Employers: Time to “Think Different” About Benefits for Younger Generations. Younger generations don’t think about benefits the same old way older worker always have. That means employers should start thinking about them — and how best to serve younger employees’ needs — differently, too.
That’s the chief takeaway from a recent HR Dive , which is part of an ongoing series on the multigenerational workforce. This particular piece focuses on how benefits are offered and administered for Millennials (those born between 1981 and 1996) and Generation Z (those born after 1996). HR Dive calls these generations “a growing force to be reckoned with,” and notes that it’s time for employers to re-evaluate their benefits strategies to accommodate their younger employees.
Today’s workforce is increasingly mobile, and they don’t tend to stay at one employer for long. Moreover, the world young adults face is very different from the way it was five or 10 years ago. Things feel less settled. As such, younger generations select and consume employee benefits differently, and thus, value different offerings than their Boomer or Generation X counterparts. For instance, younger workers may bypass voluntary benefits like life insurance and disability insurance in favor of meeting more immediate needs, like tuition reimbursement and commuter benefits.
In addition, when it comes delivering employee benefits, think more Amazon and less McDonald’s dollar menu. In other words, younger employees prefer more choices, and the option to thoroughly evaluate each one to determine which best meets their needs. Traditionally, benefits offerings have been “one-size-fits-all,” and that paradigm has to change, according to HR Dive.
That said, employers can’t just throw out a bunch of options that don’t resonate. Where possible, employers should provide decision-making tools that are intuitive and easy to understand, and in most cases, mobile-centric for younger “digital native” generations who have grown up almost literally with a smartphone in their hand.
Retirement savings is another area of struggle for younger employees, particularly millennials. HR Dive cited recent data from the National Institute on Retirement Security (NIRS), which found that two-thirds of working U.S. millennials failed to save for retirement, and just 34.3% participated in their employer’s retirement plan. There are many reasons: low wages, part-time or “gig” job situations, a general lack of trust in the financial industry, and a dearth of financial literacy. Further, the NIRS report found that 40% of millennial workers cited eligibility as the chief cause of their lack of participation, typically due to a lack of requisite hours or length of employment. However, among millennials who were eligible and had access to an employer-sponsored retirement plan, 93% participated.
Well-being programs are another area of focus. This area is evolving, and employers are offering a more holistic approach to employees’ well-being, encompassing physical health, along with financial, mental and emotional issues. In short, employers should make employee well-being a top priority.
The winds of change are blowing in the benefits arena. Long story short: this ain’t mom and dad’s generation, and as a result, mom and dad’s traditional benefits offerings won’t cut it anymore. Employers should consider the unique needs of millennials and Generation Z employees, and tailor their benefits programs accordingly.