NEW YORK—Although tentative, the economic outlook for small businesses shows some     signs of improvement. But according to MetLife’s 9th Annual Study of     Employee Benefits Trends, small businesses (those with fewer than 500     employees) may now face a new challenge, employee retention, as there     has been a significant decline in employee loyalty. In November 2008,      62% of small business employees reported feeling a very strong sense of     loyalty toward their employer, but in 2010 that number dropped to only     44%. In fact, 34% of small business employees surveyed would like to     work for a different employer. In contrast, small business employers’      perceptions of that loyalty remained essentially unchanged over the last     few years with 54% currently believing that their employees feel a     strong sense of loyalty to the company.

Benefits Status Quo

During the down economy many small businesses held the line on benefits.      The study found that, overall, the percentage of small businesses     offering certain benefits remained nearly the same in 2010 as in 2007.      For example:

However, the status quo may not be sufficient in a recovering economy.      Approximately 50% of surveyed small business employees who are not very     satisfied with their benefits hope to be working for a different     employer. On the other hand, 72% of surveyed small business employees     who are very satisfied with their benefits feel a very strong sense of     loyalty to their employer.

“The MetLife study is a reality check for smaller employers who may     still be viewing their workforce through rose-colored glasses. Economic     recovery will not only present opportunities for employers but also for     top performers. One area small businesses may overlook is whether their     benefits programs are designed as strategically as they could be. It is     not necessarily about spending more, but optimizing offerings to attain     three top objectives: employee retention, increased productivity, and     cost control,” said Jeffrey Tulloch, vice president, U.S. Business,      MetLife.

Voluntary benefits are another option for small business employers     seeking a cost-effective way to increase their benefits offerings. The     study shows that approximately half of employees find it important to     have benefits like life, dental, and disability insurance available to     them through the workplace even if they have to pay all of the cost     themselves.

Improving Employees Financial Health

While the grants awarded under The Patient Protection and Affordable     Care Act (PPACA) may help stimulate small businesses to offer wellness     programs, a holistic approach to employee health should also include     financial health. Financial concerns can also take a toll on     productivity and contribute to stress-related ailments. The study,      found, however, that while the majority (77%) of small business     employers do not plan to offer financial/retirement planning seminars     within the next 18 months, 75% of employees who admitted their     productivity was impacted by personal monetary issues would be     interested in learning how to address issues that cause financial stress.

Workplace financial advice and guidance can be particularly important in     addressing the challenges that Baby Boomers (born 1946-1964) in the     employ of small businesses are dealing with in planning for a secure     retirement. Few of this demographic (16%) said that they are on track to     achieve or have already achieved the right retirement outcome. Nearly     two-thirds (62%), of Baby Boomers working for small businesses are very     concerned about outliving their savings, and 59% are very concerned     about having to work either full- or part-time in retirement. Only 29%      of this demographic feel very confident in managing their money in a     401(k) or 403(b) plan and yet these plans are more common at small     businesses than traditional pension plans. For example, 19% of small     business employers say they offer a defined benefit pension plan, but     61% offer a 401(k) plan.

“It can be a win-win situation when employers utilize and promote     programs that can help employees become more financially secure.      Employees can mitigate some of their financial stresses and obtain     greater peace of mind, and employers can reap the benefits of a more     productive and loyal workforce,” said Dr. Ronald S. Leopold, vice     president and national medical director, U.S. Business, MetLife. “There     is a business value to both a physically and financially healthy     employee.”

The findings from the MetLife study are summarized in Small Business     Benefits: Address Growing Flight Risk with Benefits-Based Strategies available at www.metlife.com/sbtrends along with a wealth of other related benefits resources.

Methodology

The 9th Annual MetLife Study of Employee Benefits Trends was conducted     during the fourth quarter of 2010 and consisted of two distinct studies     fielded by GfK Custom Research North America. The employer survey     comprised 1,508 interviews with benefits decision-makers at companies     with staff sizes of at least two employees. The employee sample     comprised 1,412 interviews with full-time employees age 21 and over, at     companies with a minimum of two employees. Of the interviews, 953 were     conducted with decision makers at companies with fewer than 500     employees, and 631 interviews were conducted with employees who work for     these smaller businesses.

About GFK

GfK Custom Research North America is part of the GfK Group, one of the     world’s largest and most prestigious market research organizations,      operating in more than 100 countries. Headquartered in New York City,      with 10 offices in the U.S., GfK Custom Research North America provides     full-service market research and consulting services in the areas of     Customer Loyalty, Product Development, Brand & Communications, Channels,      Thought Leadership, Innovation, and Public Affairs.

About MetLife

MetLife is a subsidiary of MetLife, Inc. (NYSE: MET), a leading global     provider of insurance, annuities and employee benefit programs, serving     90 million customers in over 60 countries. Through its subsidiaries and     affiliates, MetLife holds leading market positions in the United States,      Japan, Latin America, Asia Pacific, Europe and the Middle East. For more     information, visit www.metlife.com.