“Small Business Employees’ Loyalty at an All-Time Low”

According to the latest MetLife Study of Employee Benefit Trends, the percentage of small business employees who feel a strong sense of loyalty to their employer has dropped to 44% - its lowest point in 3 years. Are only 4 out of 10 of your employees loyal to your business? Rather than shrug this off as a consequence of the bad economy, employers should recognize its potential negative implications. Small businesses are at risk increasing absenteeism, lower productivity, and, voluntary terminations.

For the past three years the recession has understandably absorbed employers’ attention. When revenues and profits were shrinking, employee satisfaction and retention was not a top priority for most employers. With a shrinking economy, alarming news headlines, and few voluntary resignations, it seemed that employees were grateful just to have a job.

That gratitude is probably somewhat true still today but as the economy shows glimmers of improvement and employee loyalty continues to decrease, more than one-third of small business employees said they hoped to be working for a different employer some time in 2011. In the first half of this year, voluntary terminations have outpaced layoffs – a sign that good employees are looking for other opportunities in a strengthening job market. Can your small business thrive if 3 out of 10 of your employees leave this year?

Benefits can be an effective tool for rebuilding loyalty and job satisfaction. In fact, employees who are satisfied with benefits are nearly three times as likely to express a strong sense of loyalty to their employers. An employer is making an investment in benefits; a smart employer needs to know now how best to spend that money.

Benefits dollars are better invested when employees recognize their benefits as valuable. That perception depends on benefits being relevant to an employee’s personal needs, and this requires employers to take a closer look at its workforce. While nearly all workers were affected by the recession, they were at different stages of life when it hit. Different financial and personal aspects of their lives were affected. In other words, different generations of workers have different priorities and views about what their benefits should include. Employers can approach benefits strategies from a generational perspective and do it with greater benefits choice, flexibility and customization, for no more money than they are spending now. If an employer can recognize the key aspects relating to benefits for each generation they can more accurately position those benefits to address specific retention and productivity issues.

When designing benefits programs, small business employers have a unique advantage. Because of their flatter organizational structures, it’s often easier to identify, institute and communicate benefits that appeal to their employees.

Want to know more? See my blog at http://www.rosenfeldeinstein.com/blog/author/kthomas/