Insights on Employee Benefits
America’s life insurers play a crucial role in helping employers make certain they can provide the benefits employees depend on. As an industry, we make certain employers, especially small and midsize business owners, can deliver key benefits like paid leave, disability insurance, dental insurance and retirement security to their employees.
I consistently hear from employers that the importance of these workplace benefits has never been greater, as they continue to navigate a tight labor market. As noted in the Principal 2023 Business Owner Insights survey of 1,000 small and midsize businesses, three out of four owners say their benefit package improves the ability to recruit qualified employees. Nearly 80% say employee benefits improve retention. And 71% say it improves productivity, up from 42% eight years ago.
The COVID-19 pandemic and its wrenching impact on the economy and the workforce reaffirmed the importance of benefits for employers and employees alike. For example, the survey shows that more business owners than ever are offering benefits for key employees. A record 87% of businesses offer key employee benefits, up from 74% in 2017.
In response to these ongoing challenges, business owners are continuing to increase their benefit packages for all employees. According to the survey, 59% of companies surveyed offered dental insurance in 2023, more than double the number in 2010. The percentage of companies offering vision, life, and disability insurance has grown at similar rates. In addition, 56% of companies now offer paid family and medical leave.
Business owners have shown steady financial improvement despite economic pressures and more growth is expected. The survey also notes that more than 6 in 10 business owners want to offer more and better employee benefits – a proven way to stand out from their competitors.
And employers are increasingly turning to America’s life insurers for these benefits. More than 50 million Americans quit their jobs last year. And the nation’s unemployment rate stands at just 3.7%, nearly matching the lowest rate in the last 50 years. Life insurers specialize in providing innovative business solutions that help employers stay competitive and attract and retain top talent in today’s challenging job market.
In today’s competitive labor market, many employees are seeking more long-term financial security from their employer. By investing in their workforce, companies can help improve retention, productivity, and overall organizational success. As the Principal survey confirmed, America’s employers are answering the call by working with life insurers to offer broader benefit packages for employees.
