Position yourself for future growth

As the economy continues to improve, employee loyalty is on the decline. According to the recently released MetLife 9th Annual Study of Employee Benefits Trends, employee loyalty has declined year-over-year and how now reached a three-year low. Yet many employers may be caught unaware by this downward trend. Employer responses show they assume employees feel as loyal today as they did three years ago.

While employers of all sizes saw productivity gains over the past 12 months, proving that many were able to “do more with less,” this short-term gain may have come at the expense of employee loyalty. More than one-third (36%) of employees hope to work for a different employer in the next 12 months.

“Worker loyalty has been slowly ebbing over the last several years, and it is important that employers take action to turn the tide around. The short-term gains employers realized from greater productivity appear to be short-lived and now pose bottom-line challenges as key talent considers other employment opportunities that have arisen as a result of the improving economy,” said Anthony Nugent, executive vice president, U.S. Business, MetLife. “There is no doubt that the rebounding economy will bring more opportunities for employees, especially the high performers. A well-architected benefits offering will play an increasingly important role in retaining employees and positioning organizations for future growth.”

Benefits Build Loyalty

The Study found that employers’ top benefits objectives remain the same as last year: 1) controlling health and welfare benefit costs 2) retaining employees and 3) increasing employee productivity. However, declining employee loyalty indicates that, without careful evaluation, steps to achieve one objective may negate efforts in another area.

Helping your clients understand the factors motivating employee loyalty is key. While employers recognize that salary and wages are one of the most important drivers of employee loyalty, there is a significant lack of awareness of how other benefits are also driving loyalty. For example, 59% of surveyed employees said non-medical benefits such as dental, disability and life insurance are extremely important loyalty drivers, while only 37% of surveyed employers say the same.

* Flexibility and Choice: While nearly all workers were impacted by the recession, they were at different ages and stages of life when it hit. This is translating into workers having different priorities and views about what their benefits should include. Voluntary benefits can help address the diverse employee needs and increase the perceived value of the company’s benefits program. Flexibility and choice through voluntary benefits are a way to deliver personalized and customized benefits to drive loyalty while still managing the bottom line. Perhaps surprisingly, employees across the board highly value these benefits – in fact, nearly two-thirds (61%) of employees report that they value them as a way to obtain benefits that meet their personal needs.

* Communications and the Generations: While a third of employers in the Study said that changing employee communications is not a current priority, communicating effectively is related to improved benefits satisfaction. Among employees who said that their employer improved communications over the past year, 65% felt their employer was loyal to them, compared to 33% of employees overall. Leveraging social media and providing benefits information on mobile devices is one strategy for improving communications for younger employees. While employers seem slow in adoption, the Study found that 42% of Gen Y employees and 38% of Gen X employees would be interested in accessing and receiving benefits information through social networking sites. Similar percentages of Gen Y and Gen X employees are interested in having information available through mobile devices.

* Holistic Health/Financial Wellness: Since employee lifestyle choices contribute significantly to health care costs, disability costs and productivity, it is not surprising that the number of employers offering wellness programs continues to grow. Taking a holistic approach to employee health is a way to address financial health as well. The Study shows that employees who say they are not in control of their finances are more likely to report poor health. Employees are clamoring for help – 52% report being interested in receiving financial advice and guidance through the workplace, and this increases to 81% among those who acknowledge that financial concerns have impacted their workplace attendance or productivity.

* Retirement – Employees Need a Map and Directions: When it comes to retirement planning, both now and in the future, employees need both guidance and access to protection. Over 60% of Baby Boomers indicate they are behind in saving for retirement. The Study also found that approximately half of employees who are behind in saving for retirement are interested in their employer automatically enrolling them in a savings program such as 401(k). In addition, employees have expressed an interest in receiving some, or all, of their retirement income in the form of guaranteed income. However, only 15% of employers said they currently offer annuities.

Client Spotlight

Spring is the perfect time of the year to spotlight one of our long-term clients, Insta-Brite Mobile Washing, Inc.

For over 40 years, Insta-Brite Mobile Washing, Inc. has been distinguished as the premier provider of pressure washing and related cleaning services. They are focused on meeting their customers’ needs, including reliability, responsiveness, and consistent quality.  Their clients highly recommend Insta-Brite and all agree on their exceptional service!

They are located in Whitman, Massachusetts, and operate a fleet of 16 mobile units which are operated by professionals dedicated to solving each of their customers’ unique facility, residential, kitchen, and fleet cleaning challenges.

Fidelity Bond (ERISA)

A fidelity bond protects a business against theft of its assets as a result of dishonest actions by employees. It does not cover the assets within a company’s retirement plan because plan assets are not the property of the company, but of the plan beneficiaries.

The Employment Retirement Income Security Act (ERISA) was put into place to safeguard employee retirement plans.  Among other things, it requires the posting of an ERISA fidelity bond to protect the retirement plan from losses caused by fraudulent or dishonest acts by persons who handle the plan.

A plan must be bonded for no less than 10% of the amount of the plan funds.  In most cases, the maximum ERISA bond required is $500,000 per plan, however higher limits are available.  They are issued on a “blanket” basis, so everyone who handles the plan is covered.

Fiduciary Liability Insurance

Fiduciary liability insurance provides coverage for breaches of duty by ERISA plan fiduciaries.  Fiduciaries are those responsible for operating and administering a retirement plan under ERISA.  Some of these duties include:  authority and management over plan assets, making high-quality prudent decisions, documenting and rendering investment advice over the plan’s assets.  Unlike the fidelity bond, fiduciary liability insurance also offers fiduciaries protection of personal assets.  Fiduciaries who breach their duties may be personally liable to make the plan whole for any losses caused by their breach, including lost opportunity and litigation costs.  Fiduciary liability insurance can be purchased as part of an organizations management liability insurance program or on a stand-alone basis.

At Cleary, we will evaluate your business exposures and work with you to develop a comprehensive plan to safeguard your business. Give us a call today at 617-723-0700.

On September 7, 2015, President Obama signed Executive Order 13706, Establishment of Paid Sick Leave for Federal Contractors. The Executive Order requires employers that contract with the Federal Government to provide their workers with up to seven days of paid sick time annually. Regulations regarding the implementation are due from the Secretary of Labor by September 30, 2016. The Order applies to new and replacement for expiring federal contracts, on or after January 1, 2017.

Under the Order, employees may accrue up to 56 hours of sick leave annually. Any unused leave may be carried over, year to year. This sick leave is in addition to wage and benefit obligations under the Service Contract Act (SCA) and the Davis Bacon Act (DBA). If you would like to read more information about the Order please click here.

It is important that all contractors prepare themselves to meet the proposed Executive Order and have their personnel properly trained and ready to deal with SCA and DBA employees.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your fringe-benefit obligations and provides your employees with valuable benefits.

Employers have new challenges to contend with in 2016, resulting from Supreme Court decisions, federal and state legislation, and actions by federal regulatory agencies. There is a real cost for employers who fail to comply with new laws. For example, the most recent Performance Accountability Report for the Equal Employment Opportunity Commission (EEOC), states that victims of discrimination received more than $525 million from private and government workplaces in 2015.

The following are four important issues that should be closely monitored in 2016:

1. Overtime Rule Change: The Department of Labor (DOL) has proposed a rule to expand who is entitled to overtime pay. Once regulations are finalized, it is possible that many overtime-exempt employees will become eligible unless employers raise their salaries—a move that could cost employers billions of dollars.
2. Same-sex Marriage: Since same-sex marriage is now accepted at a federal level, employers are required to provide the same benefits to same-sex couples as they do for opposite-sex couples. Employers must revisit their policies and practices regarding Equal Employment Opportunity (EEO), employee benefits, leave policies, marriage statuses and tax information in order to ensure that they treat all married couples equally.
3. National Labor Relations Board (NLRB) Pursuit of Workplace Policies: The NLRB has been proactive in pursuing employers whose handbook policies can be reasonably interpreted as infringing upon the rights of employees to engage in protected conduct. In doing so, the NLRB has found that certain employer policies, such as those that deal with social media, confidentiality and employee communications, violate employee rights. Because of this development, current workplace policies should be reviewed and drafted carefully to avoid ambiguous language that could be interpreted as interfering with the right to engage in protected, concerted activity.
4. Health Care Reform: Many employers are faced with the challenge of complying with the new annual health care reporting requirements under the Affordable Care Act (ACA). Applicable large employers (ALEs) and non-ALEs with self-insured plans were required to provide Forms 1095 or 1094 to their employees for the first time starting in 2016 for the 2015 tax year. Penalties for not doing so, or for providing inaccurate information, could be substantial. It is important for employers to know which forms to complete and what information to include.

Employers should also keep an eye on any relevant implications that might emerge as a result of the 2016 presidential election—specifically in regards to the Cadillac tax delay. Should the Cadillac tax go into effect in 2020, employers need to be sure that they are either ready to pay the tax or ready to make necessary changes to their health care plans.

At Cleary, we know how important a comprehensive benefits package can be to your continued success. Give us a call today at 617-723-0700 and we will work with you to create a plan that meets your business objectives, takes into account state and federal laws, and capitalizes on incentives and innovative solutions now being offered.