Benefit Plans for Different Generations

Benefit Plans for Different Generations

Compensation Motivation & Rewards

MS6510 – Instructor Monica Galante

Abstract

It is not uncommon for today’s workplace to have up to four different generations of employees working together. This situation has some good points but also presents some challenges. This paper will design a benefit program that satisfies the needs and preferences of each generation, as well as address the impact that each generation has on the workplace and the benefit design. The generations include Veterans, Boomers, Xers and Yers.

Benefit Plans for Different Generations

2016, for the first time in history, employers are reporting having five different generations within the workplace. Though these workers may have decades between them, many of them share the same work space, managers and even benefits. However, that is pretty much where the similarities end. This has led HR professionals to reexamine the standard “one size fits all” benefit and compensation packages.

Economic uncertainty, rising health care cost, global competition a shortage of qualified workers and technology moving at the speed of light has created somewhat of a perfect storm within many work environments (Dwyer, 2009). For these reasons, researchers have been conducting quantitative and qualitative research to determine the priorities, concerns and financial aspirations of each unique generation. The generations include Veterans, Boomers, Xers and Yers.

A part of an HR professionals role is to devise and implement organizational strategies for engagement. This will greatly assist with the understanding of generational differences, which is imperative to the success of any business. In today’s workplace, employers must ensure that they are meeting the needs of all of their employees. There is a growing expectation that employers will present benefits tailored to the generations and not just the masses in the workplace (Dwyer, 2009).

Dr. Paul Redmond is an expert in generational theory. He was commissioned by Barclays to conduct research on today’s multi generational workforce. His final report has provided HR professionals with a new way of thinking concerning benefits for multiple generations. His research suggest that current benefit packages are out of date and do not provide enough flexibility. 6/10 employees seek out a comprehensive benefit package when they are in the market for a new role. Most astonishing was the 85% who believe their current benefit package does not provide the flexibility or support that they desire/require to meet their financial needs and goals. There is clear and distinct value in providing workers with financial guidance yet, 90% of those who participated in Dr. Redmond’s study stated they had no access to a work based financial guidance program. In reviewing Dr. Redmond’s study, I found distinct characteristics that exist within the 4 generations. These characteristics are apparent when analyzing employee benefit packages.

Veterans are employees who were born between 1922 and 1945. This traditional generation is made up of predominantly white males with higher employment rates, even though women are the larger group when viewing this population as a whole. These are employees who value a woman remaining at home to care for her family and only considered the workplace during times of national crisis such as WWII. This is the generation that was confronted with racism and sexual equality in the workplace. Baby Boomers are employees who were born between 1946 and 1964. In terms of employee benefits, they were the least demanding. 78% said they value their pension plan, 48% valued healthcare the most while 57% cited career development and advancement for growth as their primary benefit. It is no surprise that Baby Boomers benefit the most from current benefit packages; it is highly likely that a Boomer invented them.

Generation X employees or Xers, are those born between 1965 and 1980. This group seems to have the best work-life balance with 71% valuing their pension and 69% desiring flexible working hours. 41% of Generation Xers cite paying of their mortgage and having more family time as major concerns while 30% desire to save for retirement so they would like to see higher matches to their 401k. Generation Y or Yers are employees born between 1981 and 1995. This group’s primary focus is securing opportunities that provide growth and career advancement. 64% desire a benefit package that focuses on career and personal development; education and training reimbursement. Nearly two thirds of this group seek financial and educational guidance. This is likely due to the significant financial barriers many face. About 29% see buying a house as a priority and 30% desire to pay off debt; primarily student loans.

While it is important to deign plans to cater to all generations, it is also critical to communicate all options effectively. Veterans and Boomers may be most receptive to face-to-face, one-on-one meetings or group meetings where other Vets or Boomers are present and benefit options can be viewed together. HR professionals can take a more aggressive approach to younger or inexperienced employees who do not clearly understand the overall value of their benefits as well as the value of a multi-generational plan design. Showing employers that leadership understands the value in generational benefits can be vital to recruiting and retention.

References:

Dwyer, R. J. (2009). Prepare for the impact of the multi-generational workforce! Transforming Government: People, process and policy, 3(2), 101-110.

Paul Redmond – Trotman Publishing. (n.d.). Retrieved April 13, 2016, from http://trotman.co.uk/our-authors/paul-redmond/