Workers estimate that their benefits represent 40 percent of their total compensation, when in fact data show that benefits actually average about 32 percent of a total compensation package. (Image: Shutterstock)
In case you needed more evidence, a new survey underscores the importance of benefits in recruiting and retaining employees and suggests that there's room for improvement in helping employees fully take advantage of their benefits package.
The survey, conducted by The Harris Poll for the American Institute of CPAs (AICPA), found 80 percent of respondents would choose a job with benefits over an identical job with 30 percent more salary but no benefits.
“A robust benefits package is often a large chunk of total compensation, but it's the employees' job to make sure they're taking advantage of it to improve their financial positions and quality of life,” said Greg Anton, CPA, chairman of the AICPA's National CPA Financial Literacy Commission. “Beyond the dollar value of having good benefits, employees gain peace of mind knowing that if they can take a vacation without losing a week's pay or if they need to see a doctor, they won't be responsible for the entire cost.”
|Finding the true value of benefits
The AICPA report suggests that workers overestimate the value of their current benefits package. The survey found that respondents estimated that their benefits represent 40 percent of their total compensation, when in fact Bureau of Labor Statistics data show that benefits actually average about 32 percent of a total compensation package.
Another interesting finding is that although employees are confident they understand the benefits available to them (88) percent, only 28 percent are very confident they are using their benefits to the fullest potential.
“Despite overestimating the value of their benefits as part of their total compensation, it is concerning that Americans are not taking full advantage of them,” said Anton. “Imagine how employees would react if they were not 100 percent confident they could get to all the money in their paycheck. Leaving benefits underutilized should be treated the same way. Americans need to take time to truly understand their benefits and make sure they're not leaving any money on the table.”
|Health plans, 401ks remain most popular benefits
The survey asked workers which three employee benefits would best help them reach their financial goals, and both health insurance and 401k retirement plans were listed as a top three benefit by 56 percent of respondents. Just over 30 percent included paid time off or pension plan as a top-three benefit. Twenty-one percent listed flexible working hours, and 15 percent said the ability to work remotely was a top benefit.
In addition, student loan forgiveness (15 percent) and tuition reimbursement (11 percent) were also mentioned as important benefits, along with additional skills training (14 percent). Paid parental leave was listed as a top benefit by 7 percent of respondents.
|Younger workers more likely to be entrepreneurial
A majority of people surveyed said the freedom of being their own boss would be worth more than the job security that comes with working for an employer. However, it's probably not surprising that the older a worker gets, the less they are willing to tackle that challenge.
In the survey, Millennials were the most confident about starting their own business, at 80 percent. Sixty percent of Generation X respondents found the idea attractive; only 40 percent of Baby Boomers did. When asked if they planed to start or continue their own business in the next year, 23 percent of Millennials said yes, 18 percent of Generation X responded affirmatively, and 10 percent of Boomers were ready to take the leap.
Different generations have different opinions on which workplace benefits will help them reach their financial goals.
The AICPA report quoted Neal Stern, CPA, as saying that although many find the idea of being your own boss appealing, there are some downsides to consider: “Being your own boss means looking only to yourself for the income you'll need to meet your obligations and save for your goals,” he said. He added that this means asking some tough questions. “Do you have enough set aside to cover your expenses during a potentially lean start-up period and weather the ups-and-downs that new businesses often face? And, do you have a 'Plan B' in the event that your expectations aren't realized within a reasonable time frame?”
The research by AICPA also showed that younger workers see the possibility of several employers in their future: on average, they predicted they would have 4.5 employers over their career. The study said younger workers tend to see themselves as having many options when it comes to future employment. This suggests that competitive benefits packages will continue to be a key to attracting and retaining workers.
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