According to a Mercer survey of 10,400 employees in ten key markets (US, UK, Ireland, Canada, Brazil, Spain, France, Italy, China and Hong Kong) during last July and August 2012, given the choice, workers worldwide want benefits that offer immediate gratification rather than those that potentially deliver value over the long term. The survey sought to measure the perceived value employees place on various employer- and employee-paid benefits. An extra week of paid time off was among the top-three employee choices in seven of the ten markets surveyed. Employees selected a salary increase over all benefit offerings listed in the survey (except in Canada where paid time off edged out a salary increase.)
These preferences underscore the challenge faced by employers worldwide in empowering employees to make more of their own benefit choices while encouraging them to strike the right balance between the shorter and longer-term value of the benefits they choose.
The Making Smart Benefit Choices survey also asked employees to rank the kind of benefits they are willing to pay for themselves, often referred to as “voluntary” or “flexible” benefits. These benefits are usually paid for by the employee out of pocket or through an employer’s flexible benefits plan. These company-run programs can offer employees discounted prices compared to the open market.
Benefits that provide additional insurance are the most popular in US, UK, Ireland, and Canada, while in Brazil and China, offerings like additional retirement/savings rank highly. In some markets where the state is the primary provider of health care (e.g., Ireland, Spain, Italy) supplemental private medical insurance is popular as a voluntary or flexible benefit.
With concern about successful retirement a global issue, the survey also included questions on perceived retirement readiness among employees. In most markets, the percentage of respondents who feel very or fairly concerned about retirement ranged between two-thirds and three-quarters. This concern is well founded; in markets outside of Asia approximately 75% are saving less than 10% of their total compensation towards retirement.
In the US market, Making Smart Benefit Choices revealed several important insights, particularly in the area of voluntary benefits. The top three benefits US employees were willing to pay for are disability, life and auto insurance. Among the list of other possible voluntary benefits, accident and hospital indemnity insurance are also relatively popular, while legal assistance and identity theft insurance rank near the bottom (see Figure 4).
Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and performance of their most vital asset – their people. Mercer’s 20,000 employees are based in more than 40 countries.