Seven in ten full-time workers will switch jobs for better benefits. This startling fact emerges from a recent Economist Impact study, sponsored by Nuveen, which surveyed 1,500 full-time workers at medium- to large-sized U.S. companies. The study exposes critical gaps between what employers offer and what employees need. HR leaders and CFOs should make it essential reading.
Content Guide
The Stakes Are Higher Than Ever
Employer-provided benefits already account for nearly one-third of all compensation, according to the Bureau of Labor Statistics. However, the Economist Impact research reveals a troubling disconnect: only 50% of workers feel confident they can afford their healthcare needs, and just 43% believe they’ll be able to retire at the federal retirement age.
When benefits fall short, productivity suffers. Only six in ten survey respondents reported feeling healthy enough to perform their job duties effectively, directly affecting the bottom line through reduced output, increased absenteeism, and costly turnover.
In other words, getting benefits wrong can have a significant material impact on a company’s financial performance, productivity, and even its reputation.
Younger Workers Expect Better Benefits
The research highlights a generational shift that demands attention. Among Gen Z workers, 79% would leave for better benefits (the highest of any age group). Moreover, 66% of Gen Z respondents said they would switch jobs solely for better education or training benefits.
This aligns with broader industry findings. The 2024 SHRM Employee Benefits Survey confirmed that professional development remains a high priority, with 65% of employers rating it as “very important” or “extremely important.” However, the Economist Impact study found that only 47% of U.S. businesses currently offer tuition assistance, leaving a significant gap between employee expectations and employer offerings.
Targeted Benefits Are the Key to Success
The study’s most actionable finding is that benefit priorities vary dramatically across demographics, and blanket approaches are failing to meet employee needs.
Parents prioritize family-planning and care benefits, with 42% stating that these allow them or their partner to remain employed. Minority workers are 70% more likely than white workers to rank education benefits as a top priority. And while 87% of older workers rank retirement among their top three benefits, only 32% have access to automatic employer retirement contributions.
Smart employers are responding with flexible, tax-advantaged options that cater to diverse priorities.
- For working parents, Dependent Care Assistance Programs (DCAPs) have become vital, enabling them to set aside pre-tax dollars for childcare expenses and making a significant difference in their decision to stay in the workforce or leave. The recent increase in the annual contribution limit to $7,500 (from $5,000 previously) makes these accounts more valuable than ever.
- Health Savings Accounts (HSAs) serve a dual purpose, helping employees manage current healthcare costs while building a tax-free fund for future medical expenses in retirement – a valuable tool, given that only half of workers feel confident about affording their healthcare needs.
- Meanwhile, Lifestyle Spending Accounts (LSAs) offer maximum flexibility, allowing employees to direct employer contributions toward their individual priorities, such as professional development, wellness programs, student loan repayment, or family care.
These account-based benefits enable employers to provide meaningful support without wasting resources on underutilized, one-size-fits-all programs. By tailoring benefits to specific employee segments, organizations can optimize plans to address what each group cares about most.
Effective Communication Is Crucial
Even when employers offer strong benefits, poor communication undermines their investment. Two-thirds of workers surveyed believe their organizations fail to effectively promote, explain, or innovate in how benefits are implemented, leading to underutilization.
Consider that 80% of workers say their company culture doesn’t encourage taking time off, even when paid leave is available. And 70% cite inadequacies in the usefulness of education and training programs.
The Path Forward for Employers
The path forward requires a fundamental mindset shift: viewing benefits as a strategic investment in competitive advantage. Organizations that succeed need to take three key actions:
- Gather meaningful employee feedback through surveys, focus groups, and persona-mapping to understand what different workforce segments truly value.
- Tailor offerings to meet diverse needs rather than relying on one-size-fits-all packages.
- Streamline communication and access through consolidated platforms and multi-modal outreach.
With seven in ten workers willing to leave for better benefits, the reality is that you cannot afford not to invest in a market-leading benefits strategy. In a knowledge-driven economy where an organization’s greatest asset is its people, benefits have become a decisive factor in winning the war for talent.
Transform Your Benefits Strategy Today. At Beneliance, we partner with brokers and employers to design, communicate, and implement benefits programs that attract and retain top talent. Contact us today to learn how we can help you turn your benefits into a true competitive advantage.
