Designing Benefits for the Generations

For most of us, understanding how to develop and promote superior benefits packages for today's age-diverse workforce is a bit like talking on the phone, texting on our PDAs, and checking e-mail on our laptops — all at the same time. In other words, it is complicated, requires concentration, and demands that we keep track of our various and simultaneous audiences, lest we send the text to our client that should have gone by e-mail to our colleague. Employers today, along with their HR managers, must navigate a complicated workplace comprised of four generations of workers for the first time in American history. To help our business clients meet this multi-generational challenge, we must become experts at multi-tasking, developing a deep understanding of the needs and desires of both younger and older employees, and assembling flexible benefits packages that target multiple goals at once.

According to the U.S. Bureau of Labor and Statistics, the older labor force is projected to grow more than five times faster than the overall labor force by 2016. By 2014, nearly a third of the workforce will be age 50 or older. In fact, by 2011, Baby Boomers — those born between 1946 and 1964 — will make up almost 40 percent of the country's workforce. At the same time, almost 7 million members of the Traditionalists or World War II generation (those born before 1945), will still be at work. Generation X-ers, born between 1965 and 1980, will comprise 32 percent of the workforce by 2014, and members of Generation Y (or the Millennial Generation), born between 1980 and 2000, will make up approximately 25 percent. While this data is national in scope, the predictions apply in broad terms to Florida's employment situation as well.

Facing financial pressures, economic uncertainty, and a desire to remain active and social, people are working longer, a fact that is radically altering the workplace dynamic on a variety of levels. At the same time, employers are confronting their own financial pressures and economic uncertainties. As they work to manage and retain employees with different goals, experiences and even values, they are searching for benefits packages that are rewarding and helpful to everyone.

Unique Perspectives

The first step in developing benefits for this new workforce is to truly understand the unique perspectives of each audience. While it is important not to stereotype, there are some basic differences — and similarities — between each generation and their experiences that guide their perception of what is valuable and necessary, and what is superfluous or even burdensome. As employers look to operate with lean budgets and quality staff, they are asking benefits managers to do more to establish perceptible value with less, and so the job of demonstrating knowledge and understanding of generational trends is critical for agents and brokers.

As the largest segment of the employment market today, Boomers have been the target of analysis and marketing for some time, and their interests and preferences are fairly well understood. A recent AARP study, Leading a Multigenerational Workforce, suggests that Boomers intend to “revolutionize retirement” by continuing to work well into their golden years, by finding new careers late in life, and through investment strategies. In general, this group values and expects good benefits, and because they are advancing in years, they worry about having the right health insurance. Many are also taking care of aging parents.

Members of Generation X are, as a rule, more concerned with salary than benefits. Like the Generation Y-ers who follow them, they are more focused on shorter-term goals than Boomers and tend to expect less from their benefits. As AARP suggests, Generation X-ers are more self-reliant and more concerned with getting results fast by simplifying processes. They helped revolutionize the use of technology, and were in turn changed by it.

Members of Generation Y, because of their age and the influence of the Internet, demand quick results. They expect a great deal from their employers, but in general have not made the connection between their employment expectations and their benefits packages. As a group, they seem to view benefits as less valuable and less connected to their overall career goals. Generation-Y members tend to change jobs frequently, and as AARP writes, “they can notify thousands of their cohorts about which companies match or fall short of their ideals” with the click of a mouse.

The smallest segment of the workforce is still having a big impact on organizational decisions. Millions of World War II generation workers are on the job, and their view of benefits was in many cases shaped in a very different era. They value experience and reputation, and are often accustomed to having comprehensive health benefits. Given their years, they are worried about health care, long-term care, and retirement benefits.

Concierge Packaging

Given these multigenerational factors, a “one size fits all” approach to benefits no longer registers in the workplace. Understanding the impact of generational differences is key to developing a strategy that appeals to employees and also gives employers an edge in the competition for talent. Therefore, after becoming experts on the generations, including their expectations and needs, we must establish benefits packages that are flexible and include a variety of options. At the same time, we must let employers know that we can help communicate the value of these benefits in a way that can engage, inform, and influence employees — who all have different ways of communicating and different levels of expectations.

Ultimately, benefits for the multi-generational workforce should encompass a wealth of options, including voluntary benefits that can be embraced by some and passed over by others. Auto and homeowners' insurance, life insurance, paid time off, dependant loan scholarships, dental and vision plans, long-term care insurance, and even pet insurance are options that appeal differently to different age groups.

The multiple options approach is certainly not new. However, what must be new is the way that these options are packaged. By combining health insurance, retirement/investments, disability insurance, and voluntary options into packages or portfolios that may correlate to age groups, we can simplify the often complex process that employees face at open enrollment.

Boomers, for instance, may prefer a package that includes a lower-deductible, higher-premium PPO, an aggressive 401(k), and dental and vision care. Generation X-ers, who may have young dependants, may also opt for a package that includes comprehensive health coverage with low deductibles, along with the option of maximum life insurance coverage. They also may appreciate other options, such as homeowners' insurance. Generation-Y members may prefer a lower-premium, higher-deductible consumer-driven health plan, and with no dependants or home ownership issues, may be encouraged to invest in retirement savings. Those in the World War II generation may choose a package that includes a higher-premium health plan, and they may want a disability option as well.

While it is important to offer the right packages, it is also critical to know how to communicate options to employees. Older employees may benefit from direct one-on-one and group meetings to review benefit options, whereas younger employees will look for online tools to research the pros and cons of health insurance and retirement/investment plans. Outreach to younger employees should be aggressive, so that they clearly understand the value they are receiving from their benefits. In the end, showing employers that we understand the vital nature of communication can make the difference.

As we research benefit trends online, answer our e-mails, and place that lunch order over the phone, it is important to remember an important new reality: Multi-tasking is not just part of our work day. By necessity, it should be part of our overall philosophy of serving a new multi-generational workforce.

James Shepherd is the associate vice president of benefits for AlphaStaff Group, Inc. Dorothy Miraglia is director of client solutions. The PEO provides HR services including benefits, HR counseling, technology integration, payroll, tax, accounting, risk management, and training to small and mid-sized businesses. Company information is available at 888-335-9545 or
www.alphastaff.com.