There is a clear disconnect between what benefits are being offered to employees and what particular benefits workers actually prefer, according to a new survey from Franklin Templeton.
The good news for retirement plan advisors? Workers really value 401(k) matches—second only to increased pay.
“Understanding employee preferences and effectively communicating available resources is paramount for organizations aiming to attract and retain top talent.”
Franklin Templeton’s Jacque Reardon
In its fourth year, Franklin Templeton’s Voice of the American Workplace Survey found employees prioritize increased pay (56%) and 401(k) matches (42%) the most, while employers assume preferences for improved health and dental insurance, health savings accounts (HSAs), and charitable contributions.
Employee expectations, particularly regarding compensation, are on the rise, but the survey also found 80% of employers are struggling to meet demands for increased compensation. That’s another disconnect, as 70% of American workers indicate their salary is not keeping up with inflation.
This year’s survey examined both employer and employee perspectives, emphasizing the crucial need for aligning expectations with available resources.
“Managing heightened employee expectations is one of the biggest challenges facing employers today,” said Jacque Reardon, Head of Client Marketing for Retirement, Insurance, 529 and Wealth Management for Franklin Templeton. “Understanding employee preferences and effectively communicating available resources is paramount for organizations aiming to attract and retain top talent. Employers must articulate the holistic value of total compensation and benefit packages to ensure alignment with employee needs and preferences.”
More disconnects
The new survey found 49% of employers are providing access to resources like financial wellness platforms, yet only 28% of employees are leveraging them, and 72% of employees admit that they struggle to understand the benefits available to them.
Nearly a third (29%) admit they struggle to understand the monetary value of employer-provided benefits. The American worker has also expressed interest in more personalized offerings in their 401(k) and overall benefit packages—84% and 82%, respectively. Meanwhile, 90% of employees increasingly seek work-life balance to enhance their wellbeing.
“To address these challenges, employers must prioritize strategies focused on employee retention and satisfaction, which may entail offering competitive compensation packages and fostering positive work environments that prioritize employee wellbeing and work-life balance,” added Reardon. “By aligning with employee expectations and prioritizing their satisfaction, employers can mitigate turnover and cultivate a more engaged and productive workforce.”
The survey also found that 91% of employers experienced turnover rates exceeding 10% in 2023.
The pursuit of financial independence
The survey also sheds light on the financial stress experienced by American workers, with financial independence emerging as a major concern. Workers express heightened anxiety regarding income, retirement savings, and healthcare costs, which surpass concerns about mental and physical health.
“…for the first time this year we see that financial health far outweighs concerns in other areas.”
Jacque Reardon
Notably, nearly two-thirds (61%) of workers feel that their financial independence is jeopardized by the current economic environment, as they struggle to achieve important financial milestones. Other key concerns are recurring expenses (66%), healthcare costs (64%) and student loan debt (47%), and nearly half (47%) say their ability to retire feels in jeopardy due to the current economic situation.
“Each year, we’ve asked questions across three areas of health: financial health, mental health, and physical health,” Reardon said. “Generally, importance and concern are even across all three areas, but for the first time this year we see that financial health far outweighs concerns in other areas. In fact, there is a 15% increase year-over-year in concern over financial health.”
The survey was conducted by The Harris Poll on behalf of Franklin Templeton and the Retirement Innovation Initiative (RII), which launched in January 2020 and brings together industry experts to help improve the future of retirement in the U.S.
Check out the full survey here.
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