VideoWhat are the primary benefits concerns of 2003? It all depends on who you ask.
Employers regard the need to control rising health and welfare costs as the top priority for the fourth consecutive year. Meanwhile, employees say retirement and investment issues are the primary benefits concerns in 2003. This according to a survey of employee-benefits specialists conducted by the International Society of Certified Employee Benefit Specialists (ISCEBS) and the Human Capital Advisory Services practice of Deloitte & Touche LLP.
"Employee concerns over retirement planning continue to be important as a large percentage of the workforce nears retirement," explains Mary L. Komornicka, president of ISCEBS. "With the downturn in the economy, many employees have experienced dramatic decreases in their invested retirement savings and are searching for ways to protect and maximize their nest eggs. Indeed, many employees have been forced to reconsider when they will be able to retire."
Benefits have also emerged as a major issue among companies seeking to control costs in a difficult economic environment.
As we reported last week, benefits costs averaged 39 percent of total payroll costs in 2001 among employers surveyed by The U.S. Chamber of Commerce. That's an increase from the previous year, when benefits came in at 37.5 percent of payroll. (To see how some companies are controlling medical-benefit costs, see CFO.com's special report, "Ill Wind: The Health-Benefits Crisis.")
Altogether, nearly 86 percent of the 437 employee-benefits specialists surveyed by ISCEBS and D&T identified controlling health and welfare costs among their top five priorities. This was the top priority across all regions, industries, ages, and genders, the survey added.
"This survey finding reemphasizes how critical cost management remains for employers," notes Richard Kleinert, a principal with Deloitte & Touche's Human Capital Advisory Services practice.
What was the second most-important benefits issue among employers? Exactly half of the respondents cited compliance with HIPAA and other state and local privacy requirements. Surprising, given that in last year's survey, privacy concerns did not even rank among the top five priorities.
Rounding out the top benefits issues for employers are expanding the use of employee self-service technology for communications and/or administration (38 percent), evaluating/implementing/expanding the use of Internet/intranet applications (36 percent), and providing financial/retirement planning tools and information (33 percent).
By far the most-important objective driving benefits program policy and design for 2003 is cost management/reduction (67 percent). Other key objectives include employee attraction and retention (12 percent), compliance and fiduciary issues (10 percent), increased use of technology (7 percent), and administrative requirements/alternatives (3 percent).
Employee-benefits specialists identified retirement and investment issues as three of the top five benefits issues for employees in 2003. Evaluating current investment options (64 percent) was rated the top concern, followed by evaluating current levels of retirement savings (61 percent).
The remaining priorities are identifying additional ways to save for retirement (44 percent), learning more about health risks and how to control them (40 percent), and making greater use of Internet tools to manage financial and security programs (36 percent).
Employee Sentiment Sinks
A monthly index that measures employee sentiment fell sharply in January.
The Employee Outlook Index, a joint venture of The Gallup Organization and UBS that was established in April 2002, declined 6 points to 60 in January, and is now close to its August low of 58 and far below its initial baseline of 72.
In fact, all three segments of what the groups call the Employee Outlook Index also declined.
The Future Company Conditions Index dropped 9 points to 61 in January. The Present Company Conditions Index declined 7 points to 77, while the Job Security Index dropped 2 points to 42.
The key issue, of course, is the direction and magnitude of change.
Each month employees who are surveyed are asked an additional question that changes each time.
In the latest survey, employees were asked whether their company conducts periodic formal performance reviews.
Around 80 percent said their company conducts performance evaluations, while just 18 percent reported their company does not perform reviews. Among this group, 52 percent said they are reviewed annually, 27 percent noted they receive a review every six months, and 13 percent said their performance is reviewed monthly or more frequently.
Nearly two-thirds (63 percent) said their supervisor or employer set specific performance goals for them and/or their team in 2002. Among those who said their employer did not set specific goals, 59 percent set specific performance goals for themselves and 41 percent did not.
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