Moving Beyond One-Size Fits All Benefits

The U.S. labor force cares about their benefits to the point where workplace offerings may mean the difference between staying and leaving a job, according to a survey released Wednesday by Nuveen, a TIAA company. 

In a survey of 1,500 full-time U.S. workers, Nuveen, a TIAA company, found that 70% of respondents said they would be willing to switch jobs for better benefits, with younger workers expressing the greatest willingness to move on. 

“Rather than viewing benefit as a cost, organizations can seize a competitive advantage by treating them as a strategic investment,” stated Nuveen in its Benefits 2.0 report.  

Nuveen argued that it is in employers’ best interest to create more inclusive benefits that serve their unique workforce. One-size-fits-all benefits packages are ineffective, according to Nuveen, as benefits priorities vary immensely across demographic groups. The prevalence of one-size-fits-all packages reveals that companies lack significant insight and data into what their workers truly want from company benefits. 

The firm pointed out that workers are often vocal about competitive wages but may be “quietly disgruntled” about the portion of their compensation made up of benefits. Younger workers, for example, tend to show greater demand for education benefits, while older workers show a greater desire for more comprehensive retirement benefits and parental leave.  

Guidance Key 

The types of resources plan sponsors and advisers provide employees to help guide them to the right decisions is also an important part of the benefits picture, according to Brendan McCarthy, head of retirement investing at Nuveen.

“With 40% of Americans at risk of running out of income in retirement, participants need financial education and guidance now more than ever,” McCarthy said in an email response. “With this clear need, more and more recordkeepers and advisory/consultant firms are offering an array of financial wellness and advisory services for participants. As such, the plan sponsor may have options for these services that can be provided to their plan participants. As always, plan sponsors should leverage their plan consultant for guidance in selecting the appropriate offering that best positions their participants for a secure retirement.”

Retirement plan design also plays an important role in terms of how employees are set up initially to save, McCarthy said.

“While new employees were defaulted into the TDF/ QDIA, more likely to have age-appropriate risk exposure, the more tenured/ older employees were left behind, and not given a chance to take advantage of auto features, because plan sponsors assume they’d be resistant to change,” said McCarthy. “Very few participants have the necessary expertise when it comes to retirement investing. That’s why the right plan design, and specifically auto features are so important.”

McCarthy said there is value in conducting a reenrollment to enable inclusion of all workers.

Lack of Communication 

A lack of communication about benefits ultimately results in a lack of utilization, Nuveen found. Two-thirds of workers said there is room for improvement, reporting that organizations do not do enough to communicate and explain how their benefits work. In particular, companies are failing to ensure their workers know about, and can fully access, their benefits, with minority groups most likely to report difficulty in taking advantage of them.  

Nuveen suggested that in-person discussions, seminars, mailers and digital outreach can help ensure that benefit details reach all workers and their families through the most receptive channels.  

Benefits platforms should also be accessible and user-friendly to encourage workers to actually take advantage of the available benefits.  

“The average number of places that a worker needs to go to access benefits is … at least three portals. That is a lot,” stated Caroline McGoldrick, health solutions innovation and integrated solutions leader at Aon, in the report. “It’s not just providing the benefit as much as it is actually making sure that that benefit is able to be accessed by your entire population.” 

Nuveen also recommended that employers ask their workers to provide feedback on their benefits’ offerings, as this is the “most efficient and effective way” to learn if an employer’s offerings are meeting participants’ needs. Employers tend to benchmark benefits against those offered by competitors rather than looking internally at whether their benefits are “meeting the real world needs” of their staff, Nuveen found. 

While surveys, focus groups and open discussion forums tend to be underutilized, Nuveen argued that these are effective strategies for employers to use to get feedback about benefits offerings.  

The Benefits 2.0 survey was fielded in October and November of 2023.