Voluntary benefits: A snapshot of employees' current views

Today’s workforce comprises employees from four different generations, each with distinct views when it comes to their benefits, communication styles and key concerns. As a result, companies are increasingly being challenged to meet their employees’ disparate needs and preferences. 

To get a better sense of how these different age groups view their benefits and their approach to deciding which ones to select, ARAG Legal Insurance recently surveyed 2,400 full-time employees representing Gen Z or Zoomers (ages 19-27), millennials (ages 28 -43), Generation X (ages 44-59) and boomers (age 60 or older). 

Related: Inflation could take a bite out of benefits spending

The results of the Multigenerational Workforce Study 2024 provides insight to help you guide your employer clients build voluntary benefits programs that better suit each workforce generation’s needs.

Employees’ most pressing concerns

When asked, “What keeps you up at night?,” financial stability was the resounding top issue for all employees, while worries about “future uncertainties” was also a top three concern across all generations.  

Overall, respondents said they were most concerned about: 

1. Financial stability (63%)
2. Future uncertainties (45%)
3. Work-life balance (39%)
4. Experiencing high levels of stress or anxiety (37%)
5. Their own health issues (35%) 

Despite these collective responses, there are some notable differences between generations:

• Younger generations (Gen Z and millennials) expressed greater concern about their financial stability than their more senior colleagues. 
• Members of Gen Z are more worried about work-life balance and are most likely to experience high levels of stress and anxiety. 
• Millennials are the most concerned about job security and complex family matters. 
• For Gen X and boomers, health issues loom large; both their own health and the health of family members. 

Employees express general satisfaction with benefits programs

The survey found that 69% of employees are “somewhat to very satisfied” with the benefits program provided by their current employer. Gen Xers and boomers are even more satisfied with their benefits than their younger colleagues. 

For those expressing dissatisfaction with benefits, almost two-thirds of employees cited high cost as the primary reason.  And there were some key generational differences as well:  

• Gen Xers and millennials are more likely to be dissatisfied because of costs than their colleagues.
• More millennials than other generations felt that their benefits were too traditional, i.e., their employers didn’t include newer benefits that they’ve heard other companies offering.
• Gen Z respondents were most likely to indicate benefit options were “limited,” “not customizable or flexible,” and “difficult to use.”

Voluntary benefits are not always well understood

When it comes to non-medical, voluntary benefits such as life insurance, financial wellness and planning services, pet insurance, or legal insurance, 61% of employees are “moderately to very/extremely familiar” with them. And it’s probably no surprise that boomers lead the “very familiar” category. 

Related: As Gen X turns 60, this generation doubts their retirement readiness

However, that leaves a somewhat surprising 39% of employees who say they’re “not at all or only slightly familiar” with these types of benefits.  One-third of Gen Xers feel there is a lack of communication about them. Younger generations point to benefit program complexity and being “too hard to understand” as impediments. These findings could spur clients to evaluate how they communicate their benefit offerings and the effectiveness of those efforts.  

Influences on employee benefits decision-making

According to the survey, other people’s opinions do matter when employees are faced with making benefit decisions. In fact, 40% of employees sought advice from a family member or friend when deciding on employee benefits. Gen Z is most likely to seek advice or opinions from their colleagues, friends or family members, with nearly two-thirds tapping into this trusted group of people for help. Understandably, boomers (18%) and Gen X (29%) are far less likely to seek outside opinions.

When it comes to making enrollment decisions, all generations closely evaluate the balance between costs and benefits. However, older generations are somewhat more price sensitive, while Gen Z and millennials are more likely to weigh the benefits offered more heavily than the associated costs. For millennials in particular, that means closely analyzing coverage and features. Gen X looks a bit more closely at staying within a budget, while boomers focus on how much use and protection a benefit will provide for their investment.

Interestingly, while there are typically several voluntary benefit options to consider, employees spend less than half an hour making their selections. Zoomers take the least time evaluating their options, spending an average of just 21 minutes — that’s less than highly experienced boomers at 22 minutes, budget-conscious Gen Xers at 25 minutes and analytical millennials at 26 minutes.

Communication preferences vary

When it comes to employees’ communication preferences for receiving benefits information, there’s a digital divide among workplace generations.  

The majority of employees across the board (70% of respondents) prefer to receive benefits communications via email.  Younger “digital natives” prefer to have their benefits information packaged and delivered electronically – material like digital booklets, online articles, and videos resonate, while older generations favor printed material. Millennials and Gen Z are also far more amenable to receiving open enrollment information via text. 

Surprisingly, even the “always online” generations see a place for traditional direct mail sent home – as it ranked third overall as a preferred way to receive benefit information. 

Also: Cost-sharing is key to choosing traditional plans, HDHPs and HSAs, say employees

The biggest gap in generational preferences centers on the use of smart technology.  For those who have never used AI-based tools to help review their benefit options, more than half of Gen Z employees were open to that option, while 73% of boomers said they were unwilling to try. 

Looking ahead

So, what does all of this mean for benefits advisors and employers? The ARAG study certainly shines a light on each generation’s preference to receive open enrollment and benefit communication in different media. It also underscores that employees of various ages have different levels of understanding of — and frustrations with — their benefits. There’s also room for improvement in heightening employee familiarity with their voluntary benefits – and the added value they can provide.

Some common truths emerged that employers can address as they evaluate their benefits line-up for their upcoming open enrollments. 

• Employees are understandably concerned about the costs of their benefits, but need to recognize the value as well. Helping them understand that having benefit options as a safety net (for “just in case” situations) is also valuable.
• Employees across the board continue to worry about their financial stability and future uncertainties. This provides opportunities to boost their financial wellness and overall well-being, by offering benefits like financial counseling, retirement planning and student loan repayment plans. Offering legal insurance can help employees plan ahead for milestones, like getting married or buying a home, and feel better prepared for future challenges. 
• Gen Z and Millennials report the highest levels of workplace stress — and both groups are more likely to identify as caregivers. Potential solutions? Continue to focus on recognizing the whole person  and give employees a place to turn with intuitive mental health programs. For caregivers, consider benefits that support their work-life balance as well as insurance options that help mitigate future risk, such as long-term care policies or legal plans.

The bottom line? Employees yearn to feel supported by their employers in both their professional and personal lives – and want their benefits to have the flexibility to reflect that. As one respondent who felt supported put it, “They provide me with tools that make my life easier.” 

It all represents a timely opportunity for you to help clients communicate more – and in a more targeted manner – about the real value their benefits deliver to employees as they face life’s challenges.  

Jen Beck is VP, Customer Experience & Insights, at ARAG, where she is responsible for the overall experience of ARAG’s members through the research, analysis, and evaluation of current processes and future trends of both consumer expectations and industry innovations.