What do you do when you have employees who range from ages 18 to 72? Employers today may be employing three or more generations and require strategies to keep each age group engaged. How do you create a benefit plan that satisfies everyone while keeping your company competitive?
What Generations are in the Workforce?
Today’s workforce includes five generations. The Bureau of Labor Statistics estimates that by 2024, 25% of the workforce will be over age 55, including workers who plan to keep working in their 60s, 70s, and 80s to support themselves and their families.
Each of these generations are distinct in their age and values which reflect the time period in which they were born:
- Traditionalists (or Silent Generation): Born before 1946
- Baby Boomers: Born between 1946 and 1964
- Generation X: Born between 1965 and 1976
- Generation Y, or Millennials: Born between 1977 and 1997
- Generation Z: Born after 1997
What Does Each Generation Value in their Employee Benefits Plan?
Employee benefit plans reflect the different values and stages of life each generation is living. Employers must tailor their plans to address the need of each unique group.
Traditionalists and Baby Boomers: Being retirement and security focused, these groups focus on pay, health insurance, and retirement plans.
Generation X: While more independent and technology focused, they desire a work-life balance, career advancement, salary, and matching 401(k) benefits.
Generation Y / Millennial: While still valuing career advancement, they are also lifestyle focused. Work from home options, control over their own schedules, wellness initiatives, and benefit plan choices.
Generation Z: Similar to Millennials, they also value career advancement and flexible work arrangements. Studies show that staged in the early part of their careers, they are also looking for mentoring and financial guidance to handle debt and personal finances.
How to Create Your Multi-Generational Employee Benefit Plan
Meeting the needs of every generation may sound like an overwhelming and expensive endeavor unless you approach it from a strategic standpoint. There are four steps to creating a plan that meets both your company’s goals and employees’ needs:
Define your company’s benefit plan goals.
Every company is unique. While attracting and retaining top talent may be the goal of some firms, providing plan choice or controlling costs may be the strategic goal for other companies. Clarifying your company’s employee benefit plan vision is the first place to start.
Understand your employee demographics.
While the US has five different generations in the workforce, your workforce will vary based on age, gender, health conditions, and other factors. Getting a complete view of who your employees are will help you hone in on the types of benefit programs you can offer. Your programs must also offer real choice and value to attract multiple generations, and should not just be what executives think their employees may want.
Decide your budget.
Your employees may deserve the most comprehensive benefit plans available but your financial resources will help you structure what plans are optimal. Health insurance is paramount, so finding the right cost effective plan is key to controlling your budget. Other desirable benefits like wellness are cost effective and enhance the culture.
Communicate your plan.
Your employee benefit plan should have a purpose that is clear to employees. Your plan reflects your company’s values and must be clearly communicated, explaining not just the details of the plan, but the purpose and intent behind it. Employee engagement has never been more important and a proper communication plan will help employees know that they are valued and supported.
Innovative Benefit Plans that Attract Employees
Recently, a small business owner used his company’s $36,000 credit card cash back fund to pay for his $36,000 employee benefits. The approach allowed the employer to attract employees, some with families, to his mission-based company where they enjoyed their work and got valuable benefits, creating a competitive edge for the company. While not a common practice, employers are looking for ways to optimize expenses and provide robust benefits for their diverse staff.
Addressing the needs of Gen Y and Gen Z’s student-loan issues, employers are creating innovative savings plans. Abbott Lab’s Freedom 2 Save program enables full- and part-time employees who qualify for the company’s 401(k)—and who are also contributing 2% of their eligible pay toward student loans—to receive an amount equivalent to the company’s traditional 5% match deposited into their 401(k) accounts. The twist is that program recipients will receive the match without being required to make any 401(k) contributions of their own, allowing them to use more of their earnings to pay off their student debt.
Designing a benefits program that factors age variables can be complicated. Woodruff Sawyer has extensive experience in designing benefit plans that serve diverse workforces. Contact your Account Executive for more insight into how you can mitigate costs while serving the needs of your intergenerational employees.