MetLife’s 6th annual Study of Employee Benefits Trends finds that employers underestimate how important benefits are to employee loyalty. This insight is surprising given that employers see a strong link between benefits and retention.

More than half of employers (58%) believe that benefits play a very important role in employee retention. That percentage climbs to 65% for employers with 500 or more employees. Employees also say benefits are playing an increasingly important role in their decisions to remain with their employer. Nearly half (45%) of employees say benefits are an important reason why they remain with their current employer, up from 33% a year ago.

While responses by both employers and employees highlight a correlation between benefits and retention, companies appear not to fully comprehend the importance of benefits to employee loyalty. For example, when asked about the importance of various work-related factors to employee loyalty, employees cited retirement benefits and advancement opportunities as tied for the third most critical factor, behind salary/wages (number one) and health benefits (number two). In contrast, employers cited retirement benefits as tied for fifth. Furthermore, 72% of surveyed employees say retirement benefits are an important factor in loyalty, whereas only 41% of employers say the same. Retirement benefits are clearly more important to employees than employers realize they are.

By better understanding how benefits contribute to loyalty among an increasingly diverse workforce, employers can be better positioned to retain their most talented workers. In order to drive loyalty and retention, employers have an opportunity to optimize both the real and perceived value of their benefit plans through such strategies as the following:

• Personalization. A one-size-fits-all approach to benefits may no longer be effective. Employers should tailor benefits to different employee segments, including older workers, retirees, and other life-stage groups.

• Breadth of Benefits. Employers should provide a broad, cost-efficient benefits offering with a wide range of options to meet the increasingly diverse needs of the workforce; this offering can include voluntary benefits, health and wellness programs, work/life balance programs, resources for aging workers, and retirement plans. For instance, a growing number of employees, 44% this year compared to 31% last year, are interested in their employer offering a wider array of voluntary benefits.

• Decision Support and Communications. Such tools as product calculators or “rules of thumb” about what products and coverage levels are appropriate can help employees make smarter benefits decisions. Also, clear and targeted benefits communications can help workers both understand and appreciate the value of the benefits they receive at the workplace.

By optimizing benefits plans, companies may be able to lead the way in bridging the loyalty gaps that exist in the workforce in order to achieve business objectives and remain competitive.