Although we’re witnessing one of the most competitive labor markets in many years – which gives job-seekers and employees considerable leverage over employers – companies shouldn’t forget that workers worldwide face many daunting obstacles. For example, stubbornly high inflation has cut into employees’ savings, a major stock market contraction has drained 401(k) accounts, and there’s a real possibility that we’re heading toward a recession.
These economic challenges affect employees in different ways. For example, significant generational gaps determine how employees manage their spending, which benefits they use, and what they expect from employers. While Boomers and Gen Xers may be more interested in contributing to their retirement accounts, Millennials and Gen Zers often want financial programs to help them pay off student loan debt or health and wellness benefits. In a multi-generational workforce, HR teams have to be capable of identifying employees’ unique needs and providing resources that meet those needs.
The demand for flexible benefits will only become more pressing in the coming years, which is why HR teams should implement programs like life planning accounts (LPAs) that can be customized however employees want. LPAs can also reallocate existing funds from benefits programs that employees aren’t using – the sort of cost-effectiveness companies need during an economic downturn. With these advantages in mind, let’s take a closer look at how companies can support multi-generational workforces with LPAs.
Managing a Multi-Generational Workforce
There are clear benefits to developing a multi-generational workforce, from the digital literacy of younger generations to the institutional knowledge provided by older workers. According to a report by the World Economic Forum, the OECD estimates that “age-diverse workforces will create a more efficient, productive and profitable economy and raise GDP per capita by almost 19 percent in the next three decades.”
While companies recognize the value of age diversity, they’re unsure how to calibrate their culture, operations, and benefits for multi-generational workers.
A Deloitte survey found that 70 percent of organizations say it’s important or imperative to lead a multi-generational workforce, but just 10 percent are ready to do so. Meanwhile, a mere six percent of respondents “strongly agree that their leaders are equipped to lead a multi-generational workforce effectively.” These are clear indicators that companies must focus on creating and implementing programs supporting employees of all ages.
Over half of companies say they “consider generational differences to some or a great extent when designing and delivering workforce programs.” Considering these differences is one thing;making them a central element of your benefits platform is something else entirely. Companies can start the process by engaging with employees about their specific priorities and concerns.
Meeting a Wide Array of Employee Needs
Employees at different points in their lives and careers expect benefits programs that help them confront their particular challenges.
While Boomers and members of the Silent Generation are concerned about, say, medical expenses, Millennials are more focused on buying homes and raising their children.
Many Boomers and Gen Xers are still working to pay off their kids’ college expenses, while Millennials often have their own student loan debt burdens to worry about. Because members of Gen Z are in the early stages of their careers, they’re typically less inclined to allocate funds to retirement accounts and more likely to embrace wellness benefits and cost of living assistance.
There are clear patterns of behavior across generations, but this doesn’t mean HR teams should make assumptions about what employees want based on their age alone. It’s generally true that older workers contribute more to their retirement accounts, but each generation has outliers in both directions – frugal savers and profligate spenders.
A key advantage of flexible benefits programs like LPAs is that they account for the full range of employee needs and goals. Whether employees want to make student loan payments, invest in HSAs, purchase school supplies for their children, pay for health club memberships, or take courses that will help them advance their careers, LPAs give companies a way to offer financial support for any of these priorities.
Administering LPAs to Support Employees of All Ages
When 94 percent of employees say they would benefit from flexibility in the workplace, LPAs provide companies with a simple and cost-effective way to offer this flexibility. LPAs allow HR teamsto engage with employees directly about which benefits are best for their unique circumstances, improving employee satisfaction, reducing turnover, and making companies more competitive in the battle for talent. With multiple generations in the workforce, the flexibility afforded LPAs isn’t just a nice perk for employees – it’s essential for ensuring that all workers feel valued.
Hiring and retention are always top of mind for HR teams, but these issues are especially critical when there are more jobs than employees willing to take them and quit rates are near all-time highs. According to a recent CNBC survey, 57 percent of those who retired during the pandemic say they did so after being laid off. That’s a lot of institutional knowledge that won’t return to the workforce, and companies should actively seek ways to keep their senior employees on board. Millennials have comprised the largest proportion of the labor force for years, and Gen Zers will be joining them in steadily increasing numbers. Younger workers are highly educated and diverse, and HR teams must also appeal to them.
From experience and practical knowledge to diverse perspectives and tech savviness, workers across all age cohorts have unique contributions. HR teams are responsible for building their benefits programs around the needs of all their workers, young and old. LPAs are a great place to start.