POLAND EMPLOYEE BENEFIT TRENDS STUDY

Transcription

1 EMPLOYEE BENEFIT TRENDS STUDY FULL REPORT POLAND EMPLOYEE BENEFIT TRENDS STUDY Valuable Insights From Our Global Study

2 Contents About MetLife s Global Employee Benefits 3 Introduction 4 Market Profile 5 The War for Talent Heats Up 6 Winning Hearts and Minds 7 The Value of Benefits on Productivity 9 Impacting Retention 11 Which Benefits? 13 Going the Extra Mile 14 Retirement: A Huge Opportunity 16 Telling the Right Story 18 Conclusion 20 Methodology 22 2

3 About MetLife s Global Employee Benefits MetLife is a leading provider of innovative employee benefits combining local capabilities with global scale to deliver world-class solutions to companies. With more than 145 years of experience, MetLife brings considerable resources and experience to support its customers. Our product suite spans life, health, credit and pensions. MetLife has employee benefits operations in more than 40 countries and is a leading provider in over half of those countries. We are one of two founders of the MAXIS Global Benefits Network, 1 one of the world s leading international employee benefits networks with a presence in over 100 countries. We also provide data and best practices from around the world to help employers enrich their benefit plans and retain top talent. The Employee Benefit Trends Study (EBTS) is considered to be one of the most comprehensive employee benefits studies of its kind. It has been conducted in the US for 12 years and at various times in 7 other countries. MetLife in Poland MetLife operates in Poland since It serves several millions of customers through a diverse distribution network including agents, brokers, financial institutions and direct sales. MetLife offers a wide range of products and services including, among others, life insurance; capital fund life insurance; children s funds; and accident and sickness insurance to individuals and corporate clients. In 2014 MetLife received the Customer-Friendly Company award based on independent client surveys conducted by the Management Observatory Foundation (Fundacja Obserwatorium Zarządzania). This award is an endorsement of our values and of the modern and professional service our clients experience around customer satisfaction, cooperation, and quality of service. The mission of MetLife Employee Benefits in Poland is to ensure the financial security of employees and their families. Our tailor-made benefits programs help employers address diverse employee concerns, which may lead to increased employee motivation and loyalty. Our products and services are designed to help employers address a changing benefits environment, thus leading them to develop comprehensive benefits strategies for their company. 1 MAXIS Global Benefits Network (MAXIS GBN) is a network of locally licensed MAXIS Member insurance companies. MAXIS GBN is not an insurance provider and only the MAXIS member insurance companies provide insurance. Metropolitan Life Insurance Company, New York, NY, is a member of MAXIS GBN and is licensed to transact insurance business in New York. The other MAXIS member companies are not licensed or authorized to do business in New York and the policies and contracts they issue have not been approved by the New York Superintendent of Financial Services and are not subject to all of the laws of New York. 2 MetLife TUn ŻiR S.A. (f.k.a. Amplico Life S.A.) is licensed to transact insurance business in Poland and is a member of MAXIS GBN. MetLife TUn ŻiR S.A. is a subsidiary of MetLife, Inc., and was established in 1990 in Poland and acquired by MetLife, Inc., in

4 POLAND Introduction Welcome to MetLife s global Employee Benefit Trends Study (EBTS) and the first to look specifically at Poland. With a fast-growing economy it s the eighth largest GDP in the EU, forecast to grow at a 3.1% in and strong international connections, Poland is a critical player in the European market. The country is also going through some fascinating changes. Having left behind its communist past, Poland is now facing many similar challenges to its European partners. The business landscape is shaped by many factors like globalization, the free movement of people within the EU and unemployment now well below its peak a decade ago. 4 Many multinational companies (MNCs) see Poland as a vital market and base for operations and this, too, has shifted expectations about the relationship between employer and employee. Poland resembles the rest of the EU in another crucial regard: it has an aging population. Today, its median age is 38 but, based on current trends, it will be 51 by And with a relatively low birth rate, the country must answer some tough questions about retirement planning. With the challenges facing the pensions sector and employees who have increasingly high expectations about both in-work and retirement benefits, it is crucial that employers understand how benefits can serve their needs around recruitment, retention and productivity management. 4 3 International Monetary Fund, Recovery Strengthens, Remains Uneven, World Economic Outlook April Trading Economics, Poland Unemployment Rate , 5 World Bank, Poland, aging and the Economy, June 14, 2012

5 Market ProFIle 6 21st largest global economy (purchasing power parity). GDP derived from services (62.7%), industry (33.3%) and agriculture (4%). The only EU economy to avoid recession Population: 38.3m (26.5% below the age of 24, 29.2% above 55). Average life expectancy at birth 76.6 years. Per capita healthcare spend: $1,489 (2012). 7 The Organization for Economic and Co-operation Development (OECD) states: Total health spending accounted for 6.8% of GDP in Poland in 2012, 2 ½ percentage points lower than the OECD average of 9.3% The public sector is the main source of health funding in nearly all OECD countries. In Poland, 69% of health spending was funded by public sources in 2012, slightly below the average of 72% in OECD countries. 8 BeneFIts at a Glance 9 Since 1934, Social Insurance Institution (ZUS) has been the state organization responsible for social insurance, collecting employer and employee contributions (see below) and paying out benefits. Although governmental benefits are guaranteed, they are limited in many areas creating an appetite for voluntary additional benefits. Various institutions offer group products such as private insurance, medical care or retirement plans. However, relatively few companies in Poland offer these as employee benefits. Life insurance is mainly voluntary and is the most popular benefit, thanks to its low cost and easy access through employers. Many other benefits offered by companies are connected with leisure (sports and fitness clubs); education (courses, language training); or meal vouchers. Since 2011 the level of social security contributions to the state system have been: 19.52% of gross salary for retirement income insurance (contributions split evenly between employees and employers) 8% of gross salary for health and accident pension insurance (employees 1.5% and employers 6.5%) 2.45% of gross salary for absence insurance (paid by employee) 0.67% to 3.86% of gross salary for accident insurance (paid by employer; premium depends on the type of business) 9% of gross salary for medical healthcare insurance (paid by employee). 6 The CIA World Factbook 2014 for all facts in this section unless otherwise noted. GDP figures (and ranking) are based on purchasing measurement of power parity (PPP). 7 World Health Organization, Poland Statistics OECD Health Statistics 2014, How does Poland compare? 9 AXCO Insurance Market Report, Statistics: Life & Benefits, Poland, January

6 The War for Talent Heats Up Employers in Poland face a competitive environment for experienced talent. The good news? There are significant opportunities to improve employee commitment to their organizations. BusinessWeek calls it Europe s most dynamic economy. 10 According to the United Nations Conference on Trade and Development (UNCTAD) World Investment Report 2013, Poland will be 4th most attractive European economy for inward investment over the next two years and 14th in global terms. Relatively low inflation, stable employment levels and robust GDP growth point to a vibrant economy. But for many businesses in Poland, there s a challenge associated with this picture. Economic activity is creating even more of a need for experienced and skilled employees. Managing talent hiring, retaining and raising productivity is now more important than ever. Our survey bears out this analysis: 40% of employers told us they expect to face a talent shortage in the next 12 months. When we asked about their principal challenges around benefits, 55% said retaining talent was a very challenging issue; almost as many (54%) said the same about hiring talent. Employers are challenged more than ever to manage talent 40% of employers say they expect to face a talent shortage in the next 12 months. 12 MO Employers say they are highly challenged by 55% 54% retaining talent hiring talent 6 10 Bloomberg Businessweek, How Poland became Europe s most dynamic economy, November 2013

7 It is not only a war for specialized skills, but also for people managers, says Ewa Dabrowska, Head of Employee Benefits & Credit Life at MetLife in Central Europe. HR directors tell us they re worried about a lack of leaders able to keep their people engaged and committed to their jobs. The buoyant economic picture is also creating opportunities for employees to look around. In the aftermath of the crisis in 2008, job security was paramount, Dabrowska continues. Now the market has shifted and we will see more employees switch jobs as they feel more confident about their prospects. These opportunities are both domestic and international. The level of mobility for Polish workers is quite high, with 2.1 million Poles living abroad, according to the Central Office of Statistics (Główny Urząd Statystyczny). 11 The country s employers organization, Confederation Lewiatan, has already warned of a skills drain among highly skilled technical staff. We re seeing many organizations looking at their employees as increasingly important business assets, says Dabrowska. So anything that will increase their loyalty and help employers retain their services has to be a good thing. Winning Hearts and Minds The buoyant economy is creating opportunities for employees to switch jobs, and ambivalence about their current employers increases their propensity to leave. On the surface, employees seem relatively loyal to their employer. In the EBTS survey, 67% said they feel loyalty to their employer, a higher level than some other markets we studied. However, other responses suggest a high level of ambivalence. Only 29% of employees agreed that their company is a great place to work. A third of respondents said they hoped to be working for different employer within the year. Only 44% of employees agreed they are satisfied with their current job and just 24% said their employer offers the right salary for the job they do. The obvious way to address this war for talent, then, is to raise salaries. The vast majority (82%) of those considering leaving see higher wages as a good way to stop them from changing employer. 11 The Economists, Poland s Emigration Headache, November 2013, 7

8 But that s a costly option, particularly in a lowinflation economy. 12 And our study shows that other factors Motivators to retain talent clear difference between MNCs and non-mnc employers investing in differentiated, wellcommunicated benefits and creating a supportive, lower-stress environment are also powerful ways to ensure the talent stays put. Of those that are considering leaving, 57% said investing in their benefits package and/or retirement plan could encourage them to stay and 42% were looking for a lower stress environment. Interestingly, there is a clear difference between the restless employees at multinational companies (MNCs) and those at non-mnc employers when it comes to motivations to retain their talents. While 49% of MNC employees considering a change told us that improving their benefits package and/or retirement plan would be a motivation to stay, that figure rises to an even higher number 62% among non-mnc workers. 49% of employees said improved benefits and/or retirement plan would encourage them to stay with their MNC employers 62% of employees said improved benefits and/or retirement plan would encourage them to stay with their local companies Investing in a differentiated benefits package and a lower stress environment positively impacts talent retention 42% were looking for a lower stress environment encouraged to stay 57% said investing in their benefits package and/or retirement plan could encourage them to stay 8 12 Inflation.eu, Historic Inflation Poland CPI Inflation, 2014

9 The Value of Benefits on Productivity The more employees value the benefits provided by their employers, the more engaged they are with their job and workplace. Many employers in Poland appreciate the contribution a good benefits program can play in their HR strategy. Improved employee job satisfaction, for example, is cited by 82% of employers as an important reason for offering benefits. (Only improving employee health & wellness scores higher, at 85%.) Our study shows that in Poland, as in other markets we surveyed, benefits have a clear connection with employee engagement. Significantly, from our study, we can predict that highly-valued benefits will increase engagement. For each notch higher in the agreement level for Valuing Benefits, for example, we can predict an increase of 12% in terms of engagement with their employer. Overall, about half of employees say they place a high value on the benefits provided by their employer. Employees in professional services firms, those under the age of 50, and those with less than five years experience were all more likely to value their benefits. Those who work for multi-national corporations (MNCs), which typically offer more sponsored or cosponsored benefits, are even more likely than others to say they value the overall benefits package. From our study we can predict that highly-valued benefits will increase engagement, and many employees and their employers put a high value on benefits. But there appears to be an opportunity to use benefits more effectively to impact another critical business outcome, talent retention. The competitive environment fuels struggle for talent and benefits are proven to help Perceived value of benefits If an employer increases employee s perceived value of benefits by 1 point on the 5 point agreement scale, it increases the employee s sense of engagement to the employer by % Do not value benefits Highly value benefits 9

10 Predicting Employee Engagement and Commitment Our study asked employees if they value certain things from their employers such as benefits, wellness programs and supportive managers. But we also wanted to understand how these opinions impact key business objectives for employers. In other words, if an employee values the benefits program offered at work what is the upside for his employer? Does increasing the perceived value of the benefits program actually impact that employee s engagement or commitment to his employer? The answer is yes. To find this out, employees were asked to rate their agreement with a series of attitudinal measures and business outcome statements (see topics below). Then we applied multiple regression models using the attitude measures to see if increasing agreement with the attitudinal statements would impact agreement with the business outcomes. The analysis showed that improving these attitudes among employees can drive a 7% or greater increase in business outcomes. For example, we learned that for each notch higher in the agreement level for Having a Supportive Boss, Polish employees would show an increase of 12% in terms of engagement and a 5% increase in commitment to their employer. Attitude measures: Sense of financial control Value placed on benefits offered by employer Satisfaction with current medical benefits Value placed on health & wellness programs Caring/supportive boss Business outcome statements connected to engagement: I am satisfied with the job that I have now. To help this organization succeed, I am willing to work harder than I have to. At work, I feel as though I m bursting with energy. Business outcome statements connected to commitment: I feel loyal to my employer. I would take almost any job to keep working for this organization. 10

11 Impacting Retention While benefits are generating value through better engagement, more can be done to use them as a tool to retain employees. It s clear from our research that a well-designed benefits package offers significant advantages in keeping employees engaged and productive. Our study suggests Polish companies can do much more with their benefits programs to deliver this kind of positive business outcome. We found that only 21% of employees in Poland agree that their benefits package is an important reason to stay with their employer. This is about half the level we see in other markets such as Chile (43%), Brazil (49%), Mexico (55%), the United Arab Emirates (38%). It is even lower than Russia (31%), where many benefits for mid- and lower-level employees are limited. 13 But retaining employees is also an important reason to offer benefits (cited by 75% of employers). Differences in employees opinion across markets whether benefits is an important reason to stay with their employer. Poland United States 21% 50% Russia 31% Mexico 55% Brazil Chile 49% 31% 43% United Arab Emirates 13 See MetLife s Latin America Employee Benefit Trends Study (2013), UAE Employee Benefit Trends Study (2014) & Russia Employee Benefit Trends Study (2014) 11

12 Why is this? Part of the challenge is the long-established market for benefits in Poland. With one dominant and high-profile provider of life insurance and pensions in the workplace, many companies aren t getting any credit for offering these benefits employees associate them with the provider. Equally, many employees assume they ll get much the same offering even if they switch jobs which would explain the low scores for benefits as a retention tool comparative to other countries. We think it s also connected with the communication process and how employers are promoting their own benefits, says Bartosz Racino, Employee Benefits Sales Team Manager for MetLife in Poland. Very often they try to be neutral, to avoid being seen as an agent of the benefits provider. But they could be differentiating their benefits offering more clearly and winning much high employee engagement as a result by offering a broad scope of benefits at prices lower than individuals might find in the market. There s a real upside in taking a more proactive approach to helping employees understand what s on offer. So can benefits become a bigger differentiator? The study suggests yes: 39% of those saying they were tempted to leave said an improved benefits package would encourage them to stay. Given the wide range of opinions on whether benefits are a reason to stay, we can also conclude that some benefit packages may be more effective at some employers than others. This implies a tailored approach would yield the most positive outcomes for employers. It should be possible to work with a benefits provider to create a benefits package that s targeted to a particular set of outcomes whether that includes co-payment options, differential benefits based on seniority or a flexible benefits approach. In other words, the acid test, particularly around employee retention, is delivering the right benefits and ensuring those benefits are closely associated with the employer. Can benefits become a big differentiator? 39% of those saying they were tempted to leave said an improved benefits package would encourage them to stay. 12

13 Which Benefits? We know it s important that employers are valued as a provider of benefits. But which benefits should be part of their enhanced offering? What are employees interested in and under what circumstances? The results of our 2014 study are clear: over half of Polish employees would like their employers to provide a wider array of voluntary benefits. Nearly half also agree that it s convenient to purchase benefits through their employer. There s a neat alignment here. Nearly three-quarters of employers strongly agree that voluntary benefits are a cost-effective way to meet the diverse needs of employees a commonly held objective for employers benefits programs. We saw evidence of a wide range of unmet employee needs needs that a broader range and more flexible benefits package might address. For example, three-quarters of employees told us they are concerned about their family if they are not able to work due to disability or serious illness; but almost as many cite fears for their financial security in retirement. Among those who already feel financial stress is taking a toll on their work performance, those numbers are even higher (91% and 88%). Differences exist by demographics. For instance, for employees under 30, the biggest concerns are job security, home affordability and family finances if they can no longer work. They show a high interest in purchasing benefits such as life insurance (67%), supplemental health cover (59%) and dental benefits (57%) through their employer even if they pay the full cost. For 41 to 50 year-olds, however, we see more interest in retirement planning and accidental death insurance. That means employers can differentiate themselves by offering both choice and quality as part of their benefits package. And interest in a variety of benefits rises even further with employer contributions to the cost. The interest in life insurance, for instance, increased from 61% to 85% when the employer pays part of the cost. What s holding companies back, then? HR directors are often focused on increasing the attractiveness of their current benefits but worried about staying within budget, says MetLife s Ewa Dabrowska. However, we think there s a hidden advantage to enhancing benefits. It s not only cheaper than a salary increase, but it can be a targeted management tool. You can vary the type of benefit, the employer contribution or options presented based on grade or position. Many HR directors tell us this kind of flexibility is very desirable. Likelihood of buying benefits cost split with employer Life Insurance 61% 85% Supplemental Health Benefits 48% 76% Financial/Retirement Planning 39% 63% Disability Insurance 16% 25% Employer shared costs n Employee pays all costs 13

14 Going the Extra Mile Employers can use benefits to show they care about their employees health and financial security. A focus on wellness offers an additional opportunity to differentiate and potentially improve employee health. Employee health and wellness is cited by 85% employers in our study as a reason for offering benefits. 8-out-of-10 employers told us they think it is important an insurance carrier to offer wellness programming, and 94% of employers who actually offer wellness benefits are happy with them. The most common concerns for employers are stress (which we know can have a negative impact on productivity), work/life balance and sedentary lifestyle. Overall employees showed interest in wellness programming, but this was especially true for those who said financial stress negatively affects their work. For example, a higher proportion of them showed significant levels of interest in stress management programs (80% compared to 47% of those whose work isn t affected by financial stress), work-life balance programs (65% vs. 44%) and preventative care (88% vs. 73%). EMPLOYEES LEVEL OF INTEREST IN WELLNESS PROGRAMMING 80% 47% 65% 44% 88% 73% stress management programs work-life balance programs preventative care 14 financial stress affects employees work n financial stress does not affect employees work

15 Generally, Poles don t rate their own health very highly with 24% saying their health was fair, poor or very poor. When we compare this to fourteen markets studied either through EBTS or through a similar question asked by the Sloan Center on Aging & Work Global Workforce Study (2013), Poland would rank tenth lowest in terms of employee assessment of their own health. Wellness is a logical way to help employees work on improving their health. But there is a major disconnect between the importance placed on carriers offering programs to keep employees healthy (cited by 82% of employers) and the proportion of employers who use a medical services provider offering these programs (44% 40% if we exclude multinational corporations). Worse still, only 19% of employees think their employer offers wellness benefits; and only half of the 19% actively participate in them. The first step, then, is awareness, reinforcing the need to work on health as well as promoting existing programs, especially ones like flexible working arrangements and preventative care the top programs requested by employees who say they are not offered to them today. These are also programs where the gap is large between the number of employers who say they offer them and the number of employees that say they have access to them, suggesting an opportunity to better market the programs. The second is to think about what wellness offerings to consider adding. It s no surprise to see preventative care and the management of chronic illness high on employer lists as these can make a direct contribution to reductions in absenteeism and ability to deliver at work. Stress management programs are also commonly offered by employers and those that don t have wellness initiative place that high on their wish list for similar reasons. The study shows financial stress, for example, is commonly associated with unplanned absences or inability to concentrate on the job in hand. Employees who say their employers don t have wellness programs want to see fitness memberships, flexible work arrangements and Employee Assistance Programs all things that can help manage stress, among other benefits. 15

16 Retirement: A Huge Opportunity Employees worry that they need to do more to plan for a life after work but currently don t take action. That makes retirement planning one of the biggest opportunities for employers to differentiate themselves. One of the most compelling findings of this study for Poland is that employees are very concerned about their personal retirement situation but are not taking steps to prepare: 75% of employees say they are behind on retirement preparedness or haven t started saving. No wonder nearly an equal number of employees said a major financial concern was their ability to live comfortably after retiring. While 40% of employers see this issue as their responsibility, many of them don t offer supplemental third pillar retirement plans as a result. But the evidence from our study suggests they might benefit from taking a greater interest. First, the fact that employees feel they are not preparing for retirement can be detrimental to their work performance. This was particularly true of those over 40 and men, where low progress on their retirement plans resulted in less engagement with their work. Second, the survey shows that employers offering retirement plans may see many positive side benefits of doing so. Employers that offer a retirement plan believe their benefits are better appreciated (57% versus 33% for those that do not have a plan) and their employees are more loyal (56% versus 32%). Twice as many employees who have retirement plans say that benefits are an important reason they stay with their employer (46% versus 23%). Employers offering retirement plans see many positive benefits 57% 33% Employees Appreciate benefits 56% 32% Employee Loyalty Employers that offer retirement plans n Employers that do not offer retirement plans 16

17 Sound Advice for Pensions According to Metlife s Ewa Dabrowska, the more an employer puts into their pension offering, the bigger benefits they can accrue in terms of engagement and impact. The best way to motivate people to contribute more to their company pension scheme is matching the contribution, she says. Matched funding engages both employee and employer, which makes it the best solution for raising awareness of the scheme. But there s a word of warning: investment in such valuable long-term benefits needs to be well communicated. Employees need to know how their pension works, what you re contributing as an employer and that this is an ongoing benefit, Dabrowska says. Employers can use a pension scheme to influence employee motivation and engagement over the long run, but the package must be right and employees must be clear on what they re getting. If employers get that communication right, there s hidden value for an employer. A group pension scheme is one of the easiest and most cost-effective methods for additional savings, Dabrowska adds. Moreover, encouraging savings is a brilliant way to improve financial education. When you set up a pension plan, you re creating an opportunity to expand employees knowledge about the whole pension system which is going through some radical changes in Poland right now. Helping Employees plan for their Future Create a retirement plan. Third pillar schemes will build retirement savings for your employees, likely reducing their stress and also increasing engagement and loyalty. Get the message across. Recent changes in the pension system may have caused confusion about contributory pension schemes. So it is vital that employees know the value of a third pillar plan for those that offer one. Personalized statements can be very powerful in doing this: 70% of employees said they find these communications useful, not just with pensions but across a range of benefits. Encourage more employees to contribute. When asked why they don t contribute to a pension plan, employees cited high fees (58%), the need to keep savings flexible and accessible before retirement (26%), and portability between employers (20%) as barriers. Tailored plan designs can address many of these issues. There s a real fear among employees about how they will manage financially in the future, says MetLife s Bartosz Racino. People don t know what the state pension will look like. What we do know is that the population is aging, so the state scheme is likely to be stretched. That means employer-sponsored schemes can offer some real reassurance to employees if they are well-designed and properly communicated. How retirement plan benefits employers My company is a great place to work 24% 48% My employer is loyal to me 27% 54% At work I am bursting with energy 30% 44% My employer offers the right salary for my job 18% 41% Employer offers retirement plan n No employer retirement plan 17

18 Telling the Right Story Underlying all our other findings is one overriding prerequisite for deriving lasting value from a benefits scheme: good communication. The evidence suggests there s clear room for improvement which would deliver tangible returns from both existing and future programs. It s one thing to have a good benefits package in place to help employees feel they are taking care of their family or proactively plan for retirement. But it s quite another to deliver strong uptake of benefits and to reap the rewards around engagement and retention that companies stand to gain. Certainly a key argument for improving communication is to get more employees participating in benefits it s the secondranked goal for employers who already offer a package. Only 4 in 10 employers feel their communications are effective. Employees are even less convinced: only 27% of employees feel that benefit communications really educate them on their benefit choices. Among employees over 50, who may have more complex needs and tend to be less open to digital communications channels, that figure falls to 15%. Both employers and employees feel that benefit communication requires improvement 4 in 10 employers feel their communications are effective 27% of employees feel that benefit communications really educate them on their benefit choices 18

19 What can employers do to improve? The big lesson from our study is that one size does not fit all. A blend of channels is needed. Web portals are a critical part of the mix, as are face-to-face consultations. More sophisticated digital tools like webinars and social media are less popular. You have to remember to whom you are talking and use different communicating tools for different employees, says Bartosz Racino. Some of them prefer one page leaflets, while others prefer booklet full of details or even personal meetings on site with the provider s representatives. Ultimately, the solution could lie with management. In our study, having a caring, supportive boss was positively correlated to employee commitment. This conclusion was true for both genders and all age groups but especially for those over 40 years. And only 27% of employees thought they had one. Supervisors are perfectly placed to encourage and raise awareness of the value of their employer s unique benefits package. Equally, popular programs, such as flexible work arrangements, require the support of managers if they re to work well. These proactive managers do a great service to their employer, their employees and themselves. 19

20 Conclusion Poland is an important part of the European and global economy. Its people are hard-working and the country is an attractive market for multinationals. But there are risk factors. It s clear from our study that talent recruitment and retention is a major task for companies in Poland. Meanwhile changes to the landscape for social security provision especially around pensions and an aging workforce are creating new opportunities for companies to differentiate their employment offering. The physical and mental health of employees has become a challenge for businesses around the world and Poland is no exception. Our study has also demonstrated that companies can gain significant advantage in HR terms from entering a dialogue with employees about the evolving benefits landscape. This demands more involvement by employers, through active communication as well as good design of benefits programs. In particular, there seems to be a big opportunity to leverage the perceived value to employees using co-sponsored benefits. While this does involve effort and time by the employer, it s less costly that other options for improving engagement and talent retention particularly salary increases. The scale of this opportunity is evident from the study internationally. We have seen evidence of higher levels of employee engagement and higher perceptions of value in benefits programs in other markets. Companies in Poland prepared to take this more proactive approach ought to be able to attain similar levels of engagement. The survey offers strong evidence that optimizing benefits plans and communicating them clearly could be a key differentiator for employees when thinking about an employer of choice a crucial weapon in the war for talent. 20

21 As Polish employers look into the future, they should keep these findings in mind from our 2014 study: Rethink benefit plan designs to attract and retain talent. Companies should stay focused on benefits that help them achieve their strategic goals. These include delivering better work/life balance; raising awareness of their benefits program; and meeting specific employee needs. Delivering against these three areas can differentiate an employer from both domestic and multinational rivals and make them more attractive to skilled employees. Retirement planning is a clear win. We know that many employees are concerned about financial security both for their families and themselves in retirement making these strong areas for additional provision by employers. Straightforward, well-communicated pension schemes can also offset fears around less predictable state retirement provisions and low returns. Employees value co-sponsored benefits. Employers who take the time to build benefits packages that meet diverse needs of their workforce should reap benefits in terms of engagement and commitment. It s also clear that many employees see real value in buying additional benefits through their employer, especially their employer pays part of the cost which, properly communicated, can be another important source of differentiation. Wellness programs make a difference. Both employers and employees told us that a workplace wellness strategy is important to them. And employers with wellness programs are overwhelmingly satisfied with them. But relatively few in Poland actually offer a broad wellness package within their benefits offering. This creates a double opportunity. First, to improve employee engagement and help reduce absenteeism from health problems. And second, to clearly differentiate your business from rivals in the war for talent. Prime areas to consider are health information campaigns, preventative health measures (such as proactive screening), flexible working and stress management. Enhance benefit communications to educate employees. The study also highlighted some discrepancies between benefits being offered and employee participation. Organizations with a wellmanaged approach to communicating benefits using traditional methods, digital channels and face-to-face communications reap far greater rewards from their benefits program. In markets where benefits are more actively supported, they appear to have more of an employer pay off. 21

22 Methodology Statement on Methodology: The MetLife Poland Employee Benefit Trends Study was conducted between January and March 2014 by ORC International, a leading global market research firm. Results were obtained through online interviews. To qualify for the study, respondents had to be between the ages of 18 and 70. Statistical analysis was conducted and the overall sample of n=300 yields results interpretable at a 95% confidence interval with a margin of error of ± 5.6%. Demographic Profile of the Employer Sample: Interviews were conducted with 300 employers, all stating that they offer benefits and are aware of at least one insurance company that offers employee benefits. Eligible respondents were those dealing with employee benefits or employee policies in companies with 10+ employees. Government and public administration organizations were excluded. # of Employees In Poland % % % Industry Heavy Industry 31% Sales & Trade 8% Professional Services 41% Other 20% # of Locations in Poland 1 34% 2 18% 3 9% 4+ 38% Gender Male 59% Female 41% Province Currently Work Kujawsko-pomorskie 2% Lubelskie 4% Lubuskie 2% Todzkie 6% Matopolskie 10% Mazowieckie 26% Opolskie 2% Podkarpackie 3% Podlaskie 3% Pomorskie 6% Slaskie 20% Swietokryzskie 2% Warminskoi-Mazurskie 1% Wielkopolskie 6% Zachodniopomoskie 2% 22

23 Demographic Profile of the Employee Sample: A total of 300 interviews were conducted with full-time employees (70% saying they received benefits from their employer) in companies with 10+ employees. Employees from government and public administration organizations and those self-employed were excluded. Respondents had to have some responsibility for household insurance or financial decisions. # of Employees In Poland % % % Gender Male 43% Female 57% Industry Heavy Industry 32% Sales & Trade 13% Professional Services 37% Other 18% Education Vocational School 7% Secondary School 36% Some University Courses 13% University Degree (Bachelors) 15% Post-graduate Degree (Master or PhD) 30% Operations in 3+ Countries Yes 35% Occupation Director 1% Manager of a Division 26% Operator/Laborer 28% Salesman 10% Assistance/Analyst/Coordinator 28% Citizen of Poland Yes 100% Age % % % % % Province Currently Work Kujawsko-pomorskie 4% Lubelskie 3% Lubuskie 5% Todzkie 4% Matopolskie 8% Mazowieckie 18% Opolskie 3% Podkarpackie 5% Podlaskie 1$ Pomorskie 7% Slaskie 24% Swietokryzskie 2% Warminskoi-Mazurskie 4% Wielkopolskie 9% Zachodniopomoskie 3% 23

24 About the Study MetLife s Employee Benefit Trends Study delivers timely and reliable research results that explore important benefits issues and evolving trends around the world. Building on more than a decade of research and experience in the U.S. as well as nine additional markets since 2007, the study provides fresh insights that can help employers get more from their benefits investments in the form of satisfied, skilled and productive workers. The study also suggests tactics to help employees become more knowledgeable benefits consumers, leveraging insights from multiple markets in order to respond to the evolving benefits environment. The study design, involving both employer and employee surveys, was developed in the US and has been adapted in various key markets around the globe including: 2007 (Australia, Mexico, UK and India); 2011 (Australia, Brazil, India, Mexico, United Kingdom); 2013 (Brazil, Chile, Mexico); and 2014 (United Arab Emirates, Poland, Russia). About MetLife MetLife, Inc. (NYSE: MET), through its subsidiaries and affiliates ( MetLife ), is one of the largest life insurance companies in the world. Founded in 1868, MetLife is a global provider of life insurance, annuities, employee benefits and asset management. Serving approximately 100 million customers, and 90 of the FORTUNE 100 as clients, MetLife has operations in nearly 50 countries and holds leading market positions in the United States, Japan, Latin America, Asia, Europe and the Middle East. For additional information, visit us online at: Poland: MetLife: MAXIS: METLIFE, INC. L (exp1215)(All States) Metropolitan Life Insurance Company 200 Park Avenue New York, NY