How to build a multigenerational benefits strategy

Employers and HR teams are now managing workforces that stretch across three to five different generations. Continue reading this blog post to learn more about why having a multigenerational benefits strategy is important.


Employers and HR teams are managing employees for a workforce that stretches across three to five generations. This workforce is complex, and its workers have varying needs from generation to generation. That’s why a multigenerational benefits strategy is in order.

Baby boomers preparing for retirement may have an ongoing relationship with doctors and a number of medical appointments in a given year. On the other hand, millennials and members of Generation Z— the latest generation to enter the workforce — may shy away from primary care doctors and focus more on options to pay off student loans and start saving for retirement.

Given these dynamics, it’s important that two separate departments, finance and HR, need to develop a benefits strategy that keeps costs as low as possible while being useful to employees. Finance leaders understand they need to retain employees — turnover is expensive — but they’re still interested in cost containment strategies.

Employers should approach their multigenerational benefits strategy on finding a balance between cost containment and employee engagement.

Cost containment

For the first time in six years, the number of employers offering only high-deductible health plans is set to drop 9%. But the idea of employee consumerism is here to stay as employers see modest rises in health insurance premiums.

To effectively contain costs, employers should first weigh the pros and cons of their funding model. While most companies start out with fully-insured models, employers should seriously evaluate a move toward self-funding. Sure, self-funding requires a larger appetite for risk, but it provides insight into claims and utilization data that you can leverage to make informed decisions about cost containment.

One way to move toward a self-funded model is with level-funding, which allows employers the benefit of claims data while paying a consistent premium each month. In a level-funded plan, employers work with a third-party administrator to determine their expected claims for the year. This number, plus administrative fees and stop-loss coverage, divided by 12, becomes the monthly premium.

A tiered contribution model might also help to contain costs without negatively affecting employees. In a typical benefit plan, employers cover a specific percentage and employees contribute the rest — say 90% and 10%, respectively. In a tiered contribution plan, employees with salaries under a certain dollar amount pay less than those high earners. That means your employee making $48,000 pays $50, while your employee making $112,000 pays more. It’s a way to distribute the contribution across the workforce that enables everyone to more easily shoulder the burden of rising healthcare costs.

Employee engagement

To create a roadmap that not only helps you gain control of your multigenerational benefits strategy but keeps employees of all ages happy, it’s necessary to consider employee engagement. While new options like student loan repayment could be useful to part of your workforce, it’s best to start much simpler with something that affects everyone: time away from work.

A more aggressive paid time off policy, telecommuting policies and paid family leave are becoming increasingly popular. Many companies are offering PTO just for employees to pursue charitable work — a benefit that resonates with younger workers and can improve company culture. And a generous telecommuting policy recognizes that employees have different needs and shows that employers understand their modern, diverse workforce. Beyond basic time away from work, an extended leave policy outside what the law guarantees is another tool that can keep employees engaged.

Making it easier for employees to get care is another trending benefit, which can keep employees happy and contribute to cost containment. Concierge telemedicine has been called the modern version of a doctor’s house call. This relatively inexpensive benefit provides your employees access to care 24/7 by phone or video chat, which is convenient regardless of the user’s generation.

Employees and other covered individuals can connect to a doctor to discuss symptoms and get advice, whether they are prescribed a medication or they need to seek further care. This is another benefit that’s useful for young workers who may not have a primary care doctor or older workers with families.

Finally, your tech-savvy workforce expects to access their plan information wherever they need it. Ensure your carrier offers a mobile app to house insurance cards, coverage and provider information.

When it comes to a multigenerational benefits strategy, creating harmony between finance and HR might seem like a daunting task. But considering some relatively small benefit changes could be what allows you to offer a benefits package that pleases both departments — and all of your employees.

SOURCE: Blemlek, G. (26 February 2019) "How to build a multigenerational benefits strategy" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/how-to-build-a-multigenerational-benefits-strategy?brief=00000152-146e-d1cc-a5fa-7cff8fee0000


Goodbye group benefits. Hello personalized pay

Do you offer a uniform benefits package to your employees? With five generations in the workplace now, off-the-shelf benefit options are presenting employers with a challenge. Read this blog post to learn more.


In the past, it was typical for a company to provide all employees with access to the same group benefits — regardless of their age, demographics or education level. From health insurance to retirement plans and paid time off, these uniform benefit packages were designed to meet the needs of the entire workforce in one fell swoop.

But over the past few years, these off-the-shelf benefit options have presented a bit of a challenge. With five generations now in the workplace — Gen Z, Millennials, Gen X, Baby Boomers and the silent generation — there are diverse expectations about pay and benefit packages.

For example, baby boomers and the silent generation tend to value health insurance and a robust retirement plan. Meanwhile, Gen X workers seek a healthy work-life balance, advancement opportunities and a competitive 401(k) — or a retirement savings plan that lets you set aside and invest money from your paycheck, to which your employer can then contribute. Millennials and Gen Z prioritize flexibility — they want more paid time off, the ability to work when and where they wish and tuition reimbursement.

There is no one-size-fits-all compensation package that can fairly satisfy each generation of workers. Employees today want to feel heard, understood and cared for by their employer. Furthermore, most want a job that fits with their personal interests and lifestyle.

As a result, companies are moving away from traditional group benefits and taking a more personalized approach to compensation.

Many organizations are using social listening tools, focus groups and surveys to gather information about the types of benefits employees want. Others are taking it a step further and having one-on-one conversations to determine what motivates each individual worker and provides them with a sense of purpose at work. How else will we know what, specifically, each employee wants unless we ask them?

By collecting this information, organizations can tailor packages that effectively meet the varying wants and needs of the diverse workforce. They’re offering mixes of pay, bonuses, flex time, paid time off, retirement plans, student loan repayment assistance and professional growth opportunities. Some companies have designed an a la carte menu of benefits, with which employees can pick and choose the perks they care most about.

According to a recent survey conducted by WorldatWork and KornFerry, organizations also are offering more non-traditional benefits that can further acknowledge employees’ concerns and responsibilities outside of work. Eldercare resource and referral services, women advancement initiatives and disaster relief funds all became significantly more prevalent in employee benefits programs within the last year. Telemedicine, identity theft insurance and paid parental leave offerings increased as well.

And many organizations are taking innovation one step further. One firm recently introduced a new benefits reward program in which employees earn points based on both personal and company-wide achievements and then cash them in for perks across various categories: health and wellness, travel, housing, transportation, time off, annual grocery passes — you name it. The purpose is to give employees the power to choose the types of perks that mean the post to them.

Personalized pay can boost attraction and retention

The unemployment rate is the lowest it’s been in decades, and the war for talent is extremely tough. The average tenure for workers is 4.6 years. For millennials, it’s half that.

This sort of high employee turnover can take a massive toll on a company’s bottom line: Experts estimate that it can cost up to twice an employee’s salary to recruit and train a replacement. Not to mention, employee churn can damage company morale and tarnish your company’s reputation.

Customized pay and benefits plans can make an employer be more attractive in a tight, crowded job market. If you want to not only attract top talent but retain them as well, it’s worth taking the time to understand what matters to your candidates and offering them personalized pay and reward packages.

Organizations need to introduce more flexibility into their pay packages and adapt to the needs of the changing workforce. After all, when you invest in your employees, you invest in the overall success and performance of your business.

SOURCE: Wesselkamper, B. (11 February 2019) "Goodbye group benefits. Hello personalized pay" (Web Blog Post). Retrieved from https://www.employeebenefitadviser.com/opinion/tailored-employee-benefit-plans-gaining-popularity


Younger workers fear rising health care costs

By Donald Jay Korn
Source: eba.benefitnews.com

Workers in Generations X, Y and beyond may be decades from retirement but they already have multiple concerns about their future finances.

In a Harris Interactive online survey for T. Rowe Price, more than half of respondents listed seven different retirement worries:

1. Health care costs (76%).

2. Rising taxes (67%).

3. Viability of Social Security (63%).

4. Inflation (61%).

5. Long-term care (58%).

6. Outliving their savings (52%).

7. Housing values (52%).

“Investors are concerned about rising health care costs, and they should be,” says Stuart Ritter, senior financial planner with T. Rowe Price. “According to the Employee Benefits Research Institute, health care costs are the second-biggest expense for those aged 65 and older, behind housing, and it’s the only spending category that steadily increases with age.”

To raise the necessary cash, working longer may or may not be an option, but saving and investing more is often indicated. “One of the perennial lessons younger investors can learn from current retirees is to save at least 15% of their earnings and begin as early as possible,” Ritter stated. “The ones who do are the ones more likely to enjoy the retirement flexibility and lifestyle that financial independence can provide.”

Donald Jay Korn writes for Financial Planning, a SourceMedia publication.


Baby boomers, Gen Xers view retirement through rose-colored glasses

By Margarida Correia

Source: eba.benefitnews.com

The majority of baby boomers and Gen Xers appear to be looking at their retirement years through rose-colored glasses. More than three in four feel confident they will have enough money to live comfortably in retirement, even though nearly 40% of baby boomers and about two-thirds of Gen Xers have less than $100,000 in retirement savings. Moreover, a worrisome percentage —21.7% of baby boomers and 27.8% of Gen Xers — has no retirement savings at all. The grim statistics are the highlights of a report released by the Insured Retirement Institute.

In addition to insufficient savings, significant portions of baby boomers and Gen Xers lack investment knowledge and have not taken important retirement planning steps such as calculating a retirement savings goal, the report found. Slightly more than half (51.4%) of baby boomers and less than half (40.7%) of Generation Xers have tried to calculate how much savings they will need for a comfortable retirement.

It wasn't all bad news. Baby boomers and Gen Xers who work with financial advisers, calculate their retirement savings needs and own annuities report having greater levels of retirement confidence, the study found. For example, among baby boomers who consulted a financial adviser, 42.8% reported feeling extremely or very confident about their retirement readiness compared with 32.3% who did not consult an adviser.  Gen Xers also registered similar gains in retirement confidence from working with financial advisers.

The report was drawn from two surveys conducted by Woelfel Research, Inc., on behalf of IRI. One survey polled 503 Americans, ages 50 to 66, in February and March 2012.  The other polled 802 Americans, ages 30 to 49, in November 10 - 22, 2011.


6 Tips to Engage Gen Y Employees

By Dr. Ronald Leopold
Source: http://eba.benefitnews.com

Benefits are typically structured to reward and motivate employees who stay at the company for the long haul. For example, retirement rewards and paid time off usually get sweeter as time goes on.  Dangling a long-term benefits carrot makes sense for driving retention right? — Perhaps not when it comes to Gen Y workers.  As companies focus on attracting and keeping a pipeline of Gen Y employees, I maintain that, when it comes to benefits, it is time for a mind-shift from long-term to a short-term value and appeal.

The annual MetLife Employer and Employees benefits survey tells us that Gen Y employees really, truly value their benefits.  This is the generation hardest hit by the recession — experiencing underemployed and unemployed and in debt forever with student loans.  Sixty-six percent of these younger workers say that, because of economic conditions, they are counting on more help from employers through employee benefits.  In addition, they are more satisfied with their benefits than any of their generational co-workers (52% compared with 36% of older boomers.)

For ten years, the MetLife study has shown a strong correlation between employee loyalty and being satisfied with benefits.  However, here’s the kicker.  Despite being super-satisfied with benefits, the study shows that more than half of Gen Y intends to be the first out the door looking for a new job!

This contradiction does not mean that Gen Y workers are a self-centered, disloyal bunch. In fact, they take their careers and their financial futures very seriously. Rather than being grasshoppers in the job market, they are serial resume builders.   To them loyalty is demonstrated by high performance not by how long you stick around.  This is a challenge for employers who are conditioned to investing in employers when they join the company, in hopes of payback measured in decades.

I suggest that employers accept the inevitable and ask themselves what they can do to create a benefits program that delivers what Gen Y workers need and want today and not in some rosy future.

Here are some examples to consider:

1. Flexibility matters. Gen Y values generous time off policies and freedom to work when and where they like.  Work-life balance is more important to Gen Y than any other generation – 50% say it makes them feel loyal to their employer.  This is a powerful retention carrot. If you offer it, they will take it – but will not take advantage.  Don’t send mixed signals about use of this benefit.

2. Gen Y prefers choice and customization when it comes to benefits.  With inelastic benefits budgets the solution for this preference is voluntary benefits.  This generation is used to reaching into their wallet for their benefits, so give them the choices they crave with employee-paid insurance products – from car insurance to pet insurance.

3. Gen Y is serious about their finances and concerned about risk.  Provide liberal life and disability coverages from day one. Offer supplemental buy-ups to ensure adequate coverages.

Financial education in the workplace is highly valued at all levels — from basic financial literacy to sophisticated investment advice.  Turn to carriers to deliver low-cost/no cost programs.

4. Health coverage is a big concern.  Sixty-eight percent of Gen Y survey respondents are concerned about paying health care premiums and out of pocket costs. Help them meet these costs with affordable supplementary health products such as dental and vision coverages. These are popular benefits that you don’t have to be sick to use.

5. Advancement opportunities drive loyalty — more than their employers realize. The MetLife Study shows that 66% of Gen Y cite this as an important loyalty driver, yet only 42% of employers are on board. Don’t make employees have to move out in order to move ahead.

6. Text and Tweet to build engagement – communicate in preferred ways to build a benefits bridge to Gen Y.

Benefits are a powerful draw for attracting Gen Y to a company – 56% of Gen Y report that benefits were an important reason why they chose their current employer. They may not collect a gold watch from you, but you can motivate them to stay as long as possible by providing benefits that clearly help them solve immediate problems and needs.

 


Employees Placing Greater Reliance on Benefits

By Brian M. Kalish

Tough times have employees placing greater reliance on benefits for financial security, as employers affirm their commitment to sponsoring those benefits albeit with increased cost sharing.

That’s one upshot from the 10th Annual MetLife Annual Study of Employee Benefits Trends released Monday. It found that since 2002 employer’s top benefits objectives -- controlling costs, attracting and retaining employees and increased productivity – have remained fairly constant. However, some delivery aspects have changed, such as the growth of auto-enrollment features in 401(k) plans. For advisers, the trends seem to point toward stable expenditures for core benefits, but greater funding from employees, including voluntary benefit purchases.

Nearly half of the 1,412 employees surveyed said that, because of the economy, they are counting on their employer to help them achieve financial security through employee benefits such as disability and life insurance and health.

For younger generations, that number is even higher. More than half (55%) of Gen X and two-thirds of Gen Y workers said economic pressures leave them counting on employers’ benefits program to help with their financial projection needs, according to the study, presented by MetLife’s National Medical Director Dr. Ron Leopold, an EBA Advisory Board member, at a MetLife Symposium in Washington.

Employers say they are hearing these concerns and rising to the challenge. Regardless of company size, of all companies surveyed, only 10% said they planned to reduce their benefits.

“The workplace has changed rather dramatically over the last decade since MetLife began doing its annual study,” says Anthony Nugent, executive vice president of MetLife.  “Ten years ago, many Baby Boomers were planning to retire at age 65, Gen Y workers were just entering the workplace, and communication vehicles like Facebook and Twitter didn’t exist.”

As employees rely more on benefits, they are willing to bear most of the cost of them. Of surveyed Gen X and Gen Y employees, 62% said they are willing to bear more of the cost of their benefits rather than lose them.

And that may happen. While a third of employees believe their employer is likely to soon cut benefits, 70% of surveyed employers said they intend to maintain their current level of employee benefits. However, 30% will do this by shifting costs to employees.  Some 57%, are interested in a wider array of voluntary benefits offered by their employer, as compared to 43% of Baby Boomers.  The study also found that employers recognize this interest as 62% of employers agree that in the next five years employee-paid benefits will become a more important strategy than they are today.

With the ever-changing benefit landscape, loyalty continued to fall. Only half (42%) of employees feel a strong sense of loyalty to their employer, a seven-year low. Conversely, 59% of employers said they feel a very strong sense of loyalty to employees. One in three people would like to work for a different employer in 2012, but that number climbs to one in two for Gen Y employees.