Family dynamics are changing and benefits need to change with it

Diversity, equity and inclusion – DE&I, for short – has become a rallying cry for employers.  From ensuring fairness in hiring, pay and promotions to cultivating a workplace free of discrimination, harassment and bias, organizations have launched countless initiatives. When it comes to benefits, however, less has been done to ensure current offerings are keeping pace with the evolution of family structures. If employers are to live up to the commitment they’ve made to workers and their families, their benefits strategy must evolve to reflect the composition of the 21st-century family.

The demise of the nuclear family

Throughout much of the 20^th century, the so-called “nuclear family” was considered the ideal. Popular sitcoms, like “Father Knows Best,” “Family Ties,” and “Family Matters” centered around the wholesome hijinks of mom, dad, and two or three kids. Occasionally, the families were blended, especially towards the end of the century when divorce became more commonplace. Yet, the depiction of a married heterosexual couple raising their own biological children exemplified the typical American family.

The storylines were contrived, but the demographic make-up of the family sitcom was fairly close to real life. As late as 1970, more than 40% of American families fell into the nuclear family category, according to the U.S. Census Bureau. For employers, this homogeneity made it relatively easy to structure benefit plans that would meet the needs of most employees and their families.

These days, it’s not so simple. People are waiting longer to get married or choosing not to marry at all. In 2019, more than one-third (38%) of American adults were neither married nor living with a partner according to a study by the Pew Research Group. In addition, many couples are waiting longer to start a family or remaining childless, either by choice or by circumstance. Since 1990, U.S. fertility rates have fallen across all major racial/ethnic groups. In 2020, the total fertility rate – the average number of children a woman would have in her lifetime – dropped to 1.64, the lowest level ever recorded, according to the National Center for Health Statistics.

Related: 7 best life transition points for introducing family and caregiver benefits

By 2020, just 17.8% of U.S. households were comprised of traditional nuclear families. Increasingly, sociologists are speaking in terms of the “extended nuclear family,” encompassing same-sex partners, domestic partners, grandparents, aunts, uncles, siblings, stepparents, foster parents or guardians – even pets. In addition, many people find themselves assuming a caregiver role for an ailing parent, grandparent or disabled relative, often while raising children of their own. These employee caregivers have unique needs that can’t be met by a traditional one-size-fits-all approach to benefits.

Evolving benefits strategies

The changing composition of the American household has led employees to request health coverage, along with healthcare navigation, clinical guidance and financial advisory services for members of their extended family at an increasing rate. This is going to require leading organizations to reimagine their benefits to ensure they can still deliver on the promise to help employees and their families live their best lives.

Granted, there are many barriers – including higher costs and legal issues in some jurisdictions – to expanding healthcare plans in this manner. Organizations should recognize the misalignment between some of their offerings and workers’ household needs, and seek ways to make their benefits more inclusive and flexible where possible.

Expanding coverage will not be enough.  Advances in technology drive personalization that connects employees to relevant benefits and resources, helping them maximize their benefits to meet their family’s unique needs. Employers also gain invaluable insights through data and analytics, giving them an unprecedented view into benefits usage and the ability to measure the ROI of their benefits spend. This personalized, tech-enabled approach results in a transformed benefits experience that drives increased engagement, more confident decisions and a greater appreciation for the company’s investment in their well-being.

Being mindful of DE&I means revisiting historical systems, programs and strategies to ensure they are beneficial to everyone. Benefits are the most tangible sign an employer cares about its employees and the people they hold dear. Yet the family structure emulating the American way of life and inspiring how benefits are designed is outdated and not reflective of the majority of 21st-century households. Organizations that evolve their focus to the modern American family will be positioned to attract and retain talent. That’s a significant advantage in this Era of the Employee when workers have ample opportunities to change jobs.

Meeting the needs of the 21^st-century family requires a broad, inclusive and personalized benefits strategy that is enabled by technology and analytics to meet employees in the moment with offerings that bring value to their lives.

Xan Daniels, Vice President, Inclusion & Diversity and Ali Cusic, Vice President, Diversity, Equity & Inclusion Product Strategy & Client Advisory Leader at Alight Solutions.