The Loop

Cater Benefits to a Variety of Demographics

Filed under: Benefits

While there are many advantages to having workers representing up to four generations, this scenario can be challenging for employers to provide benefits that resonate with different age groups.

COVID-19 served to “reboot” America’s job industry. Twenty million people reconsidered their job situations and resigned between April and August of 2021. In recent months, there’s actually been an uptick in higher job market participation – meaning people who sat on the sidelines over the past few years have gone back to work. Some even returned to their previous employer. 

Employers have a complex task at hand: Retain current workers, attract former talent, and compete for new hires, both young and mid-career experts. Among this labor pool are innumerable needs and desires, in terms of benefits. Some workers are trying to pay off debt; some want to start families. Others are worried about healthcare costs and having enough money to retire. Everyone is still dealing with high inflation, including groceries, gas, rent, and mortgage rates. Workers have a lot of issues to deal with, which gives employers the opportunity to solve for some of them – thus generating greater value than simply a job.

Core Benefits

However, what appeals to Generation Z may not entice Baby Boomers, and vice versa. One way to approach this dichotomy is to consider benefits in terms of life cycle phases. But first and foremost, employers should secure foundational benefits. These include affordable health insurance with generous coverage, an automatic 401(k) plan with a substantial match, flexible paid-time-off policies, and the opportunity to increase one’s income through career growth.

The Gen Z Experience

Beyond the basics, consider what each demographic values the most. You may find that where some benefits may not resonate, changes in culture and policies may be appreciated by all.

For example, the youngest of workers – colloquially referred to as Gen Z – tend to seek work experiences that align with their values. This includes work-life balance, workforce diversity and inclusiveness, and strong corporate citizenship (i.e., be part of society’s solutions, not its problems).

Recognize that these values stem from Gen Z’s early experiences: Having parents who were laid off during the Great Recession and/or the pandemic; social media access to the 24-hour news cycle; and the impending impact that climate change will have throughout their lives. Because of these factors, Gen Z is drawn to flexible policies that can help mitigate stress and avoid burnout. They also seek an income that allows them to afford rent, groceries, car payments, etc. – which requires higher starting wages than in previous generations. Benefits that appeal to this group include:

  • Student loan repayment assistance; tuition reimbursement; and financial literacy education such as learning how to manage debt
  • Virtual healthcare options; stipends/discounts to encourage physical exercise; and mental health support via apps, counseling, and support groups
  • Life coaching; career mentoring program; text peer support; training and certification opportunities

Millennials Are Now Adulting

The Millennial Generation is now entering mid-career stage, so this demographic is largely focused on career and family. They appreciate scheduling flexibility and remote-work options, and better understand the value of additional financial benefits, such as:

  • Dependent care (for children and aging parents), paid family leave, dependent care flexible spending accounts (FSAs), back-up childcare, and children’s learning and development aids; advanced fertility coverage, surrogacy benefits, and adoption assistance programs; employee assistance programs (EAPs)
  • Pet insurance and other pet-related perks (e.g., pet daycare, dog-walking, and pet boarding subsidies/discounts)
  • Supplementary life insurance, group homeowners’ insurance, debt management, education savings plans, investment and retirement planning guidance

Overlooked VIPs

So much attention is paid to the large and exacting young adult generations that it can be easy to take for granted the wise and knowledgeable Generation X and Baby Boomers. We expect them to want the status quo. However, they have observed how benefits have changed over the years and watched as employers bent over backwards to accommodate young adults. Imagine how that must feel.

Some may have unfulfilled goals – personal and/or professional. Others may be stretched financially with kids in college and retirement on the horizon. How can you tailor offerings so that your most experienced workers feel tangible benefits, believe they are valued, and remain highly engaged?

  • Healthcare becomes more of a concern as we age. It may be prudent to offer higher coverage for preventive services, cancer screenings, critical illness insurance, and promote wellness programs to discourage a sedentary lifestyle that often accompanies getting older.
  • Reward time worked at the company by increasing paid-time-off policies for seniority. Some employers give workers the opportunity to buy additional vacation days each year. Offer sabbaticals; more flexible work arrangements (e.g., long retirement phase-outs, such as 4-days a week, then three days, two days, etc.); liberal caregiver and parental leave policies
  • Social Security and retirement income planning; Medicare education

The Outliers

There are always outliers in every workforce. Singles who never marry or start a family. Those with more than enough money. Outliers may not follow the traditional path, but that doesn’t mean they don’t want to feel included. So many of today’s popular employer-sponsored benefits – student debt assistance, childcare, work-from-home policies – may not apply to them at all.

A Lifestyle Spending Account is a good option that can capture the desires of the outlier without alienating the rest of the workforce. This is a taxable stipend account that enables workers to spend money on products and services that meet their individual needs. These expenses can range from yoga classes and home delivery meals to purchasing travel insurance and vacation excursions. With a Lifestyle Spending Account, employers set the dollar limit and establish parameters for how the funds may be used.

A popular trend in today’s employer benefits is customization. The current labor market is worker-centric, so the usual cache of benefits is not likely to resonate with a wide spectrum of age ranges. As employers strive to tailor benefits to different demographics, ensure that offerings are aligned with compliance equity and nondiscrimination rules. Pay close attention to guidelines related to highly compensated employees, older workers, gender, race, and people with disabilities, including mental health and complex physical health issues.

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