Reinventing benefits for younger generations

New research from LIMRA and EY shows that workplaces have reached a "generational tipping point." Millennials and Gen Z employees now make up the majority of the workforce — and are on pace to constitute 60% by 2031.¹ These younger workers (42 years old and under) have different benefit preferences from the Baby Boomers and Gen X cohorts for whom benefits have traditionally been designed, and greater needs when it comes to benefits education and enrollment. LIMRA's Kimberly Landry joined John Stibal from Unum and Michael Stachowiak from Colonial Life to discuss how HR should react to this profound generational shift.

• A much broader view. According to Landry, LIMRA's second annual Benefits and Employee Attitude Tracker (BEAT) study shows that younger employees still want core benefits above all else. But they also want their benefits package to include a wider variety of supplemental health, wellness, mental health and other benefits. "The benefit programs of the future need to be more customizable and provide more options for employees to pick and choose from," says Landry. [02:02]

• More choice means more confusion. As employers offer a larger number of benefits, they will need to increase their efforts to educate younger benefit consumers, according to Stachowiak. Stibal agrees that education is important to making informed decisions because with choice, "your employer is not making the decisions for you any longer." [04:00]

• More benefits are more important. According to the LIMRA/EY Harnessing growth and seizing opportunity: 2023 Workforce Benefits Study, employers and employees both assign a high degree of importance to a fairly long list of benefit options. To compete effectively for talent, employers need to show that their benefits portfolio contains a wide range of choices to fit employees' differing needs. "About half of the employers in our survey told us they expect to be increasing the number of benefits that they offer in the next five years," Landry says. [06:30]

• Disability awareness is down, indicating an education opportunity. One troubling finding in the LIMRA research is the relatively low importance participants assigned to disability insurance. Stibal says that's where education comes in. "The GoFundMe strategy is a strategy, but not a good one for the long term," he says. "Employers need to make sure people understand where their risks lie and what they need to do to shore up those risks." Stachowiak points out that the multigenerational workforce combined with the rise in benefit choices means that "a one-size-fits-all benefit education program just isn't going to be effective moving forward." Employers will need to tailor their approaches to their particular employees and benefit programs. [08:47]

• The biggest change since last year? Importance of leave. Employer perception of the importance of paid family and medical leave benefits jumped 26% over last year, as shown in the LIMRA/EY study. "Paid family leave sounds simple, but it's really, really complicated for employers," says Stibal. Between complying with multiple federal, state and local leave laws and creating a good experience for employees administering leave is a challenging issue for employers. Employers may want to outsource leave management to a carrier who can provide a good combination of technology and human support. [13:00]

• The "Wheel of Wellness." LIMRA looked at benefit priorities across five dimensions of wellness: physical, mental, financial, professional and societal. Across the generations, younger employees placed more priority on societal wellness (volunteer opportunities, charitable donation matching, etc.) and mental health. Landry and Stibal believe mental health benefits are going to be a key area for employers to strengthen. [18:10]

• Employees want personal assistance. Stachowiak says that employees increasingly want human assistance in benefits enrollment, whether in person or over the phone. Landry confirms this. "Two of the top five preferred benefits communication methods were digital experiences. But the other three were all in-person approaches," she says. [23:00]

• How does all this factor into enrollment? As employers offer more benefits and as employees need more education, it's important to be mindful about how you roll out your benefits enrollment. Some best practices:

  • Spread communication out over time in a drip campaign instead of bombarding employees with an overwhelming amount of information all at once
  • Talk about only one or two benefits at a time, so employees can pay equal attention to all their options
  • Communicate more about brand-new or unfamiliar benefits
  • Encourage employees to start enrolling early in the enrollment window, so they have time to ask questions and make informed decisions [27:12]