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MetLife performed its seventh annual study of employee benefits trends by fielding two sets of research interviews with employers and employees – One in August 2008 and another after the economy tanked in November 2008. Below are the main findings of that study along with analysis by Ted Williams, co-principal of Des Moines-based The Williams Group, a human resource management consulting and training company with approximately 150 clients in 18 different industries across the United States, Canada, and rest of the world.

Employee loyalty on the rise … maybe

According to the MetLife survey, the percent of employees who said they felt loyalty to their employers increased from 53 percent in August to 59 percent in November. In that same span, employee satisfaction rose 8 percent and the amount of employees who planned to still be working for their current employers in 18 months increased 4 percent. The report points to the economy as a potential reason for the increased loyalty of employees, however Williams says he would put the brakes on the term loyalty.

“I would spin it a little bit different. I think employees are grateful, I’m not sure I want to go to the loyalty piece,” Williams said. “So my point being, I think if you were an employee who is gainfully employed and your organization has a decent benefits plan, you are happier than a burglar in Burger King.”

In the tough economy, perhaps, as Williams suggests it is just short-term loyalty while employees are feeling the different economic pressures. That is something Williams says companies should keep in mind.

One thing is for sure, according to the study – a solid benefits package goes a long way toward employees’ job satisfaction and loyalty to the company. Of people who are satisfied with their benefits plans, 73 percent were satisfied with their jobs, while just 22 percent of people who were unsatisfied with their benefits were satisfied with their job.

The reason is that 41 percent of employees consider workplace benefits to be the foundation of their personal safety net. That’s up from 33 percent in the August survey, pointing to the economy as the reason employees have placed a heightened value on benefits.

Benefits impact on loyalty

According to the survey, 40 percent of employees said benefits play an important role in their decision to remain with an employer. From August to November, there was an 18 percent increase in employees who cited insurance benefits such as life, dental, disability, vision, etc. as an important factor in employee loyalty. During that same period, however, there was a 12 percent decrease in the importance of company culture and a 15 percent decrease in the importance of advancement opportunities to employee loyalty.

Williams looked at this shift in reasons for loyalty and pointed to a bottleneck in the workplace because of Baby Boomers. He said that generation is having to put in an extra 3-5 years because of hits to their 401K plans, and Gen Y and Gen X workers are realizing that suddenly advancement opportunities have been delayed.

“The chance for advancement has been compromised by the reality that you don’t have the turnover,” Williams said. “So from an employee’s perspective, I have a job, I may not be able to do a vertical move, but perhaps if I can pick up some skills, I can do a horizontal (move).”

How to deal with a changing dynamic

Employers know that employees value benefits, as shown in the MetLife survey. And employers said in the survey that their No. 1 reason for offering benefits was to retain employees.

“It used to be an afterthought, and now it is a critical recruitment and retention component,” Williams said.

And though the survey showed increasing levels of loyalty, Williams cautioned that the dynamic will shift as the economy improves.

“Right now, the employer is in the catbird seat. They have more job applicants than they can shake a stick at,” Williams said. “There are people applying for jobs at companies they wouldn’t have looked at three years ago. But they will take that job. So the employer says, ‘I got it made, I have my pick of people. I can get folks from a Fortune 500 that I couldn’t even talk to five years ago.'”

But as the economy improves, Williams suggests that a significant number of those people will go back to those Fortune 500 companies.

“Now the employee is going to be saying, ‘What is your compensation program, what is your benefits program?'” he said. “And so you see how the pendulum will switch.” And so goes loyalty.

Williams said he thinks that a lot of employers are not taking that into account and don’t feel they need to enhance their benefits programs because they can retain people because of the economy, and easily attract people because of the wide amount of available talent.

“Eagles fly and turkeys stay. And your eagles won’t stay when they have options,” Williams said. “I am suggesting to you the smarter employer, even if the smart employer is not changing their benefits program, they should be shopping right now, so that when the economy eases, they will have a comparison to what is being offered right now.”

Most benefits are safe

According to the survey, most employers did not intend to cut benefits in an attempt to control costs, with most citing the link between benefits and job satisfaction. Just 15 percent were considering a reduced 401(k) match, 12 percent were considering reducing coverage levels, and only 10 percent said they might shift costs to employees.

Good news for the 33 percent of employees who were concerned their benefits would be cut in the following year right? Not so fast.

Intentions differed from actions.

Williams estimated that 40 percent of employers have made some sort of cutbacks to benefits or passed along costs to employees.

He said employers know how much the benefits mean to their employees, and are making a “gargantuan effort” to preserve them. He also recommended that if they need to be cut, communication with the staff about the measures the company has taken to try to preserve them is key.

Employees want advice

Now more than ever, employees are interested in receiving financial advice about their 401(k) or retirement plan through their employer. That demand has risen 8 percent since 2004, according to the MetLife survey, which attributes the rise once again to the economy.

“Employees are hungering for this service,” said Williams, who had just returned from a meeting with a financial planning company talking about the very issue of employers providing financial resources to its employees.

With 51 percent of employees desiring advice about their financial future, Williams feels businesses are missing an opportunity to provide a valuable voluntary benefit.

“I think smart businesses ought to get ahead of the crowd, and look at providing that as a service,” he said. “Not necessarily one financial planner, but here are some financial planners that you might want to talk to. I think the forward-thinking employers should figure out which way the crowd is going and jump in front of them and lead them.”

Williams said that he hasn’t seen many employers trying to provide the service. According to the MetLife survey, there is a disconnect between employees’ need for financial planning, and the 10 percent of employers who defined financial planning as an important benefits strategy.

The MetLife survey suggests that one potential benefits solution to consider is incorporating voluntary benefits as the ability to sustain the cost of traditional benefits recedes. But, although 40 percent of employees are highly interested in a wider array of voluntary benefits, only 17 percent of employers included expansion of voluntary benefits among their top strategies for 2009.