Yes, Millennials like tech and lifestyle perks… but not as much as sound financial solutions
By Diane Russell Ms. Russell is Senior Vice President of Marketing and Customer Strategy within the Group Protection business at Lincoln Financial Group. She is responsible for leading client- and customer-focused marketing strategies for group benefits products and services.
Competition for employees is fierce, but if employers are trying to attract a younger generation to their workforce by focusing on perks like free avocado toast and ping-pong tables, they may be going in the wrong direction. While millennials do have a reputation for appreciating lifestyle and technology perks, it’s no longer viable to retain younger employees without coupling these perks with solutions for their financial future.
A comprehensive benefits package has traditionally been a powerful tool for attracting top talent, and the younger generation is no exception. Both millennials and Generation Z rank salary as most influential when making job decisions, but 60% of Gen Z workers say they would accept a 10% lower starting salary in return for a better benefits package, while 65% of millennials would take a job that paid 10% less but offered much better benefits.
Currently, more than one-in-three American labor force participants (35%) are millennials, making them the largest generation in the U.S. labor force. Reaching them is an essential need for employers. In order to attract and retain this younger generation of employees, employers need to offer and educate them on benefits and cost, and provide them with digital tools and access that fits their lifestyle.
Benefits Influence Job Decisions
Offering the right benefits can often help millennials when deciding on accepting a new job, so employers should make the benefits they offer clear right up front. In fact, 57% of millennials have stayed in a job they didn’t like because the job offered good benefits. Gen Z, the newest generation to enter the workforce, is already exhibiting a similar emphasis on benefits. Two thirds of the oldest members of Gen Z, now in their early 20s, said benefits are very influential in their decision to accept a job, and 35% rated employee benefits as the most important consideration for a new job.
Strong benefits packages — including retirement plans and insurance offerings beyond health insurance, such as dental, vision, life, disability, accident and critical illness insurance — don’t just get younger generations in the door, they keep them there. Many Gen Z-ers are just now taking their first full-time positions, but 91% say that being offered a great employee benefits package would make them work longer at that first gig. After salary, millennials said that benefits most influence keeping them at their job (51%), and 57% have stayed at a job longer than they wanted to — even though they didn’t like the job — because the job offered good benefits.
As millennials progress through different life stages, they are increasingly focused on things that may have an impact on their current and long-term financial wellbeing. By offering a comprehensive benefits package, and robust education about those benefits, employers can help ensure they are attracting top talent and recruiting and retaining this younger generation of employees.
Transparency Around Cost
Explaining and understanding cost is crucial to the younger generation. When asked what would be most helpful in alleviating frustration and reducing confusion, 57% of millennials said they want to be shown the exact monthly and annual cost for each plan or product, and more than half want access to an online portal that explains plan options and costs.
For millennials, one of the most important factors in choosing benefits (88%), is knowing the cost of the benefit, followed by the ability to pay for the benefits through automatic deductions (81%). But these needs are not being met. Almost half said the most frustrating aspect of selecting insurance and benefits is the difficulty of understanding the exact costs for various choices (47%) and simply understanding different plans and options (46%).
Employers can partner with their carriers to offer the tools younger employees need to make these selections, including digital calculators that help estimate life insurance and disability coverage needs. Providing cost clarity and transparency can help employees take ownership of their coverage and confidently choose the solutions that are best for their financial future.
Meet Them Where They Are
In an era of digital communication, it is important to understand how to reach our audiences — and in order to reach millennials we need to meet them where they are, which is online.
On-demand digital resources, virtual documents and digital tools showcase the added services that come with certain products and can help employees get the most value from their benefits. Plus, a website where they can access information about each benefit is the top way that Gen Z says they want their employer to educate them about the benefits offered.
Millennials already understand the importance of benefits, but they may not understand how to truly take advantage of the options they have. Developing a digital guide to understanding benefits will go a long way to winning trust, and providing information through a variety of digital and mobile channels can help alleviate frustration. On-demand access to educational materials could prove extremely helpful, as 62% of millennials have given up searching for information about benefits because it was just too overwhelming or confusing.
It’s important for employers to help their employees address these questions, as they are more likely to elect a benefit if they fully understand it. The vast majority (89%), say that understanding a benefit and how it works is an important factor in deciding which benefits to choose at work. Knowing this, there is an opportunity for employers to work closely with their provider to ensure they are providing the education necessary to help employees understand the importance and value of the coverage offered.
The New Workforce
Millennials and Gen Z don’t need to be convinced about the importance of workplace benefits. What they need is access to resources that can help them make informed decisions and achieve their long-term objectives. By helping employees have clarity around cost, and access to education about benefits where they are and when they want it, employers can attract and attain the newest generations of employees.