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As more baby boomers retire, and Generation Z employees continue to enter the workforce, employers will need to adjust their company benefits to meet the needs and priorities of these young workers.
To Gen Z, benefits that focus on mental health are important. Younger workers place more emphasis on mental health support and resources—42% for both Gen Z and millennials versus 37% of Gen X and 28% of baby boomers,— according to a study from New York Life Group Benefit Solutions .
This generation's members face significant mental health challenges, but are also more proactive than previous generations about seeking support. Gen Z workers are looking for health benefits that include teletherapy, mental-health apps and employee-assistance programs over traditional health care offerings.
Gen Z workers are also searching for flexible work arrangements in an effort to have better work-life balance than previous generations. Most employees of this generation came into the workforce during or post pandemic, where remote work has become more prevalent.
On another front, in regard to financial wellness, every generation has different needs for their finances. According to Payroll Integrations' 2024 State of Employee Financial Wellness Report, millennials feel the most confident financially, with41% saying they feel completely financially stable, compared to 38% of boomers, 36% of Gen X, and 27% of Gen Z. Sixty-five percent of millennials also say they are in complete control of their finances compared to 59% of boomers and 54% of Gen X employees. Meanwhile, only 33% of Gen Z report the same.
For Gen Z, financial benefits will likely differ from those of the older generations. Many of these young workers are entering the workforce with student-loan debt, so they might value benefits such as repayment assistance and budgeting tools.
"[Companies] can focus on clearly communicating the value of their benefit offerings by connecting them to the real-life challenges employees face and demonstrating how different benefits can help employees achieve their personal and financial goals," Kristina Welke, head of strategy, solutions and marketing for New York Life Group Benefit Solutions, told Employee Benefit News editor Lee Hafner. "For example, against a backdrop of rising healthcare costs, employers can showcase how benefits like supplemental health insurance can help provide a financial safety net and cover unexpected out-of-pocket costs not typically covered by health insurance plans."
To gain insight into which benefits should get the most attention from employers, Welke adds that in today's evolving workplace, they should frequently check in with employees and gather data so they have the insights they need to add the right benefits to their comp packages.
"There are many tactics employers can use, including engagement surveys, online forums and other digital tools, but at the core, there needs to be a desire throughout the organization to put employees' voices at the center of decision-making," she said. "When employers tailor benefits to employees' needs and keep a constant pulse on their sentiments, this delivers improved outcomes for people and businesses."
Read more about how different generations prioritize their employee benefits.
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Why young workers struggle during open enrollment
HR software company Justworks surveyed more than 2,000 workers, focusing on how Zillennials (workers between the ages of 18 and 43) feel about open enrollment. Thirty-two percent said that they would rather apply to a new job than go through the trouble of selecting new health insurance, and 29% said they would rather do their taxes. More than half of Zillennials admit they have blindly chosen their health plan because they didn't understand the terms in any of the plans offered, while 46% reveal that they regret their open enrollment decisions. On the other hand, just 25% of Gen X and baby boomer workers feel they make uninformed health plan decisions, and 24% regret their health plan choices.
"Remember, individuals can remain on their parents' health insurance until they turn 26," David Feinberg, senior vice president of risk and insurance at Justworks, told Employee Benefit News' Deanna Cuadra. "When a young worker goes to select plans, it's often the first time they see terms like deductible and copay, in-network and out-of-network. Even if younger workers are familiar with their auto insurance or renter's insurance, the complexities and terminology of health-insurance plans can sometimes be a black box."
Notably, Zillennials know they need help deciphering their open enrollment options — in fact, 47% report relying on their parents to help them select a plan, according to Justworks. Gen Z is especially open to getting outside recommendations, with 57% sharing that their primary approach to health plan selection is asking others for their opinions.
For many companies, attracting and retaining talent is a priority, and these companies are looking to hire Generation Z employees, especially as other generations are retiring or moving up in the workforce.
"Gen Z brings unique values, priorities and expectations to the workplace that differ from those of previous generations," writes Cheri Wheeler, vice president and senior consultant at Kelly Benefits Strategies, in an op-ed for Employee Benefit News. "As their presence continues to grow, their perspectives on work, technology, and culture will greatly influence future work environments."
Understanding Gen Z employees and their priorities can help with recruiting and retaining these new hires. Some of their main priorities include benefits that support career growth and development, mental health, and greater work-life balance.
How Gen Z is using Tik Tok to connect over workplace matters
According to the World Economic Forum, 73% of Gen Z workers say their workplace expectations or behaviors have changed due to content they've seen on TikTok. From videos depicting someone sprinting to their favorite co-worker to share gossip they heard in the office, to clips of people expressing frustration at getting more work instead of better pay for excelling at their jobs, TikTok has become a convenient place for workers to share — and sometimes complain — about their professional experiences.
But amidst the somewhat satirical videos about how workers pretend to look busy in the office, or day-in-life posts showing how a person's day is consumed by their commute, it's clear that young workers are unhappy about the culture in their workplaces.
"These videos are almost some kind of hybrid form of unionism," Heather Walker, people scientist at Culture Amp, an employee experience platform, told Employee Benefit News senior reporter Deanna Cuadra. "Young people are coming together to say, 'I'm not the only one who's having these experiences.' And when you know it's not just you, you're more likely to say something."
How financial wellness needs differ across generations
According to Payroll Integrations' 2024 State of Employee Financial Wellness Report, older generations feel less supported in their financial wellness, with only 18% of Gen X (ages 43-58) employees and 16% of boomers (ages 59+) saying they feel completely supported by their employers. Millennials (ages 27-42) feel the most supported by employers at 43%, with Gen Z (ages 18-26) closely following with 30% saying the same.
"Employers need to consider the needs of every generation when developing and investing in employee benefits and financial wellness programs," writes Doug Sabella is the CEO and co-founder of Payroll Integrations in an op-ed for Employee Benefit News. "At different stages of life, it's no surprise that employees have different priorities, but employers need to not merely guess at what's important — they need to know by having conversations with employees."
These are the most important employee benefits across generations
The Bureau of Labor and Statistics reports that the annual cost of benefits per employee is $23,696 in the private sector and $26,226 for civilian workers, and 78% of employees said benefits packages are a reason they are more likely to stay with an employer. Essentially, every benefit counts, so it's good to have a handle on what employees of different ages and life stages want.
"The workforce today comprises [multiple] generations, each with distinct experiences, yet within this generational framework lies a diverse range of individuals with unique needs and perspectives," Kristina Welke, head of strategy, solutions and marketing for New York Life Group Benefit Solutions (NYL GBS), told Employee Benefit News' Lee Hafner. "By understanding these generational nuances and offering a flexible benefits package, employers can create a more engaging and supportive workplace for everyone."
NYL GBS looked at feedback from 1,020 working adults across all five age brackets and found a few common threads: All generations prioritize retirement savings, though more older employees (77% of Gen X and 84% of baby boomers) ranked it as a must-have compared to younger workers (61% of Gen Z and 73% millennials). Unsurprisingly, flexible work arrangements also ranked among the top five most-wanted benefits for each group.
