Matching benefits to your workforce demographics is not a new concept. But the key question is whether your employee demographics are changing and whether your benefits are keeping up. Adjusting your benefits to meet your employees’ changing needs can help boost their satisfaction and enhance your retention rates.
Until recently, baby boomers (those born between 1946 and 1964) made up the largest employee demographic. Today, millennials (those born between 1979 and 1996) outnumber baby boomers in the workplace. By 2020, millennials are projected to make up half of the employee population. However, while you focus on millennials, you can’t forget about Generation X (those born between 1965 and 1978). They may be a smaller proportion of your workforce, but they’re still important to your business. With companies struggling to find and keep the best talent, having the right mix of benefits is an important part of attracting, retaining, and engaging the growing segment of younger employees.
With so many generations in today’s workplace – often with competing expectations – the question becomes, “How do we build a competitive, cost-effective benefits program that’s also flexible enough to meet everyone’s needs?”
Benefits still play a critical role with employees
With the introduction of the Affordable Care Act and the changes it brought to the U.S. health insurance and medical benefits environment, some thought employers would move away from offering benefits as part of employees’ compensation. But benefits Setting a baseline continue to play a key role in helping attract, retain, and engage employees. The secret is finding the right mix of benefits to fit your workforce demographics. While medical and 401(k) plans remain foundations of many benefits programs, it might be time to consider adding some newer options:
- Financial wellness is gaining in popularity across generations. According to the Society for Human Resource Management, a growing number of workers are interested in financial wellness programs. These programs can help employees deal with everything from paying off student debt (which is important to millennials), to juggling elder care and college tuition (which is important to baby boomers and, increasingly, to Generation X).
* Society for Human Resource Management, 2014 Employee Benefits – An Overview of Employee Benefit Offerings in the U.S.
Your employees’ financial wellness directly affects their ability to perform in their jobs. In a recent survey, when human resource professionals were asked how personal financial challenges influence overall employee performance, 50% said they impact an employee’s stress and 47% said they impact an employee’s ability to focus.
- Workplace flexibility is popular with younger workers. Millennials want control over their personal and work schedules. This generation sees work and personal life as integrated, and they want the ability to get their jobs done as they see fit. For example, they may wish to run a personal errand in the middle of the day while still meeting their job responsibilities.
Flexibility also means the ability to work remotely to better meet personal and work needs. In fact, 70% of millennials don’t believe regular attendance is required at a workplace. Adding this kind of flexibility can increase employee satisfaction without increasing the cost of your benefits program.
- Take a broader approach to time off. While some larger companies offer unlimited vacation time, that may not be feasible for smaller businesses. However, some companies are merging all their time off together – into paid time off, or PTO – and allowing employees to determine how they use that time. This approach can be popular for millennials, who are seeking greater flexibility.
- Voluntary benefits make a great addition. Providing a broad array of benefits can be challenging and expensive. But voluntary benefits let you offer employees new programs without increasing your benefit expenditures, because employees pay the full cost of these plans. Voluntary programs such as home and auto insurance, employee purchase, and discount programs, allow you to appeal to everyone, no matter what their generation.
Keep it manageable
While creating a benefits program to meet a multigenerational workforce can seem overwhelming, consider these tips: First, offer your employees choices and allow them to build the benefits package that meets their current needs. Second, match the number of options that you offer with your employee mix. Too many medical or dental options can be overwhelming for employees – so make it simple by limiting their choices within each benefit..
Receive expert guidance from ADP®
Employee benefit needs are as unique as their personalities. When you’re not a benefits expert, deciding on what benefits to offer can be daunting. If you need assistance, ADP can help you determine the right mix of benefits to fit your employee demographics, your business, and your budget.
1 PwC, Millennials at Work – Reshaping the Workforce.
2 Purchasing Power, Money Smarts: Helping Employees Make the Grade.
3 Care@Work Blog, 8 Great Employee Benefits Millennials Actually Want.
- Health Care Reform,
- Research for Human Resources Professionals