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By Phil Piemonte

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How important are benefits? Ask the big guys

In the debate over private- vs. public-sector benefits, one often hears the claim from those on the federal-employee side that good benefits packages are necessary to recruit and retain the best personnel. Federal human resources officials and labor leaders say it all the time.

So, if it’s so important, why do some lawmakers constantly target those benefits as a source of budget cuts?

Those same lawmakers—those who pursue this benefits-trimming agenda -- more often than not also are big believers in highlighting private-sector models for the changes they advocate for government.

So that should raise the question: What do employers in the private sector actually think about the importance of the benefits they offer employees?

According to the 10th Annual Metlife Study of Employee Benefits Trends ... it sort of depends.

‘Progressive’ or not

The Metlife study identified employers as falling into one of two camps. The first included “Progressives,” which included those employers who see an opportunity for benefits to drive business goals. They tend to be more optimistic about keeping and leveraging benefits, even when things get rough. The second group comprised those employers labeled as “Standards,” which included companies who do not see those opportunities.

So who are these progressives? Are they the small, agile companies? And who are the standards? Stodgy corporations?

Not so much.

First, the study found that more than half of companies overall – 60 percent -- fell into the Progressives camp. They are firms who put more emphasis on leveraging the power of benefits to drive recruitment, retention and productivity.

But what may come as a surprise (at least it did to me) – is that bigger companies tend to be the ones who put more stock in the importance of benefits.

Eighty-one percent of companies with 10,000 employees or more were classified as Progressives, subscribing to the idea that benefits packages help them achieve business goals. Seventy-eight percent of companies with 5,000 employees or more were Progressive employers, as well as 76 percent of those with 500 or more. The percentage of Progressives fell to 49 percent among firms with fewer than 500 employees, and only 46 percent among companies with fewer than 50 employees.

Which private sector?

So -- large private-sector enterprises put a greater emphasis on leveraging benefits to achieve company objectives. And they continue to see benefits as providing them with an opportunity to advance their objectives, as the report notes, even in “the current economic climate.”  Small private enterprises, less so.

This seems to beg the following question: If four out of five large enterprises in the private sector believe benefits are key to operational success – even in tough times -- where does that leave those who want to make the federal sector (a pretty large enterprise) more like the private sector … by cutting benefits?

Guess you’d better ask them.

[For the employer part of the study, researchers conducted interviews with 1,519 company benefits decision-makers over two months in the fall of 2011. You can see the entire study at]

Posted by Phil Piemonte on Dec 07, 2012 at 4:02 PM

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