According to a study from Barclays, 6 out of 10 employees state that a comprehensive benefits package is essential when considering a job offer. Yet 85% felt their benefits package failed to provide the support and flexibility required to meet current and future financial obligations.
Generational perspective may be at work. This is perhaps the first time in history that up to five generations are active in the workforce. The aging Baby Boomers are working longer and retiring later, while Generation X follows closely on their heels. Millennials, also called Generation Y, are the least interested in benefits packages, according to the Society for Human Resource Management, and would prefer to take the money employers spend on benefits and use it as they see fit to provide for themselves.
Given the different needs and perceptions among the generations, it's no wonder that finding a one-size-fits-all benefits package can be difficult. There are, however, certain things you can do to tailor employee benefits for each generation.
A Word of Caution
When choosing benefits for your employees, keep in mind the recommendations from the Equal Employment Opportunity Commission (EEOC). You can offer different benefits packages to different employees, but you cannot do so in a way that discriminates by gender, race, age or other considerations. Many companies offer tiered benefits packages tied to a worker's grade level. This is a good example of how you can legally offer different benefits without facing charges of discrimination.
It is a good idea to run any changes in your HR policies past an attorney well-versed in HR law if you have any questions about complying with EEOC regulations.
What Do Employees Want?
Each generation values different things in a benefits package:
- Baby Boomers value salary level, health insurance, and a retirement plan.
- Gen Xers value salary level, a 401K plan with matching benefits, job security, advancement within the company, and opportunities for work-life balance.
- Millennials value benefits choices, paid time off, ability to work remotely, control over their schedules, and a great deal of flexibility.
Employers who wish to offer benefits packages to attract a wide spectrum of talent at different career points would be smart to create flexible benefits packages. Such packages could offer core benefits like salary increases, health insurance and a retirement plan or 401K, in addition to a menu of choices like paid time off, flex time, professional development opportunities and other choices. A group like this provides a core plan that appeals to all ages, yet is flexible enough to satisfy Millennials and Gen Xers.
Creating Your Benefits Plan
Creating a benefits plan takes time and research. You must balance the costs of the benefits against the advantages of offering them to potential employees.
Many companies research their competitors to see which benefits they're offering to new employees. This provides you with a benchmark against which candidates will measure your benefits package. Ensuring that your company benefits are equal to or better than your competitors' benefits will help you attract great employees.
Some benefits will cost your company money, such as health insurance, 401K or retirement plans, or educational benefits that pay for an employee's degree or job training. Others, however, won't cost much, if anything at all. Benefits like flex time, allowing employees to telecommute, and paid leave for volunteer work are all benefits that cost little out of pocket but may go a long way to attract great people, especially Millennials who value flexible benefits.
Keeping Track of Benefits
Offering core packages plus benefits choices sounds great on paper, but launching such a plan can be a headache. Tracking choices for each employee for benefits administration can be challenging. Fortunately, many payroll software systems enable you to track benefits at a granular level so that you can keep tabs on who selected flex time versus who selected professional development as part of their benefits package.
Why Offer Flexible Benefits?
The key to any successful business is to attract and retain top talent. Attracting top talent takes an ongoing strategy of both branding your company as a great place to work and offering enticing benefits. A flexible benefits package may be the tipping point for a talented individual deciding between two job opportunities. It can provide your firm with a competitive advantage, one that brings highly talented people to your doorstep and retains them longer.
Ask Your Employees What They Think
As you consider your options for benefits packages, take your employees' wishes into the picture, too. Ask for suggestions; you may be surprised by the answers. We often think that monetary rewards are what people want when recognition, flex time or better work-life balance may be more highly valued. The only way to find out what benefits will truly resonate with your employees is to ask them.
While you can't segment benefits by age, a flexible approach that blends core benefits with a menu to choose from will help you appeal to the broadest age group possible. To acquire, retain, and create loyal employees, improve your benefits package. Also, take a look at our eBook, Benefits Employees Want Most.
(Source: Barclays, Talking about my generation: Exploring the benefits engagement challenge, 2014)
(Source: SHRM, Millennials in the Dark About Their Benefits, 2016)