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HomeNewsEmployee Turnover and Compensation Expectations are Key Challenges Facing Employers, Franklin Templeton’s...

Employee Turnover and Compensation Expectations are Key Challenges Facing Employers, Franklin Templeton’s Voice of the American Workplace Survey Finds

In annual survey spanning three areas of health—financial, mental and physical—American workers express a 15 percent year-over-year increase in concerns over financial health

Survey reveals disconnect between employers prioritizing health and dental insurance, HSAs and charitable contributions, while employees prioritize increased pay and 401(k) matches

The American workplace landscape is undergoing profound shifts according to the latest survey from Franklin Templeton. In its fourth year, Franklin Templeton’s Voice of the American Workplace Survey found that 91 percent of employers experienced turnover rates exceeding 10 percent in 2023. Furthermore, employee expectations, particularly regarding compensation, are on the rise, with 80 percent of employers struggling to meet demands for increased compensation. 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.”

Aligning Employer Offerings with Employee Needs

While employers strive to address employee needs, there is a clear disconnect between offered benefits and employee preferences. The survey reveals that employees prioritize increased pay (56 percent) and 401(k) matches (42 percent), while employers assume preferences for improved health and dental insurance, health savings accounts (HSAs), and charitable contributions. Meanwhile, 70 percent of American workers indicate their salary is not keeping up with inflation.

In addition, 49 percent of employers surveyed are providing access to resources like financial wellness platforms, yet only 28 percent of employees are leveraging them, and 72 percent 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 percent and 82 percent, respectively. Meanwhile, 90 percent 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.”

Financial Stress and 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.

Notably, nearly two-thirds (61 percent) 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 percent) and student loan debt (47 percent), and nearly half (47 percent) 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,” said Reardon. “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 percent increase year-over-year in concern over financial health.”