Diversifying benefits offerings: A Q&A with Katie Pfeifer

New college graduates are entering the workforce and are reviewing specific details of job offers, education on maximizing benefits and financial offerings from their potential employer.

With so many benefits being underutilized or overlooked due to a lack of awareness, prioritization, or the proper education, Katie Pfeifer, head of workplace solutions at Cerity Partners, believes it’s important to discuss how employers should diversify their offerings to meet the needs of the new wave of college graduates entering the workforce.

Many employers are preparing for a new wave of college graduates to enter the workforce this summer. How should workplaces diversify their benefits offerings to meet this new generation of workers’ needs?

Many young professionals are seeking financial education early and are showing an interest in saving much earlier than previous generations. To meet their needs, workplaces could diversify their benefits offerings by providing targeted benefits that align with their current life stages. Key strategies include offering student debt repayment assistance, establishing partnerships with banks for first-time homebuyer loans, and implementing robust educational programs to encourage early adoption and appreciation of benefits beyond just their base pay. This approach could help new graduates manage their financial responsibilities while building a secure financial future.

As college tuition costs rise, debt management-driven offerings and advice take on an important role in next gen workers’ benefits programs. What other offerings are in high demand among this demographic?

In addition to debt management-driven offerings, next-gen workers highly demand comprehensive financial education programs, retirement planning resources, and Health Savings Accounts (HSAs). Financial education programs that focus on budgeting, saving, and investing can empower young employees to make informed financial decisions, including maximizing workplace benefits. Retirement planning education is also crucial, emphasizing the importance of 401(k) plans, employer matches, and the benefits of starting to save early. Lastly, information on HSAs, including their triple-tax benefit and how they can be utilized for both immediate health care expenses and long-term savings, is highly valued by this demographic.

Like any group of employees, the next generation has their own unique values and preferences when it comes to building wealth. What are the opportunities and challenges you’re observing when it comes to working with the next gen?

The next generation presents both significant opportunities and challenges in the realm of wealth-building. This group is more financially aware and interested in starting their wealth-building journey early, seeking quick returns and fast money. This early engagement allows for the implementation of long-term financial strategies from the outset of their careers, which employers can facilitate through long-term incentive plans and comprehensive benefit packages. Their comfort with technology makes digital tools and resources highly effective for financial management, enabling them to track spending, saving, and investing digitally. Additionally, they show a strong interest in socially responsible and impact investing, aligning their investment choices with their personal values and social causes they care about. However, challenges remain.

Despite their early interest in financial management, there is a noticeable need for enhanced financial literacy to help them understand complex financial concepts. Moreover, their focus on immediate financial gains often leads to job hopping and a lack of holistic view regarding their benefit plans, focusing primarily on base pay. Overcoming skepticism towards traditional financial institutions is another hurdle, as many young workers prefer personalized, transparent advice tailored to their unique situations. Employers can play a crucial role in addressing these challenges by offering robust long-term incentive plans that not only encourage retention but also promote a more comprehensive understanding of financial wellness beyond base salary.

Whether employees are just starting their careers or sit at the top, are you observing any similarities as it relates to the benefits and types of advice workers across all stages of their careers seek?

Yes, there are notable similarities across career stages in the benefits and types of advice sought by employees. Regardless of their career stage, employees consistently appreciate actionable, personalized financial advice that addresses their specific needs and goals. Additionally, retirement planning is a common interest among both entry-level and senior employees, though the focus may differ; younger employees are more concerned with accumulation, while senior employees focus on decumulation and maximizing their retirement income.

Comprehensive health insurance and wellness programs are also universally valued, as they contribute to overall wellbeing and financial security. These similarities highlight the importance of offering versatile benefits packages that cater to the diverse, yet common, needs of employees at all stages of their careers.

Talk to us more about senior-level talent. What are you observing as it relates to their benefits?

Senior-level talent exhibits a high demand for tailored financial advice that addresses the complexity of their compensation packages, which often include stock options, deferred compensation, and performance bonuses. The need for Executive Financial Counseling is crucial for them to effectively manage and optimize their unique financial situations. Additionally, there is a significant focus on retirement readiness, with strategies aimed at pension maximization, Social Security optimization, and comprehensive estate planning. Tax efficiency is another critical area for senior executives, who seek investment strategies designed to minimize liabilities and maximize after-tax income.

This demographic desires a solution that allows them to focus on running their businesses without worrying about their finances. They show a strong preference for comprehensive solutions that provide a single point of contact for a wide range of financial services, ensuring a cohesive and streamlined approach to managing their financial lives. Furthermore, many senior executives are interested in integrating philanthropic planning into their overall financial and estate plans, reflecting a desire to incorporate charitable giving as part of their legacy.

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How about mid-level employees? As they start accumulating more disposable income, how should employers tailor their benefits offerings to meet this group’s evolving financial pictures?

As mid-level employees begin to accumulate more disposable income, employers should tailor their benefits offerings to support their evolving financial needs. This can be achieved by providing access to diversified investment options, which go beyond traditional retirement accounts and include a broader range of opportunities to grow their wealth.

Additionally, employers should offer family-focused benefits such as an education savings plan match and enhanced life insurance options to support their growing families. Health Savings Accounts (HSAs) should be highlighted for their dual benefits, serving both immediate health care expenses and long-term savings needs. By focusing on these areas, employers can effectively address the unique financial situations of mid-level employees and help them achieve their financial and career goals.