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If you’re like most employers these days, your workforce is comprised of four distinct generations whose ages are separated by as many as 50 years.
On the plus side, that diversity provides a wealth of expertise and talent to enrich the organization. But it also poses management challenges, high among them the need to ensure a benefits strategy that reflects each group’s particular financial goals and concerns.
Given that demographic spread, the “one size fits all” approach to plan design has become an anachronism.
A tailored menu of voluntary benefits has become an increasingly attractive way to meet the shared need for cost containment and risk mitigation. Understanding the diverse needs of each group shows the way:
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Aged 70-plus and 2.4 percent of the workforce, the Matures are still working because they want to. They also aim to accumulate more savings for their eventual retirement. Matures are likely candidates for critical illness coverage and portable health plans, where benefits and rates remain the same after retirement. As they become more adept with the digital economy, identity theft protection has tremendous value.
Big team players and a vocal force, Baby Boomers (aged 52 to 70 and 28.9 percent of the workforce) measure their success through work and want to ensure they’re saving enough to retire. Like the Matures, they will find value in critical illness coverage. But hospital indemnity plans also play well with them as a way to offset the deductible and co-insurance obligations of a hospital stay. Their more aggressive use of social media (and activities like online dating) also makes identity theft protection important.
Achieving work-life balance is key to Generation X (aged 37 to 51 and 34.1 percent of the workforce) and it can be a challenge. Not only do they want to buy a home, but they likely are supporting children (who may have boomeranged back home) and sometimes parents. Given their concern they can’t provide for everyone, life insurance and critical illness coverage are attractive benefits, as are accident and group auto and home insurance.
Millennials, or the Y Generation
The largest generation in today’s workforce (34.6 percent), the 14- to 36-year-old Millennials are more concerned than any other about their finances. They typically have less than $1,000 in savings and are graduating college with a lot of debt. Benefits that will appeal to them will help them manage their new responsibilities: If they have no credit or bad credit, an employee purchasing program with financial wellness tools will enable major purchases. Student loan repayment programs are also increasingly popular. Group home and auto insurance are valuable to these first-time responsibilities, along with guidance for their decision. And this generation is risk aversion but active, making voluntary accident insurance also attractive.
Understanding the nuances among each group is key to developing benefits strategies that will meet everyone’s goals and needs and also support the drive to recruit and retain the best and the brightest.
That’s most effectively accomplished through a three-year strategy that phases in enough products each year to satisfy, but not overwhelm employees. The first year, for example, might include accident and hospital indemnity. The second? Identity theft and permanent life. And the third could encompass legal coverage, auto/home, employee purchasing and pet insurance.
However, the strategy shakes out, it must reflect corporate goals as well as a sound understanding of your workforce’s particular demographics and the hot buttons with a benefits solution. Soliciting and responding to employee feedback is key, and it will take education and guidance via channels tailored to each generation’s habits and preferences to promote optimal buy-in.
Getting it your multi-generational benefits planning underway now is the smart thing to do. After all, Generation Z is right around the corner. This group will comprise 20 percent of the workforce starting in just three short years – so the complexities will only grow.
This piece was originally published here on the SHRM Blog. Its author, Heather Garbers, is Vice President of Voluntary Benefits and Technology for Hub International, where she is responsible for driving voluntary benefits sales and strategy. She is also responsible for partnering with clients to build optimal enrollment and communications solutions that enhance employee understanding of and engagement in voluntary plan options.