Building benefits plans with cross-generational appeal

Employee benefits remain one of the largest factors in employee retention, and today’s multigenerational workforce requires employers to develop robust and flexible employee benefits packages. Building that package becomes more complex when you consider the differing wants, needs, and expectations of Generation X (Gen X) and millennials (Gen Y), which comprise most of today’s workforce.

Any employer concerned with employee retention and attraction will need a variety of resources and support to create a game-changing program.  Both Gen X and millennials see a robust benefits package as a display of the level of care and importance a business places on its workforce. Remembering that employee benefits encompass more than traditional health, dental, and vision plans, here are a few tips for creating a benefits package with cross-generational appeal.

Financial factors

Both generations place a high value on career development and professional growth. A formal career progression plan and continuing education or training opportunities will help attract and retain both. A Gallup survey cited opportunities to learn and grow as one of the elements causing a decline in employee engagement. Review your programs for areas where you can improve offerings.

Gen X values financial literacy and retirement plans with employer matching along with education to help them make more informed choices for retirement savings. The annual retirement confidence survey by the Employee Benefit Research Institute shared that employees’ confidence in living comfortably in retirement has declined considerably in 2023 compared to 2022.  Offering retirement plans, including matching contributions, will help your Gen X employees feel valued.

Student loan repayment or contribution plans are another way to entice talent. Gen Y workers are paying back student loans. Statistics from Education Data Initiative show that Gen Y has more individuals with student loan debt than previous generations. Thanks to the Consolidated Appropriations Act of 2021 extending a provision from the CARES Act, employers can offer employees a student loan assistance benefit of a tax-free maximum of $5,250 per year through the end of 2025.

Work-life balance

Both generations desire flexibility, and many studies have concluded that it has great value. Employees juggling responsibilities with children, aging parents, and other obligations outside of work require flexible work schedules with the option of working remotely or having a hybrid schedule.

Mental health and wellness are important for both generations. A study published by the American Journal of Epidemiology in 2021 found that both generations showed poorer health and more depression and anxiety than previous generations. Providing an employee assistance plan and wellness programs that include education, supportive tools, and resources will be great additions.

Gen Y is starting or raising a family. Providing a dependent care flexible spending account and an adoption or a childcare assistance program are excellent options. Various articles and studies indicate that organizations that offer benefits promoting work-life balance increase employees’ attachment to their employer. Both generations demand paid time off for balance and recharging. In states where paid time off is not mandated, employees appreciate policies and programs where time off is encouraged and paid.

Other generations

Generation Z (Gen Z) is between the ages of 11 and 26. Looking ahead as they begin entering the workforce, their interests may include tuition reimbursement or student loan repayment plans, commuter benefit plans, flexible work arrangements, career growth opportunities, and companies with modern technology.

Baby boomers are finishing their working years and looking forward to retirement with the goals of physical, mental, and financial health. They are most interested in quality health insurance, wellness programs to support good health and wellbeing, and financial planning resources.

Related: 5 generations of employees share their real open enrollment wants and needs

Understanding the types of benefits valued by employees of each generation is important in creating a robust benefits package. Employees may not expect an employer to fully fund every benefit, but will appreciate having options and variety available to them. When considering adding, changing, or removing benefits, employers must understand their compliance obligations regarding documentation and providing employees’ notice.

Angela Surra – Principal Benefits Expert at Mineral