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SHRM Survey Findings: Employee Benefits in California—Leveraging Benefits to Retain Employees

April 23, 2014

Employee Benefits in California—Leveraging Benefits to Retain Employees ©SHRM 2014 2

• This is part four of a series of SHRM survey findings examining employee benefits in the workplace of California organizations.

• The following topics are included in the six-part series titled Employee Benefits in California:

» Part 1: Wellness initiatives » Part 2: Flexible work arrangements» Part 3: Health care» Part 4: Leveraging benefits to retain employees» Part 5: Leveraging benefits to recruit employees» Part 6: Communicating benefits

Introduction


• For the purpose of this survey, the following definitions were used:

» Highly skilled employees: employees with skills that are critical to the short- and long-term success of their operating unit or the organization.

» High-performing employees: employees who were ranked among the top 10% in their organization’s last performance review.

Definitions


Leveraging Benefits to Retain Employees at All Levels of the Organization

• Do organizations leverage their benefits program to retain employees at all levels of the organization? Only one in five (20%) California organizations reported leveraging their benefits program to retain employees.

• What benefits offerings have been leveraged to retain employees at all levels of the organization? Similar to the overall findings, organizations in California reported that health care (68%) and retirement savings and planning (55%) are the benefits most frequently leveraged to retain employees.

• In the next three to five years, what benefits offerings will increase in importance to help organizations retain all employees? HR professionals in California indicated that professional and career development benefits (67%) and health care (63%) are two of the benefits that would increase in importance with respect to retaining employees.

Key Findings for Retaining Employees at All LevelsCalifornia


Leveraging Benefits to Retain Highly Skilled Employees

• Are organizations leveraging their benefits program to retain highly skilled employees? About one-fifth (21%) of organizations in California reported leveraging their benefits program to retain highly skilled employees.

• What benefits offerings have been leveraged to retain highly skilled employees? Health care (67%), professional and career development benefits (46%), and flexible working benefits (46%) are the benefits most frequently leveraged to retain these employees in California. Compared to the overall findings, many benefits were leveraged less often by organizations in California, with the largest difference of 23 percentage points for retirement savings and planning benefits (36% in California, 59% nationally).

• In the next three to five years, what benefits offerings will increase in importance to help organizations retain highly skilled employees? Organizations indicated that retirement savings and planning benefits (64%) and heath care (64%) will increase in importance to help organizations retain highly skilled employees.

Key Findings for Retaining Highly Skilled Employees California


Leveraging Employee Benefits to Retain High-Performing Employees

• Do organizations leverage their benefits program to retain high-performing employees? Only one in five (20%) organizations reported leveraging their benefits program over the past 12 months to retain high-performing employees.

• What benefits offerings have been leveraged to retain high-performing employees? HR professionals in California reported both health care (69%) and professional and career development benefits (50%) as the benefits they leverage the most to retain high-performing employees. Compared to the overall findings, some benefits were leveraged less often by organizations in California, with the largest difference of 25 percentage points for retirement savings and planning benefits (38% in California, 63% nationally).

• In the next three to five years, what benefits offerings will increase in importance to help organizations retain high-performing employees? Organizations indicated that health care (65%), retirement savings and planning (63%), and professional and career development benefits (60%) are the benefits that will increase the most in importance with respect to retaining high-performing employees.

Key Findings for Retaining High-Performing Employees California


• The use of benefits as a retention tool is not widespread among HR professionals (20% in California, 18% nationally in the past 12 months). However, considering that wage growth has been weak in the post-recession economy, HR professionals cannot always use higher salaries as a draw for keeping talent. Many recruiters now advocate using a “total rewards” approach to retention, and they encourage leveraging an employer’s benefits package as part of that strategy.

• With medical costs on the rise and many workers unprepared financially for retirement, HR professionals should consider leveraging health care benefits as part of their retention strategy. Of those organizations that used benefits as a retention tool, 68% in California and nationally cited health care benefits as part of that strategy. Even with some uncertainty surrounding health care plans in connection with the Patient Protection and Affordable Care Act, HR professionals should view health care benefits, if offered at their employer, as a valuable tool for keeping workers in the fold.

• Many studies have shown that members of the Millennial generation, or those born between 1982 and 2002, place a high value on flexible work schedules and managing their own time. Many organizations (46% in California, 55% nationally) that used benefits for retention of highly-skilled workers cited flexible work benefits as part of that strategy. If this benefit is offered at their employer, HR professionals should highlight this aspect of their overall benefits plans as a tool to keep talented Millennials at their organizations.

What do these findings mean for the HR profession?

Leveraging Benefits to Retain Employees

at All Levels of the Organization



Over the past 12 months, has your organization had difficulty retaining employees at all levels of the organization?

Note: Respondents who answered “not sure” were excluded from this analysis.

Yes

No

28%

72%

26%

74%

Overall (n = 349)California (n = 310)


Over the past 12 months, has your organization leveraged your benefits program to retain employees at all levels of the organization?


Yes

No

20%

80%

18%

82%



Which of the following benefits has your organization leveraged to retain employees at all levels within your organization?

Note: Respondents who answered “not sure” and those whose organizations did not leverage their benefits program to retain employees at all levels within the organization were excluded from this analysis. Percentages do not equal 100% due to multiple response options.

Health care

Retirement savings and planning

Flexible working benefits

Leave benefits

Professional and career development benefits

Family-friendly benefits

Preventive health and wellness

Housing and relocation benefits

68%

55%

45%

40%

37%

27%

27%

18%

68%

57%

43%

37%

40%

38%

27%

15%



Within the next three to five years, what benefits offerings will increase, remain the same or decrease in importance in your organization’s efforts to retain all levels of employees?


Health care





Leave benefits


67%

63%

60%

60%

53%

42%

25%

15%

33%

33%

36%

40%

41%

56%

73%

65%

0%

3%

3%

0%

5%

2%

2%

20%

Increase in importance Remain the same Decrease in importance

Note: n = 46-60. Respondents who answered “not sure” and whose organizations did not leverage their benefits program to retain employees at all levels within the organization were excluded from this analysis. Percentages may not equal 100% due to rounding.

Leveraging Employee Benefits to Retain Highly Skilled

Employees



Over the past 12 months, has your organization had difficulty retaining highly skilled employees?

Yes

No

30%

70%

28%

72%




Over the past 12 months, has your organization had difficulty retaining highly skilled employees?

Note: Only statistically significant differences are shown.

Comparisons by organization staff size

100 to 499 employees (36%) > 1 to 99 employees (14%)


• Organizations with 100 to 499 employees are more likely than organizations with 1 to 99 employees to have had difficulty retaining highly skilled employees over the past 12 months.

Comparisons by organization sector

Publicly owned for-profit (50%) > Privately owned for-profit (28%)

Comparisons by organization sector

• Publicly owned for-profit organizations are more likely than privately owned for-profit organizations to have had difficulty retaining highly skilled employees over the past 12 months.


Over the past 12 months, has your organization leveraged your benefits program to retain highly skilled employees?


Yes

No

21%

79%

20%

80%

Overall (n = 335)

California (n = 289)


Which of the following benefits has your organization leveraged to retain highly skilled employees?

Health care



Leave benefits





67%

46%

46%

38%

36%

28%

21%

21%

63%

55%

55%

38%

59%

41%

19%

28%


Note: Respondents who answered “not sure” and whose organizations did not leverage their benefits program to retain highly skilled employees were excluded from this analysis. Percentages do not equal 100% due to multiple response options.


Within the next three to five years, what benefits offerings will increase, remain the same or decrease in importance in your organization’s efforts to retain highly skilled employees?

Health care






Leave benefits


64%

64%

54%

48%

46%

38%

29%

16%

34%

36%

45%

48%

51%

57%

67%

67%

2%

0%

2%

3%

4%

5%

3%

18%


Note: n = 51-59. Respondents who answered “not sure” and whose organizations did not leverage their benefits program to retain highly skilled employees were excluded from this analysis. Percentages may not equal 100% due to rounding.

Leveraging Employee Benefits to Retain High-Performing

Employees



Over the past 12 months, has your organization had difficulty retaining high-performing employees?


Yes

No

31%

69%

26%

74%

Overall (n = 350)



Over the past 12 months, has your organization had difficulty retaining high-performing employees?

Note: Only statistically significant differences are shown.


500 to 2,499 employees (38%) > 1 to 99 employees (15%)


• Organizations with 500 to 2,499 employees are more likely than organizations with 1 to 99 employees to have had difficulty retaining high-performing employees over the past 12 months.


Over the past 12 months, has your organization leveraged your benefits program to retain high-performing employees?


Yes

No

20%

80%

19%

81%

Overall (n = 336)



Which of the following benefits has your organization leveraged to retain high-performing employees?

Health care


Leave benefits






69%

50%

38%

38%

36%

22%

22%

17%

63%

49%

38%

63%

57%

22%

27%

37%


Note: Respondents who answered “not sure” and whose organizations did not leverage their benefits program to retain high-performing employees were excluded from this analysis. Percentages do not equal 100% due to multiple response options.


Within the next three to five years, what benefits offerings will increase or decrease in importance in your organization’s efforts to retain high-performing employees?

Health care






Leave benefits


65%

63%

60%

51%

47%

39%

27%

15%

31%

35%

40%

43%

51%

61%

71%

70%

4%

2%

0%

6%

2%

0%

2%

15%


Note: n = 45-61. Respondents who answered “not sure” and whose organizations did not leverage their benefits program to retain high-performing employees were excluded from this analysis.

Demographics



1 to 99 employees

100 to 499 employees

500 to 2,499 employees

2,500 to 24,999 employees

25,000 or more employees

31%

36%

18%

10%

5%

Demographics: Organization Staff Size

n = 310


Privately owned for-profit

Nonprofit organization

Publicly owned for-profit

Government sector

Other

60%

19%

13%

7%

2%

Demographics: Organization Sector

Note: n = 322. Percentages do not equal 100% due to rounding.


PercentageProfessional, scientific and technical services 24%Health care and social assistance 13%Manufacturing 12%Finance and insurance 10%Government agencies 8%Educational services 8%Transportation and warehousing 7%Retail trade 7%Whole trade 6%Real estate and rental and leasing 5%Accommodation and food services 4%Administrative and support and waste management and remediation services 4%Construction 4%Information 4%Utilities 4%Religious, grantmaking, civic, professional and similar organizations 3%Mining 2%Arts, entertainment and recreation 2%Repair and maintenance 2%Agriculture, forestry, fishing and hunting 2%Personal and laundry services 1%Other 9%

Demographics: Organization Industry

Note: n = 328. Percentages do not equal 100% due to multiple response options.


Demographics: Other

U.S.-based operations only 79%

Multinational operations 21%

Single-unit organization: An organization in which the location and the organization are one and the same.

30%

Multi-unit organization: An organization that has more than one location.

70%

Multi-unit headquarters determines HR policies and practices.

59%

Each work location determines HR policies and practices.

5%

A combination of both the work location and the multi-unit headquarters determines HR policies and practices.

37%

Is your organization a single-unit organization or a multi-unit organization?

For multi-unit organizations, are HR policies and practices determined by the multi-unit headquarters, by each work location or by both?

Does your organization have U.S.-based operations (business units) only, or does it operate multinationally?

n = 324

n = 325


Corporate (company-wide) 78%

Business unit/division 15%

Facility/location 16%


What is the HR department/function for which you responded throughout this survey?


SHRM Survey Findings: Employee Benefits in California—Leveraging Benefits to Recruit Employees

• Response rate = 13%

• 373 HR professional respondents in California organizations from a randomly selected sample of SHRM’s membership participated in this survey

• Margin of error +/- 5%

• Survey fielded May 3 - June 7, 2013

Survey Methodology


• SHRM Research Findings: State of Employee Benefits in the Workplace—Leveraging Benefits to Retain Employees

• SHRM Research Findings: Employee Benefits Landscape in California

• California Resources Page

• Benefits Underused to Recruit, Retain, SHRM Finds

• Retention Resource Page

• Staffing Management Resource Page

Additional SHRM Resources

http://www.shrm.org/research/surveyfindings/articles/pages/2013stateofbenefits-benefitstoretain.aspx




http://www.shrm.org/Research/SurveyFindings/Articles/Pages/SHRM-California-Employee-Benefits.aspx

http://www.shrm.org/Research/SurveyFindings/Articles/Pages/SHRM-California-Employee-Benefits.aspx

http://www.shrm.org/hrdisciplines/pages/california.aspx

http://www.shrm.org/hrdisciplines/benefits/articles/pages/benefits-recruit-retain.aspx

http://www.shrm.org/hrdisciplines/benefits/articles/pages/benefits-recruit-retain.aspx

http://www.shrm.org/hrdisciplines/staffingmanagement/Pages/Retention.aspx

http://www.shrm.org/hrdisciplines/staffingmanagement/Pages/default.aspx

About SHRM Research

• For more survey/poll findings, visit www.shrm.org/surveys

• For more information about SHRM’s Customized Research Services, visit www.shrm.org/customizedresearch

• Follow us on Twitter @SHRM_Research

Project leaders:Christina Lee, researcher, SHRM Research Yan Dong, SHRM Research

Project contributors:Alexander Alonso, Ph.D., SPHR, vice president, SHRM ResearchEvren Esen, director, Survey Research Center, SHRM Research

Copy editor:Katya Scanlan, SHRM Knowledge Center

32Employee Benefits in California—Leveraging Benefits to Retain Employees ©SHRM 2014

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About SHRM

Founded in 1948, the Society for Human Resource Management (SHRM) is the world’s largest HR membership organization devoted to human resource management. Representing more than 275,000 members in over 160 countries, the Society is the leading provider of resources to serve the needs of HR professionals and advance the professional practice of human resource management. SHRM has more than 575 affiliated chapters within the United States and subsidiary offices in China, India and United Arab Emirates. Visit us at shrm.org.

33Employee Benefits in California—Leveraging Benefits to Retain Employees ©SHRM 2014

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