WASHINGTON, September 27, 2006 - More than half of U.S. workers are worried
their health care benefit costs will increase and the scope of their
benefits will decrease over the next few years. Also, employers are
underestimating the role that health care and retirement benefits play in
retaining top employees, according to two forthcoming studies by Watson
Wyatt Worldwide, a leading global human capital consulting firm.
The Watson Wyatt WorkUSATM 2006 study found that 69 percent of workers are
concerned their employer will increase out-of-pocket health care costs
through higher deductibles and co-payments over the next three years.
Additionally, 53 percent worry that their employer will reduce the scope of
their health care benefits by limiting providers or items covered in the
next two years. More than 12,000 workers across all job levels and in all
major industries participated in the study.
"No employee wants to pay more for less, especially when it comes to their
own health," said Ilene Gochman, director of organization effectiveness at
Watson Wyatt Worldwide. "As their concerns escalate, employees will
increasingly consider health care benefits when deciding whether to stay
with their current companies. And if the trend continues, these benefits
could become a real differentiator as employers try to hold on to key
talent." According to the WorkUSA survey, two out of three employees said
health care benefits are an important reason to stay with their company.
Meanwhile, Watson Wyatt´s 2006 Strategic Rewards study found that 22
percent of top-performing employees cite health care benefits as one of the
top three reasons they leave a company. Employers, however, underestimate
the importance of health care benefits in keeping employees. None of the
employers surveyed think health care coverage is a key reason
top-performing employees leave.
Concern over retirement benefits, too
The WorkUSA study shows that employees are also concerned about retirement
benefits, although to a lesser degree. Forty-three percent of employees
are concerned their company will reduce pension, retirement or retiree
medical benefits in the next three years, while 30 percent of employees
covered by a defined benefit pension plan are concerned their company will
freeze or terminate their plan over the same time. Meanwhile, the
Strategic Rewards study shows that only 2 percent of employers believe that
top performers would consider leaving over retirement benefits, much lower
than the 17 percent of top employees who cited retirement benefits as a
main reason for leaving.
"It´s not surprising that employees are concerned about benefits
reductions, given the changing relationship between employers and
employees," said Laury Sejen, director of strategic rewards at Watson
Wyatt. "Employers can help ease those concerns by explaining the
competitive pressures they face in the marketplace and associated
trade-offs in reward programs. By clearly communicating their total
rewards strategy, management can pave the way to better employee
understanding of their total package and acceptance of any benefit changes
that need to be made."
The Watson Wyatt 2006 WorkUSA and 2006 Strategic Rewards surveys will be
available in October.
About Watson Wyatt Worldwide
Watson Wyatt (NYSE: WW) is the trusted business partner to the world's
leading organizations on people and financial issues. The firm´s global
services include: managing the cost and effectiveness of employee benefit
programs; developing attraction, retention and reward strategies; advising
pension plan sponsors and other institutions on optimal investment
strategies; providing strategic and financial advice to insurance and
financial services companies; and delivering related technology,
outsourcing and data services. Watson Wyatt has 6,000 associates in 30
countries and is located on the Web at www.watsonwyatt.com.
Contact
Ed Emerman, 609/452-5967, eemerman[at]eaglepr.com
Emily Rieger, 703/258-7634, emily.rieger[at]watsonwyatt.com