Employee Benefit Packages Should Permit Personalization by Steff Chalk, Managing Editor
Employee benefit packages continue to evolve toward personalization. The days of off-the-shelf, one-size-fits-all, employee benefit packages have become a thing of the past. In today’s environment, where unemployment is at record lows and the labor market is hotter than ever, “cookie-cutter” employee benefit packages are being replaced by offerings that reflect the different values of generations. There are different priorities for each generation. The priorities of one generation are not the same as the priorities of another. What b omes most important to a generation is dependent upon where that generation falls in their age, lives, and careers.
Employers are faced with employee benefit challenges on many levels. Todays’ workforce spans five distinct generations, all with different wants, needs, and expectations. When it comes to employee benefits, there is a span of 50 years or more between the oldest and youngest of the generations: Silent generation, Baby Boomers, Generation X, Millennials and Generation Z. There remains a span of over 50 years or more between the oldest and youngest of the generations. As noted recently in BenefitsPro, health insurance, and a comprehensive retirement plan are most important to Boomers and the Silent generation. Gen X employees desire a healthy work-life balance, career advancement opportunities and a retirement plan that allows them to make payroll deductions and provides them access to matching contributions from their employer. Flexibility is key for Millennials and Gen Z; they want more paid time off, tuition reimbursement, and the ability to work when and where they want.
As BenefitsPro aptly points out, “There is no one-size-fits-all compensation package that can fairly satisfy each generation of workers. Employees today want to feel heard, understood and cared for by their employer. Furthermore, most want a job that fits with their personal interests and lifestyle.” The graph below, from LinkedIn and cited by BenefitsPro, shows which generations place the highest priority on employee benefits. Interestingly, it’s Millennials. Given that Millennials represent the largest generation in the U.S. workforce (35%), according to Pew Research, employers should pay attention to their sentiments on employee benefits.
What are employers doing to solve for the unique employee benefits challenges of today? Many are moving away from traditional employee benefits offerings and instead, embracing the idea of “personalized” compensation. How is it that employers get from where they’ve been with employee benefits to where the world is going? One way is simply by listening, to what new hires and existing employees are telling you they want, need and value. BenefitsPro asks the all-important question: “How else will we know what, specifically, each employee wants unless we ask them?”
Employers are using a variety of listening tools, including social media, focus groups and surveys to garner information about what employee benefits workers want. Some are even having one-on-one conversations to discuss, what makes employees tick — what motivates them and gives them purpose while they’re on the job. Gathering this information enables employers to customize their employee benefit package offerings to the specific and unique needs of their workforce. As a result, employers have expanded their employee benefits menus to offer an innovative mix of compensation, bonuses, flex time, paid time off, retirement plans, student loan repayment assistance, and career development opportunities, according to BenefitsPro. What’s more, non-traditional offerings such as eldercare referral services, disaster relief, and women advancement initiatives have also been added to the list of employee benefits within the last year, according to data from human resources organizations WorldatWork and Korn Ferry, cited by BenefitsPro.
According to BenefitsPro, the average employee tenure is 4.6 years; for Millennials, it’s half that. High turnover is a disadvantage for employers — it can cost as much as twice an employee’s salary to recruit and re-train a replacement. In addition, high turnover rates can hurt company morale and damage a firm’s reputation. Taking a more personalized approach to employee benefits can help employers retain existing employees, as well as stand out in a crowded and competitive labor market. As such, employers must embrace change and adopt flexible and non-traditional employee benefits that reflect the needs and values of an evolving workforce. A personalized employee benefit package shows your firm’s commitment to your employees’ success.
