The Loop

The Demise of One-Size-Fits-All Benefit Plans

Filed under: Benefits

America’s workforce continues to become more diverse. It is presently comprised of five different multi-ethnic generations ranging from age 18 to 80. Not only that, but in the time between the Great Recession and the COVID-19 pandemic, work environments and hiring models have changed dramatically. Thus, by necessity, the demise of one-size-fits-all benefit plans is well underway. 

The primary carrot that continues to draw workers to traditional employee roles is a menu of valuable and cost-efficient benefits. However, that menu must continue to evolve to meet the needs of today’s disparate working population. To make matters more complicated, contemporary workers are more discerning than ever, now that they can research benefits to better understand how they work, what’s available, and what competitors in their industry offer.\

Today, Americans spend considerable time evaluating their choices before making major purchases, such as a car or an appliance. They seek recommendations, read online consumer reviews, and comparison shop for the best price. Why should shopping for something as important as healthcare insurance or a retirement savings plan be any different? Furthermore, it is important to recognize that what a Millennial “Googles” to learn about 401(k) investing may be quite different from what a Baby Boomer seeks.

This is why employer benefits need to be more flexible and responsive. The days of limited choices are fast slipping away, as competition emerges among diverse benefit options, portable benefit availability, and the increasing viability of working as an independent contractor. If companies want to stay competitive, it will take a wide range of flexible, a la cart benefits to attract the best and brightest talent. 

Unfortunately, many of today’s employer package benefits are not tailored to a diversified workforce, whether by age, familial status, or socio-economic need. Moreover, the inflexibility of a once-a-year enrollment window fails to account for changing life circumstances and coverage requirements. While most robust benefit packages include baseline coverage for medical, dental, and vision insurance, employers are beginning to recognize the value of tailored benefits – especially among the younger workforce.


MetLife reports that among Millennials, who represent more than a third of the workforce,

86 percent say they want benefits customized for their individual circumstances and age. For example, they may consider tuition reimbursement a must-have, whereas Baby Boomers are more concerned about the employer match for a retirement plan. A recent survey found that Millennial and Generation Z workers most often seek: 

  • Flexible paid time off (PTO)
  • The ability to work remotely
  • A team-based, collaborative environment
  • Corporate philanthropic causes that align with their own values
  • The ability to choose from a menu of insurance product options
  • Digital communication methods and “self-service”
  • Career and personal development opportunities
  • A wide selection of benefits, such as tuition reimbursement, accident insurance, pet insurance, PTO purchase, and paid family leave

Incremental Change

Benefit offerings have begun to change, starting with larger employers. It is now fairly common for a large corporation to offer a wide range of core and voluntary benefits, such as supplemental life insurance, pet insurance, disability coverage, legal shield, identity protection, loan repayment, financial literacy, and even paid sabbaticals. In recent years, there also has been an uptick in workplace education resources and vacation planning or payment.

The time has come for this same approach to be adopted among middle-market employers. 

Flexibility Is Key

According to research by Fidelity Investments, more than 25 percent of employers enhanced worker benefits this year in light of the COVID-19 pandemic. Some of the more popular 2020 perks included home office stipends, telemedicine options, childcare, and mental health resources – particularly given the likelihood of burnout among employees juggling caregiving responsibilities while working from home.

One of the more flexible changes has been to offer the ability to sign up for additional benefits outside of the traditional enrollment period. Given the potential fatal nature of the coronavirus, employers have seen a greater call for legal and estate planning services, will preparation, and identity theft protection.

Technology platforms have become all-too important, even for older workers who are more inclined than ever to utilize contactless benefit enrollment and engagement. Three quarters of workers say ease of access to benefits is more important now than ever before, and 77 percent want their employer to communicate benefit information all year round, not just during open enrollment.

And finally, hiring models continue to change. In the future, employers will likely hire a greater blend of traditional workers, contract workers, and even permanent remote workers – who may even live out of state or outside of the US. This means assembling a package of perks and benefits that are accessible beyond the company’s home state.

Redefine Benefits As Goals

To get started, it’s important to view benefits not as separate and individual perks, but rather as an integral part of each worker’s holistic lifestyle. This means incorporating needs that span their mental and physical health, their family, legal and financial matters, education goals, and professional and personal growth and development. The more their needs are met, the less workers have to worry about life outside of work. When an employer helps them become more  successful in life, the workforce becomes better engaged in the success of the company. This creates a win-win environment, and one in which the most intuitive and responsive employers will thrive.

The following are tips to help build a platform for a customizable benefit package:

  • Ask workers what they want and need. Start out with a multiple choice and open-ended survey, so you can truly listen to their ideas, fears, and benefits needs. This isn’t a one-time process. As you roll out new benefits each year or throughout the year, ask for feedback on how well they are working, what can be improved, and what benefits do not actually provide much value.
  • Define what you hope to accomplish with company benefits. Are you looking to recruit and retain quality employees? Is flash and innovation more important, or good value, or high utilization? Seek to provide benefits that align with your company’s corporate philosophy and workforce culture.
  • Identify critical benefits first, such as healthcare, life insurance, and a retirement plan. Look at each within the context of your workforce demographics, and devise various options that appeal to different populations. Review plan utilization trends and look for large segments of workers with specific needs, such as young people building a family, demographics that engage in certain types of lifestyle choices (e.g., smoking or outdoor exercise), or those nearing retirement age.
  • Consider what types of voluntary benefits would appeal to these varying demographics. 
  • Be prepared to communicate benefits all year round. Update or supplement “old school” tactics like email, packets of paper, and formal meetings. It is important to meet the expectations of younger adults, who use cutting-edge technology in their personal life and expect access to benefits and updates in real-time. Utilize mobile-friendly avenues to make the experience easy and relatable to younger generations and people working from home. Provide access to plenty of online resources, such as videos, tutorials, calculators, and self-service systems where they can research and engage in benefits on their own time.

Employers measure every quality in a new hire, from experience to skill set to education to temperament to career goals. It stands to reason that job candidates and incumbent workers judge their employers by a similar set of criteria. Buffet-style benefits that enable workers to pick and choose from a variety of options is fast becoming an industry standard. It may be time for all employers – large, medium, and small businesses – to retire the one-size-fits-all package and develop a platform of benefits that reflects the objectives and desires of today’s more mobile, diverse workforce. 

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