stuffers • Use simple language EMERGING BEST PRACTICE: • Personalization - Text messages? • Total compensation statement – use as retention tool • Include spouses • Educate on misused or underused benefits • Share what you’re up against • One-on-one education Year round Endeavor! Source: The Principal 10 Best Companies for Employee Financial Security
Educate: Individual education increasing in popularity 73% of workers use written materials from work; however, workers find financial professionals to be the MOST USEFUL information source. 2007 EBRI Retirement Confidence Survey
Best Practices Guide January 2009 www. principal. com/10 best Entries accepted beginning February 1, 2009
Скачать презентацию Why Great Benefits are Good Business Lessons from
de7705c466119860a55f9dc986c55651.ppt