September 18 2007 - As companies grapple with competing objectives - managing benefits costs
while attracting and retaining skilled talent - the link between employee benefits strategies and business and
financial goals is expected to increase by 2012, according to Employee Benefits: 2007 & Beyond, a new report
released today by Prudential Financial, Inc. (NYSE: PRU) that explores current and future employee needs and how
employers plan to respond to those needs. The report highlights employers' need to improve the perceived value of the
benefits programs and services they provide as their employees become increasingly demanding.
"Benefits will continue to be a critical tool for attracting and retaining talent. And, the range of
benefits offered, how they are funded, and the ways in which they are communicated and delivered will evolve as
workforce demographics change," said Ed Baird, president of The Prudential Insurance Company of America's Group
Insurance. "We are committed to helping companies meet the challenges of providing high-value group insurance
solutions to their employees and their families now, and for years to come."
Prudential's report on Employee Benefits: 2007 and Beyond provides valuable insight to plan
sponsors, brokers/consultants, third-party administrators and other key stakeholders in support of their business
planning and strategy development. Emerging trends shaping the employee benefits landscape, include:
- The Benefits Balancing Act Gets Tougher
Employee benefits remain a strategic priority for attracting and retaining talent, but cost control is a business
imperative. To that end, plan sponsors are shifting even more benefits costs and financial responsibility to their
employees. Consequently, U.S. workers are less enthusiastic about their company's benefits package, though most still
see value. Plan sponsors will continue to expand their use of cost-containment initiatives, including
wellness/prevention programs, consolidation of benefits providers, and plan design modifications.
- Workers Lack Awareness and Knowledge About the Benefits of Disability Insurance
Workers need help understanding their disability benefits and the extent to which they will provide income
replacement. Today, they spend little time and few of their benefits dollars on their disability coverage. Disability
plan education and communications are taking a backseat to other benefits communication efforts, primarily medical
and retirement plans. Putting more of a spotlight on disability insurance during or outside the enrollment season
may help raise employee awareness and understanding of this important benefit.
- Current Education and Enrollment Efforts Fall Short of Helping Workers Select the Best Benefits
Benefits communication and education efforts receive low grades from both plan sponsors and participants. Workers are
frustrated with today's enrollment process-some find the amount of information and choices overwhelming while others
are hungry for more information and assistance. Plan participants want targeted and personalized benefits
communications to help them understand and select their benefits, especially as they pay a larger share of the bill.
- Women Seek Greater Value from Workplace Benefits
Working women express greater concern about most financial and lifestyle needs compared to their male colleagues.
Having enough money in retirement is a concern for many working women but not as pressing as other financial and
lifestyle concerns, such as work/life balance. While women do value their benefits and rely on the convenience of
the workplace for many of their financial products, they would like their employers to do more to address their
specific needs.
- Multinational Companies Increasingly Recognize the Importance of a Global Benefits Strategy
Mid-size firms expect considerable growth in their overseas employment and are more likely than other companies to
adopt a well-coordinated, global benefits strategy by 2012. Despite the anticipated growth in overseas employment,
most plan sponsors do not have a global benefits strategy. Those with a global approach to managing benefits tend to
have a more strategic orientation to employee benefits and their strategy is better linked to business/financial goals.
"The employee benefits industry continues to undergo tremendous change amidst challenging economic,
demographic, social, legal/regulatory, and competitive forces at work. As plan sponsors look ahead and consider the
role of benefits within their organizations, more significant change is likely in store," said Baird. "Prudential is
dedicated to helping benefits professionals navigate the shifting industry landscape through research and insights
that we believe will shape the delivery of employee benefits programs."
Prudential Financial's Employee Benefits: 2007 and Beyond report was fielded via the internet during
April and May 2007 and consists of two distinct surveys: one among benefits plan sponsors and the other among benefits
plan participants. This allows us to compare and contrast opinions of employers and employees on key benefits issues.
The plan sponsor survey is based on an online national random sample of 1,400 benefits decision makers including
executives, business owners, human resource and financial management professionals at businesses with at least 50
full-time, benefits eligible employees and has a margin of error of +/-3.0 percentage points at the 95 percent
confidence level. The plan participant survey is based on an online national random sample of 1,028 employees, age
18 or older who work full time for a company with at least 50 employees and has a margin of error of +/-3.0% at the
95% confidence level. For a copy of the Employee Benefits: 2007 and Beyond report, visit
www.prudential.com/gi/.
Prudential's Group Insurance business manufactures and distributes a full range of group life,
long-term and short-term group disability, long-term care, and corporate and trust-owned life insurance in the U.S.
to institutional clients primarily for use in connection with employee and membership benefits plans. Group Insurance
also sells accidental death and dismemberment and other ancillary coverages and provides plan administrative services
in connection with its insurance coverages.
Prudential Financial, Inc. (NYSE: PRU), a financial services leader with approximately $648 billion
of assets under management as of June 30, 2007, has operations in the United States, Asia, Europe, and Latin America.
Leveraging its heritage of life insurance and asset management expertise, Prudential is focused on helping individual
and institutional customers grow and protect their wealth. The company's well-known Rock symbol is an icon of
strength, stability, expertise and innovation that has stood the test of time. Prudential's businesses offer a
variety of products and services, including life insurance, annuities, retirement-related services, mutual funds,
investment management, and real estate services. For more information, please visit
www.prudential.com.
Group Insurance issued by The Prudential Insurance Company of America, Newark, NJ.
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