Are benefits the key to happy employees?

Employers large and small know turnover can be costly. But keeping workers and keeping them happy aren’t necessarily the same thing.

A recent study from insurer MetLife found that just 44 percent of employees at firms with fewer than 500 workers reported having a strong sense of loyalty to the company, down from 62 percent two years ago. Larger companies had a 50-percent loyalty rate.

Quibble with MetLife’s definition of a small business if you must, but one conclusion rings true nevertheless: Employee retention will be a challenge as the economy recovers—and that could hit smaller firms especially hard.

“One person leaving a small company could have a significant impact, versus 100 leaving a huge company,” said Chris Woolard, a senior consultant at Indianapolis-based business consulting firm Walker Information. “And the most likely [workers] to leave are the top talent.”

In the short term, disgruntled staffers are less likely to take on more responsibilities for the common good, he said. “They’re already stretched so thin, they’re just trying to get by,” said Woolard, who studies employee loyalty.

Eventually, they’ll leave, he said—or cause enough morale issues that managers will show them the door.

But Woolard didn’t agree with MetLife’s suggestion that employers beef up their benefits to satisfy workers. “Sometimes, that could be what’s trapping employees” in jobs they no longer enjoy, he said.

What do you think? Are pay and benefits the key to keeping employees happy, or do workers care more about quality-of-life issues like a manageable workload?