How Generational Preferences Are Redefining Workplace Benefits
The Covid-19 pandemic disrupted many aspects of workplace benefits. It affected how workers learn about, enroll in and utilize their benefits. It accelerated the use of digital solutions. It also surfaced new insurance and related needs that can be addressed through workplace benefits.
At the same time, workers are reevaluating what they are looking for in their jobs, balancing salary, benefits, and other elements to assess employers. Work-life balance, the ability to work remotely and participate in hybrid work models, and employers’ commitment to social causes, such as diversity, equity and inclusion (DEI), are now considerations in the new world of work.
As these trends converge, workers think differently about their benefits and what benefits are most important to them as they evaluate their current employers and consider new ones. Consequently, employers must rethink their benefits packages and realign them to meet the needs of today’s workforce. In the competition for talent, a new approach is required to think about benefits across five categories of needs: financial, physical, mental, professional and societal. New research from LIMRA and Ernst & Young (EY) shows how this framework can be used to help employers address the holistic wellness needs of the workforce.
Holistic Wellness Needs
Financial benefits are those offerings that promote economic security and resilience, and include benefits such as retirement savings, life insurance, disability insurance and supplemental health benefits (accident, hospital indemnity, critical illness, etc.). Physical benefits include those products and services to help workers stay healthy and physically fit, and include medical insurance, dental insurance and gym memberships. Mental benefits are those offerings focused on mental and emotional strength and resilience, and include employee assistance programs (EAPs) and mental health benefits. Societal benefits provide workers opportunities to contribute to the community and include corporate volunteering and donation-matching programs. Professional benefits are the resources and tools that workers can leverage to support performance and career development, and include formal training programs and tuition reimbursement programs. Utilizing the “Wheel of Wellness” (Figure 1) can help organizations reimagine their benefits packages to address the changing needs of today’s workforce.
Workers value the five dimensions of the Wheel of Wellness differently, with generational differences being the most pronounced. When asked to allocate 100 points among the five dimensions of wellness benefits, these differences become apparent (Figure 2) and surface many insights into how workers of different generations view their benefits needs.
Figure 1. The Wheel of Wellness
While all generations value financial wellness benefits, the underlying needs and most relevant solutions vary. Younger workers express more interest in student loan assistance and debt management counseling, while older employees prioritize income protection.
Baby Boomers place the highest value on physical wellness benefits. Medical and other health-related benefits, such as dental and vision coverage, are high priorities for them.
Generation X prioritizes physical and financial benefits. Many of these workers are in their prime earning years and are focused on building and protecting income and assets, while at the same time valuing benefits that address physical wellness needs.
Millennials express the broadest range of needs across the wellness categories. Career development services, wellness programs and emergency savings benefits are almost as important as paid leave, vision and life insurance to Millennial workers.
Generation Z values mental wellness benefits more than other generations. They view mental health benefits as important as dental and medical insurance.
Societal wellness benefits show an incremental increase in value among younger generations. That’s not surprising given that the pandemic caused many workers to rethink their personal purpose and the role of work in their lives, and that perspective carried through to their views of their employer and the benefits they provide. Benefits that allow workers to contribute to broader society are becoming increasingly relevant. This perspective expands beyond the specific benefits that employers provide, as workers also consider employers’ diversity, equity and inclusion (DEI) initiatives and other social causes in their choice of employers.
Figure 2. The Wheel of Wellness by Generation
Utilizing the Wheel of Wellness has several advantages. It allows organizations to align benefits to the needs of their workforce based on generational makeup. According to U.S. Bureau of Labor statistics, Generation Z and Millennials currently comprise more than half of the workforce and are expected to grow to more than 60 percent of the workforce by 2031. Benefits programs largely designed for the needs of Baby Boomers and Generation X don’t necessarily meet the needs of Generation Z and Millennials. Employers will need to evolve their benefits packages and delivery models to fulfill their talent needs today and tomorrow.
The wheel is real. For insurers and other benefits providers, the priority must be to develop more flexible offerings that can be modified to meet changing needs at different life stages and deliver them in an engaging way that resonates with the workers of the future.