Most of us already know that the one-size-fits-all approach to employee benefits is over. Evolving employee needs and employer priorities have changed how HR must approach benefit diversity. In addition, for the first time in history, five generations are in the workforce at the same time. Each has its own set of age-and-stage needs, values and ideas about benefits. As a result, many employers are adjusting to the challenges of meeting generational differences in the workplace to attract and retain talent. Here’s what you need to know.
Five generations in the workforce
First things first—the five generations in the workforce by percentage of workers are:1
- Traditionalist (born between 1925-1945) – 2%
- Baby Boomer (1946-1964) – 25%
- Generation X (1965-1980) – 33%
- Millennial (1981-2000) – 35%
- Generation Z (2001-2020) – 3%
Not surprisingly, what they want and need differ. Gen X and millennials are in a different stage of life from traditionalists or baby boomers—and this can affect their benefit needs, from out-of-pocket healthcare costs for routine or unexpected care to how they consider benefits as integrated with compensation.
In addition, generational differences in the workplace can affect the employer relationship. Many traditionalists may be more loyal to an employer and career track, while younger generations may prioritize employee or personal experience over role or company.
The state of the talent market also comes into play. The youngest two generations are most likely to leave as the Great Resignation continues. According to research, 53% of millennials and 36% of Gen Z employees plan to or are considering leaving their current employers within the next two years.2
Why benefit diversity matters
Given the complexities of generational differences in the workplace, savvy employers should consider how to create more benefit diversity. Flexible benefits can help employers balance coverage and cost while also more effectively meeting different benefit needs and expectations. This approach can also boost workplace well-being and decrease the risk of costly turnover. Happier, healthier employees are more likely to stay, be productive and be collaborative—across generations.
It’s not necessary to completely shift benefit strategy to create more benefit diversity. Complementary health insurance benefits* like ArmadaCare’s BeneBoost plan can be a cost-effective answer, layering over primary health plans to provide more meaningful coverage while managing costs.
Other plans, like WellPak by ArmadaCare, can be used to enhance coverage and support for mental health and make behavioral care more affordable. Fully insured supplemental health insurance plans like ComplaMed can reduce or eliminate common coverage voids while still being cost-effective.
Supplemental health insurance plans like these can be carved out for specific employee populations, giving employers a great deal of flexibility and helping them take key steps toward addressing the needs of their multigenerational workforce.
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2 SHRM, 2021