Great Expectations: Aligning on workplace benefits

The fourth edition of Franklin Templeton’s “Voice of the American Workplace” survey included the perspectives of both employers and workers. The 2024 survey found US workers are prioritizing higher compensation and the ability to save more for retirement. At the same time, employers’ perceptions of what workers are seeking has diverged. In this piece, our Jacque Reardon shares findings from the survey and potential implications for employers.

Benefits play a significant role in recruiting and retaining a talented workforce.

By gaining a deeper understanding of employee desires, employers can effectively create loyalty and attract top talent.

Franklin Templeton’s 2024 “Voice of the American Workplace” survey found it is more important than ever for employers to optimize resources and tailor benefits to meet workers’ needs. While compensation and health benefits are important to workers, the survey revealed that what workers are looking for may not be in sync with what employers think.

Bridging the perception gap provides an opportunity for a better alignment of benefits and needs.

Conducted in partnership with The Harris Poll, our fourth annual survey was rebranded as “Voice of the American Workplace” because it now includes the views of both employers and workers.

Benefits matter

Most employers agree benefits are a pivotal tool for attracting top talent, fostering a positive workplace culture and for building employee loyalty.

Employers are facing some challenges, including supporting work-life balance, managing turnover and meeting rising employee expectations.

This survey found that 91% of employers experienced turnover of more than 10% in their workforce, and 57% experienced turnover of more than 20% in 2023. Voluntary terminations (including workers quitting, accounted for half of the turnover). The survey also found employee expectations are on the rise across all areas, with compensation taking the lead. However, 80% of employers said they are struggling to meet this desire for increased compensation.

To attract and retain talent, employers have boosted benefit packages, even if costs appear to be unsustainable. Most employers (70%) stated they recently increased the number or quality of their benefits, and 65% noted their benefits are “quite competitive.”

However, 80% of employers said their organization is struggling with managing the increased cost of providing benefits, and 68% have had to increase their insurance premiums in the last 12 months.

What this means for businesses:  Our takeaway is that employers need to implement strategies that focus on employee retention and satisfaction. This could involve offering competitive compensation packages and creating a positive work environment that values employee well-being and work-life balance. By prioritizing employee satisfaction and addressing their increasing expectations, employers may be able to mitigate turnover and create a more engaged and productive workforce.

Financial stress is top concern among workers

Workers are under a lot of financial stress, and financial independence is a major concern. Workers in our survey cited their top financial concerns as income or maintaining their standard of living (42%), retirement savings (40%) and healthcare costs (36%).

Achieving financial independence has become a bigger focus in recent years, along with paying off debt.

For the first time in our survey’s history, financial health has surpassed mental and physical health in terms of importance, growing by 15% year-over-year in the latest survey.

Nearly two thirds (61%) of workers said, “My financial independence is in jeopardy due to the current economic situation” as they lengthen their time horizons to achieve financial milestones. Important goals feel out of reach. Key concerns like expenses (66%), healthcare costs (64%), are making financial milestones challenging and (86%) of workers say they have at least one thing getting in the way of their ability to retire.

Retirement anxiety prevails among workers—concerns about running out of money are prompting a determination to work as long as possible to bridge the financial gap. More than half (55%) of respondents said they plan to work in retirement. Retirement concerns are dominated by healthcare costs, surpassing expenses like housing and food, as 58% say that they are more concerned about healthcare than housing in retirement.

What this means for businesses: The data show that workers are increasingly concerned about their financial health. This is likely due to the increasing cost of living, as well as the uncertainty of the job market. We think employers need to be aware of this trend and take steps to address the concerns of their workers. One way to do this is to provide financial resources to help workers manage their finances, such as educational opportunities on financial topics and access to financial advice.

Diverging views

Employee expectations continue to rise across the benefits spectrum, and compensation remains a priority. Most workers in our survey (70%) reported their salary is not keeping up with inflation. They are the least satisfied with their compensation package. Their recommendation for employers: Prioritize compensation, including pay and a 401(k) match, and work-life balance for enhanced retention.

If given the option for an enhanced benefit, workers expressed a clear preference for increased pay and 401(k) match, while employers assume they would prefer improved health and dental insurance, health savings accounts (HSAs), and charitable contributions.

Regardless of the disconnect, employers are providing access to resources like financial wellness platforms (49%), yet workers are not always leveraging these resources (28%). Workers admit that they struggle to understand the benefits available to them (72%). Nearly one third (29%) admit they struggle to understand the monetary value of employer-provided benefits.

What this means for businesses: Understanding employee preferences is crucial for organizations seeking to attract and retain top talent. Our takeaway is that organizations must work to effectively communicate the resources they make available and focus on articulating the holistic value of total compensation and benefit packages.

Emerging trends

Workers expressed interest in some emerging trends in benefits including:

• Pet insurance
• Loan repayment assistance

Personalized benefits are also becoming a growing trend. In the survey, 84% of workers cited an interest in more personalized offerings in their 401(k) plans and comprehensive benefit packages, including customized benefits that meet individual needs.