Each generation of workers has their own
The importance of this can't be overstated for employers, especially when 49% of them believe they're in complete support of their employees' financial wellness — but
According to Payroll Integrations'
Employers need to consider the needs of every generation when developing and investing in employee benefits and financial wellness programs. 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.
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Here are three ways employers can ensure their benefits and financial wellness programs are addressing employees' needs:
1. Identify employees' pain points and how they differ across generations
While
Millennials, for example, feel the most confident financially, with 41% saying they feel completely financially stable, compared to 38% of Boomers, 36% of Gen X, and a mere 27% of Gen Z. Sixty-five percent (65%) 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.
Gen Z workers are the newest to the workplace, which means they have had the least amount of time to earn and save money. For companies with a predominantly large amount of Gen Z employees, implementing benefits that offer this group the most direct, short-term value to help them with the rising cost of living is most impactful. For the older generations that feel more financially stable, long-term financial support through options like retirement can help them to feel even more secure.
Employer and employee conversations on financial wellness priorities and benefit needs shouldn't be one-and-done — they should be ongoing and happen every year at the very least. The economy and employees themselves will change, and their financial priorities will change as well.
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2. Invest in the benefits employees care about
With the right knowledge, employers can make strategic investments to improve employee financial wellness, and do it effectively across generations.
For example, all workers — despite their generation — name healthcare (72%) and retirement (73%) as the two benefits most important to their financial wellness. The benefits that employees rank next vary across generations.
Forty-four percent (44%) of Boomers rank pensions as their next most valued benefit and 46% of Gen X workers say additional compensation like bonuses and stock options are most important, following retirement and healthcare. It's clear that older generations are prioritizing their long term savings, while Gen Z and millennials are particularly focused on benefits that prioritize their lifestyles and impact their overall cost of living.
Thirty-one percent (31%) of millennials are looking for health savings accounts (FSA/HSA) amidst rising healthcare costs and deductibles, and 38% of Gen Z employees say lifestyle compensation benefits are a top priority, including reimbursements for commuting and wellness.
With insight into the financial wellness needs of each generation they employ, HR leaders can prioritize the programs that are most important to employees. This allows employers to focus their investments on the benefits and programs that they know employers will actually use, instead of trying to offer a bit of everything. Employers may even be able minimize investments in some benefits if they're not of interest to employees.
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3. Consider prospective employees — and their generations — as part of benefit planning
It's critical that employers make benefits and financial wellness decisions based on the needs of their current employees to retain their top talent. But, they should also consider the needs of prospective employees, and how they can keep their offerings competitive in the market.
Employers should be especially tuned into Gen Z, the newest addition to the workforce. They're more mobile, plugged in, and informed — and also the most in need of boosted financial wellness. Attracting the best talent often means attracting some of the youngest professionals.
Beyond retirement and health insurance, Gen Z workers say their top reasons to not accept a job are a lack of student loan/tuition payment assistance (27%), life insurance support (27%) or lifestyle compensation (24%). If employers can't provide competitive benefits that meet Gen Z workers' needs, especially at a time when many of them struggle with the cost of living, they'll look elsewhere.
In attracting more mid-senior level talent, companies should keep millennial and Gen X workers' non-negotiables in mind. Thirty-three percent (33%) of millennials say that they would not accept a job if health savings accounts (HSA/FSA) were not available and 25% say the same about life insurance support. For Gen X employees, 44% say additional compensation like bonuses and stock options would make or break a job offer and 26% would not take a job without a pension plan.
Of course, the most straightforward way to improve employees' financial wellness is to simply pay them more. While raising wages is certainly a valid strategy for staying competitive in the labor market, small-to-medium-sized organizations may be limited in how much they can invest into their direct wages, no doubt already their highest expenditure.Benefits and financial wellness programs that are custom made for employees across generations can be a significant source to retain and recruit talent. While adding new benefit offerings and programs can put extra work on HR teams, companies can use automated solutions to address increased administrative work so they can offer what employees want — without strain to their team.
As employers look to retain and attract top talent to remain competitive, understanding any potential employee grievances on benefits and financial wellness offerings – and how best to address them across generational groups — is game-changing information.
