Thinking more strategically about the life stage or generation of your employees may help you personalize your benefits offering at a time when you’re trying to attract and retain workers.
A Principal® business owner survey found that employee turnover hit record levels, with more than one-fourth of businesses reporting increased turnover—from as low as 11% in 2015 to 20% in 2021. Seventy percent of small and midsize businesses said employee benefits help them recruit qualified employees, and more than 70% say benefits are critical to helping improve retention.
How do you know what benefits to offer?
If you have four to five generations of employees, how do you choose benefits, policies, plan provisions, and perks? Or if your employees are heavily concentrated in one generation, what benefits might have the broadest appeal to that group?
“Listen to employees and try to understand what they want and need,” says Mark West, national vice president of business solutions at Principal. “They’ll appreciate that you asked for their input.” Focus groups and surveys can help ensure you have a competitive benefits package.
First, a bit of insight into each generation:
- Gen Z (born after 1996): The oldest of Gen Z had just gotten jobs when COVID-19 hit and were let go or furloughed. Job security and traditional benefits may be more important than it was for previous young generations of workers.
- Millennials (born between 1981 and 1995): If they don’t make up the majority of your workforce now, they soon will. Generally, Millennials are growing their families, paying student loans, and buying homes.
- Gen X (born between 1965 and 1980): This group is the backbone of the workforce right now. They’re also at an age when they may be in a tough spot financially, covering their children’s education or taking care of their parents—or both.
- Baby Boomers (born between 1945 and 1964): Many Boomers are retired or nearing retirement so they don’t make up a huge percentage of the workforce. But some Boomers are continuing to work, full or part-time, well into their sixties.
Below are some suggestions by generation (in no particular order), though the benefits and perks could appeal to any life stage.
The benefits all generations want
- Health insurance: It’s no surprise that the number one benefit workers want is health insurance coverage, and that’s across a wide range of demographics.1
- Retirement: Another popular benefit, regardless of life stage, is retirement plans. To appeal to younger generations who don’t have a financial advisor, you could offer target date funds as an option in their retirement plans.
- Financial education: While all generations may be interested in financial wellness, their educational needs may be different. Generally, Gen Z may want to learn about budgeting, saving, and managing debt and finances. Baby Boomers may be more interested in understanding Social Security, Medicare, retirement income, and estate planning.
Health and family planning benefits by generation
Gen Z: Mental health benefits and programs, lower premium and out-of-pocket cost for health insurance, fitness club membership or workplace gym, pet insurance
Millennials: Mental health benefits, fitness club membership or workplace gym, paid parental leave (across gender identities), Flexible Spending Account (FSA) for childcare expenses, assistance with building families (adoption, infertility coverage), vision and dental insurance, pet insurance
Gen X: Paid parental leave (across gender identities), caregiving benefits or leave, voluntary coverage (life, long-term care, critical illness, accident insurance, hospital indemnity)
Baby Boomers: Fitness club membership or workplace gym, vision and dental insurance, voluntary coverage, caregiving benefits and leave, discounts on health services (e.g., chiropractic care)
Financial planning benefits by generation
Think about flexing these benefits for your workforce’s life stage. For example, while student debt repayment assistance may be important to a lot of your employees, for those starting careers with the weight of student debt on their minds, it might be a tipping point to take a position with your business.
Gen Z and Millennials: Student debt repayment assistance, tuition reimbursement
Gen X and Baby Boomers: Life and disability insurance, will preparation services
Work-life flexibility and training benefits by generation
A flexible work schedule is table stakes for today’s workforce. And business owners are acting accordingly: Nearly three-quarters of businesses say their remote and hybrid work arrangements will be permanent, according to the 2022 Principal Financial Well-Being IndexSM.
Gen Z and Millennials: Flexible work schedules, hybrid/remote options, training and education, skills development, casual dress code, ability to buy (or get) more time off
Gen X: Flexible work schedules, ability to buy (or get) more time off
Baby Boomers: Benefits for part-time employees who want to “ease” into retirement
The importance of personalization and choice
- Personalization of benefits is another way to appeal to a multi-generational workforce. West has two family members who work for businesses that offer a set amount of money to use as they want for wellness. “They can use the funds toward a new tennis racket, fitness watch, golf clubs, massage—whatever helps them the most. They turn in their receipts and are reimbursed for the expense,” West says.
- “Choice” can also mean having more than one plan to choose from. For example, offering two dental plans may allow you to offer orthodontia coverage (for a higher premium) in one plan, which may appeal to employees who have preteen children.
- Think of your size as a way to stay nimble. “You may think you don’t have the resources to do as much, but you may have a better opportunity to customize benefits to your workforce vs. what bigger companies can do,” West says.
What's next?
See how your benefits compare to businesses like yours with the Principal® Benefit Design Tool.
