As the economy improves, small business owners face a new challenge: employee retention.

According to MetLife’s 9th Annual Study of Employee Benefit Trends, only 44 percent of employees feel a strong loyalty to the small business for which they work. That’s down a significant from 62 percent in 2008.

But wait... the picture gets worse. In fact, 34 percent of small business employees surveyed would like to work for a different employer. What is going on? There are many factors in breeding employee loyalty--and it's not all about money. The MetLife study found a strong tie between employee benefits and employee loyalty.

"The MetLife study is a reality check for smaller employers who may still be viewing their workforce through rose-colored glasses,” says Jeffrey Tulloch, vice president, U.S. Business, MetLife. “Economic recovery will not only present opportunities for employers but also for top performers. One area small businesses may overlook is whether their benefits programs are designed as strategically as they could be. It is not necessarily about spending more, but optimizing offerings to attain three top objectives: employee retention, increased productivity, and cost control.”

MetLife suggests voluntary benefits as an option for small business employers looking for a cost-effective way to increase their offerings. According to the study, about half of employees find it important to have benefits like life, dental, and disability insurance available to them through the workplace even if they have to pay all of the cost themselves.

Beyond traditional healthcare, however, the study found that financial health is also a key to employee retention. Financial concerns can take a toll on productivity and contribute to stress-related ailments. But there is a disconnect in this area between small businesses and their employees. While 77 percent of small business employers do not plan to offer financial/retirement planning seminars within the next 18 months, 75 percent of employees who admitted their productivity was impacted by personal monetary issues would be interested in learning how to address issues that cause financial stress.

"It can be a win-win situation when employers utilize and promote programs that can help employees become more financially secure. Employees can mitigate some of their financial stresses and obtain greater peace of mind, and employers can reap the benefits of a more productive and loyal workforce," says Dr. Ronald S. Leopold, vice president and national medical director, U.S. Business at MetLife. "There is a business value to both a physically and financially healthy employee."

Check out this video for more insights into generating employee loyalty: