SMALL BUSINESS TRENDS
Insights from MetLife’s 13th Annual U.S. Employee Benefit Trends Study
The Benefits
of Employee Benefits:
Powerful Tools for Small Business Success
Small Business Growth:
Where Employee Benefits Fit
The importance of U.S. small businesses continues to grow along with the rate at which they’re being
created. According to the U.S. Small Business Administration, there are 28 million small businesses — a number
that’s increased 49 percent since 1982. What’s more, small businesses provide 55 percent of all jobs and have
accounted for 66 percent of all new net jobs since the 1970s,1 cementing the segment as a major contributor
to economic growth.
Their importance to our economy is set against a need for small businesses to navigate an increasingly complex
marketplace — from evolving economic conditions and regulatory environment, to building consumer demand
and attracting talent. As business owners balance these various challenges, one area they can address to improve
business performance is employee benefit programs.
MetLife’s 13th Annual U.S. Employee Benefit Trends Study surveyed employers and employees at U.S. small
businesses (2-99 employees) about workplace benefit priorities, as well as their attitudes, needs, satisfaction
and overall behaviors. What’s clear from the research is that employers are squarely focused on employee retention
and productivity, and both employers and employees see the value of benefits.
This report examines what’s on the minds of small business owners and employees when it comes to benefits —
from cost, to expanded options, to education and many topics in between. The good news? Employers who are
attuned to the needs of their employees and make the most out of their benefit programs will be in a position
to attract and retain a talented workforce, the foundation of continued business success.
Seeing the value of benefits
80%
72%
of employers say retaining employees is extremely important
of employers say increasing employee productivity is extremely important
81%
82%
of employees agree having insurance/benefits gives them peace of mind for the unexpected
of employers feel the same
78%
79%
of employees agree having insurance/benefits is a huge but necessary expense
of employers feel the same
1
Small Business Trends. Small Business, Big impact! Retrieved from https://www.sba.gov/content/small-business-trends-impact
2
Primary Benefit Decision Drivers:
Cost Remains at the Top
Cost is top of mind for small business owners every day — and factors into every decision. Employee benefits are no
exception. Small business owners recognize the strategic value of benefits, but cost remains a key component in their
decisions. Seventy-three percent of employers strongly agree that cost is the most important factor in the selection of
workplace benefits. Not surprisingly, 57 percent say they plan to maintain their benefits, compared to only 28 percent
who plan to increase their benefit budgets.
Cost is king when it comes to benefits
49%
What employees
As they explore options and make decisions, small business owners rely on benefits brokers and financial advisers
for recommendations regarding costs, benefit solutions — which may include cost-saving alternatives — and
advice on requirements set forth by the Affordable Care Act (ACA).
Though the ACA continues to change the benefit landscape for businesses large and small alike, 63 percent
of small business employers are strongly committed to offering health insurance to their employees for the
foreseeable future and roughly one-third of small business employers and employees strongly agree that there’s
value to having more health plans to choose from as a result of the ACA. Many small business owners are still
taking a wait-and-see approach when it comes to implementing alternative health care options (see graphic
below) — perhaps missing additional opportunities to both save on costs and provide more choice for employees.
Low cost considerations for employers in the wake of the ACA
13%
Defined contribution health plans
Consumer-driven health plans
12%
Switch coverage to a Private Health
Insurance Exchange
12%
Direct employees to State/Federal
Exchanges
12%
Switch coverage to an employer-driven
Accountable Care Organization
8%
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Value Add:
Making the Most Out of Benefits Programs
Ongoing cost concerns, flat budgets and the ACA should have employers evaluating their benefit offerings, but many
seem content with their decisions. Sixty percent of small business employers feel confident in their decisions made on
benefit options and 53 percent are proud of the benefit packages they offer. In fact, only 11 percent of small business
employers wish they could go back and change their decision about benefit offerings.
What types of benefit options do employees want most? And how can providing these options create value for
small businesses? Voluntary benefits — benefits that employees choose and pay for on their own — as well as expanded
coverage options and mobile benefit tools are highly sought after by employees and can create added levels of satisfaction
and appreciation.
1. Voluntary Benefit Choices Deliver on Personalization
Small business employees increasingly want more choice when it comes to selecting benefits, even if it means
money coming out of their own pockets. Fifty-five percent are interested in having access to a wide array of
voluntary benefits that they can choose and pay for on their own. In addition, 57 percent of small business
employees say they are willing to bear more of the costs of their benefits, rather than losing them, and 56 percent
say that they are willing to shoulder more of the cost in order to have a choice of benefits.
Employees willing to pay for choice
55%
57%
of employees are
interested in having access
to a wide array of voluntary
benefits that they can choose
1
of employees are
willing to bear more
of the costs of their
benefits rather than
S tates Adjust to Life After Federal Stimulus Aid. (2014, April 21).
Retrieved from http://www.pewtrusts.org/en/multimedia/data-visualizations/2014/fiscal-50#ind2
http://www.pewtrusts.org/en/research-and-analysis/analysis/2014/04/21/states-adjust-to-life-after-federal-stimulus-aid
4
56%
of employees
are willing to shoulder
more of the cost in
order to have a choice
Employees are looking for a range of protection, which can help them manage the impact of high deductible
health plans. For small business owners, there’s opportunity to strategically expand their offerings and reap the
benefits in the form of increased employee satisfaction and loyalty. Fifty-seven percent of employees feel that
having a wide range of benefits to select from would make them feel more loyal.
The importance of voluntary benefits
EMPLOYEE MUST-HAVE
EMPLOYER OFFERING
Accident insurance
Critical illness insurance
Hospital indemnity insurance
Cancer insurance
AD&D insurance
Long-term disability insurance
Short-term disability insurance
Vision insurance
2. Looking Ahead: Expanded Employee Interest
Along with more choices in terms of benefit products, small business employees are also interested in extended
coverage. And, many of these interests — like a single carrier for multiple benefits — offer efficiency and potential
cost-saving benefits for small business employers at the same time.
Understanding employee interest
EMPLOYEE INTEREST
47%
EMPLOYER LIKELIHOOD TO OFFER
43%
40%
36%
34%
28%
16%
19%
18%
12%
9%
Portable
benefits
Dependent
coverage
Domestic partner
coverage
Tailored plan
options
8%
Extended family
coverage
Single carrier for
multiple benefits
While traditional benefits will always be top of mind for employers, brokers help their small business clients by
having their finger on the pulse of employee wants and needs. Eight in ten brokers (83 percent) say they always or
often recommend tailoring benefits to meet the diverse needs of employees and 51 percent of brokers recommend
dependent coverage, while roughly the same percent recommend a single carrier for multiple benefits (49 percent)
and portable benefits (44 percent).
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3. Employee Confidence: Making the Most Out of More Choices
The willingness of small business employees to pay more money for voluntary benefits means it’s even more
important for them to understand the value of the benefit options available. They are hungry for choices and
decision-making support, and employers who are able to tap into solutions can see tangible payoffs in employee
satisfaction and retention.
Currently, only 48 percent of small business employees are confident they made the right decisions at their last
annual enrollment, 37 percent feel that their employer’s benefit communications effectively educated them on their
options and 34 percent say that the benefit information they received was easy to understand. Addressing these
communication needs will help small business employers equip employees to make the right decisions.
Regarding benefit communication, desire for mobile communications among employees is on the rise (see graphic
below), but the importance of in-person meetings cannot be understated. Fifty-three percent of employees say oneon-one in-person meetings were effective and 60 percent of employers feel the same. Small business employers should
continue to take advantage of their company size to facilitate these in-person benefit discussions with employees.
The mobile movement: Interest in apps for benefit functions
EMPLOYEE INTEREST
EMPLOYER LIKELIHOOD TO OFFER
Mobile app for managing benefits
30%
10%
Mobile app for enrollment information
26%
11%
Mobile app for learning and education
25%
10%
Mobile app for enrollment
24%
10%
6
Benefits and the Loyalty Effect
While cost considerations are always present, successful small business employers are seeing the return on their investment
in benefits through employee loyalty and retention. Sixty-seven percent of employers agree that the potential to boost
employee retention and loyalty is a factor when making benefit decisions and choices, followed by the potential to increase
employee motivation and productivity at 62 percent. And small business employees acknowledge that certain aspects
of benefit programs make them feel more loyal.
Sixty-five percent of employees agree that having benefits tailored to their needs would increase loyalty. Among different
generations, Gen Y employees most strongly agree with this statement, compared to Gen X, younger boomers and older
boomers. So while it’s clear that these options are preferred across the entire workforce, employers that want to retain
the younger generation should focus on choice.
Benefits can also play a huge role in alleviating financial pressures on employees, which can create more loyalty.
Forty percent of small business employees don’t currently feel in control of their finances and 1 in 3 say they live
paycheck to paycheck.
By generation: A financial snapshot
MILLENNIALS
GEN X
YOUNG
BOOMERS
OLDER
BOOMERS
66%
64%
Not in control of finances
53%
40%
40%
38%
Live paycheck-to-paycheck
27%
14%
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Leveraging Benefits for Long-Term Growth and Success
The goal for any small business is long-term growth and success — comprehensive employee benefit offerings can help
business owners achieve both. As benefits continue to play an important role in the small business work environment,
employers have the opportunity to make more out of their benefit programs by tapping into what their employees want
and need. Understanding employee pain points can help small business employers increase employee satisfaction, loyalty,
attraction and retention, by offering benefit packages tailored to those wants and needs. Tapping into the expertise of their
benefits adviser and insurance carrier, small business employers can easily explore benefit options and select those that are
right for them, their business and their employees.
For more insights from MetLife’s annual U.S. Employee Benefit Trends Study, visit BenefitTrends.MetLife.com
TO LEARN MORE ABOUT OUR SMALL BUSINESS SOLUTONS
visit metlife.com/mysmallbusiness
About the Study
MetLife’s 13th Annual U.S. Employee Benefit Trends Study was conducted during November 2014 through
January 2015, and consisted of three distinct studies fielded by ORC International, one of the world’s largest
research companies. The employer survey comprised 2,595 interviews with benefits decision makers at
companies with at least two employees. The employee survey comprised 2,463 interviews with full-time
employees ages 21 and over, at companies with at least two employees.
About ORC International
ORC International is a leader in the art of business intelligence. Their teams are passionate about discovering
what engages people around the world. By combining quality data, smart synthesis and best in class digital
platforms, ORC delivers insight that powers the growth and drives the future of their clients’ businesses.
To learn more about ORC International, their website, www.orcinternational.com.
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