2020 workplace trend: The sunsetting of one-size-fits-all benefits packages

Today's employees are looking for a set of benefits options as diverse as the lifestyles they maintain.

Modern best practices in terms of benefits offerings are shifting from the traditional, overly broad, universal approach to become increasingly personalized. ”(Image: Shutterstock)

The year 2020 marks a new year, the turn of a decade and a smart time for employers to step back and reevaluate their business practices. As employers consider strategic moves for 2020, it is critical they reflect on not only their own business but review how the workplace landscape itself has changed and adapt their own practices accordingly. As the workforce ebbs and flows, business leaders must prioritize agility to ensure they remain competitive in the eyes of prospective candidates amidst the ever-tightening labor market.

Related: HR professionals face shifting priorities, challenges and opportunities

Moreover, it is obvious the workplace is an extremely volatile space, defined now, more than ever, by the entrance of new generations into the workforce, the introduction of technology and new capabilities, and the desire for customization in an increasingly opportunistic society. Employee benefits are a mirror image to this evolution. One-size-fits-all benefits packages are no longer attractive, and organizations must understand that not all employees will fit the traditional mold. Employees are looking for a set of benefits options as diverse as the lifestyles they maintain.

The traditional view of workplace benefits has evolved to become a vital part of an employer’s offering. While consistently perceived as a burden, workplace benefits have become a crucial part of a business as they play a significant role in attracting and retaining top talent in the increasingly tightening labor market.

Modern best practices in terms of benefits offerings are shifting from the traditional, overly broad, universal approach to become increasingly personalized. As there are increasing numbers of job switchers compared to new entrants, the workforce climate is more competitive than ever. In this vein, employers are pushing to attract these job switchers through robust and personalized benefits packages.

A multi-generational workforce

The workforce is rapidly changing with the entrance of new generations. Approximately 6 percent of today’s workforce is comprised of Generation Z, the youngest generation of workers, born in 1997 and beyond, and this number is growing rapidly.

Generation Z brings a new set of desires that require HR teams to alter traditional considerations when it comes to attracting and retaining talent. The usual HR toolkit, previously tailored for Millennials and Boomers, won’t necessarily apply to their younger cohorts.

Gen Zers are interested in more robust offerings, including financial wellness options, which mimics their different perception when it comes to earning and saving. As benefits today transcend traditional offerings such as health, dental and vision, when it comes to attracting younger talent, HR departments are looking towards more package options that fall outside of that vacuum – often extending across multiple disciplines in an organization: from payroll, to HR, to benefits and back.

Intertwining technological capabilities

Another arena that employers are exploring is how they can utilize technology to gain a competitive edge in the tight labor market. Employers can look to technology to further customize benefits plans, utilizing services that provide an array of options for employees to essentially “shop around” for their ideal package. Allowing employees to pick and choose options that cater to their personal needs is increasingly attractive as the workforce shifts to include younger generations and takes on a modern, more evolved approach.

Technology can be extremely helpful in staying atop of personalized benefits plans. As a result of extended offerings beyond traditional benefits packages, integrated HCM will be table stakes, as it enables data flow from payroll, to HR to benefits (a tangent to the expanded health/wellness benefits). While employers expand their health and wellness benefits packages to include flexible work hours and telemedicine benefits, they will also need to start considering how adaptable technology can make their data plan more seamless across their systems.

Further, employers can rely on technology to stay ahead of legal changes within the system. As new benefits options continue to proliferate, in parallel, so will benefits regulation. In order to keep pace, employers will need to self-educate frequently and rely on compliance solutions.

Changing work habits garner customization

The workplace is growing to reflect the real world: an opportunistic society where consumers have more choices than ever. In turn, the way we work is changing. There is a prevailing trend of the consumerization of benefits, much like the consumerization of apps, tech, etc. Employees, like consumers, now expect their benefits options to be diverse, evolving and available at their fingertips. Employers must be conscious to deliver on this expectation, mirroring the ubiquity of opportunity consumers experience outside the workplace.

For example, with the growing gig economy, the traditional 9-to-5 structure has disintegrated. To cater to top talent, employees must investigate options to personalize offerings for certain classes of employees, such as seasonal, full-time, part-time, salaried or hourly status, allowing flexibility. An agile approach to employees and their career needs is necessary to keep up with the evolving world of work.

Accepting a modern approach to benefits is critical. Employers should focus on adjusting benefits offerings to be:

As employers rethink their business approaches in 2020, they must consider persistent workplace trends and adapt accordingly to compete for top talent in the tight labor market. The ability to provide customization and flexibility over one’s own work structure is an increasingly critical factor to successful recruitment.

Bruce Whittredge is vice president of channel strategy at ADP.

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