With rising healthcare costs, a thinning employment market and a multigenerational workforce, navigating the world of employee benefits has never been so complicated or as important. Attracting top talent means providing competitive benefits, but with today’s changing workforce, those benefits packages can take on many different shapes. Here are some challenges and trends that are emerging in the changing landscape of employee benefits.
Challenges with a Changing Workforce
There are five different generations in the current workforce, all with different needs and desires when it comes to employee benefits.
- Traditionalists—Many of these employees came into the workforce with cradle-to-grave benefits that may no longer exist. These workers need plans to help them retire and education on why some of their benefits may have changed.
- Baby Boomers and Generation X—These two generations are serving as the primary caregivers of their children or aging parents, while also looking ahead to their own retirement. Both of these groups tend to like traditional benefits that help them pay for their rising healthcare costs and saving for retirement.
- Millennials—Millennials are just beginning to have families and plan for their futures, putting an emphasis on family leave and healthcare benefits. Still, most Millennials prefer low-cost health insurance options and tend to opt out of voluntary benefits like retirement savings.
- Generation Z—This newest generation is just starting to enter the workforce and has shown a greater desire for lifestyle benefits that help personal and professional growth. Being very young, this generation favors benefits that have an immediate payoff rather than those that address future needs.
Healthcare costs have risen dramatically over the last 20 years, making employer-sponsored health programs even more attractive to job seekers. Businesses—particularly, small ones—are being forced to come up with new and creative ways to pay for these expensive plans.
Tight Employment Market
Unemployment is the lowest that it’s been in almost two decades, meaning there is a smaller pool of job seekers for employers to choose from. This puts an even bigger emphasis on quality benefits packages, as talented job seekers can be picky about employment.
Emerging Trends in Benefits
Some Traditional Benefits are Still Valuable
Even with the job market changing, employees still value traditional benefits, such as disability insurance and retirement savings plans, such as 401(k)s.
The Rise of “Lifestyle” Benefits
Though traditional benefits remain important, younger employees are driving the rise in soft benefits and perks. These include things like offering more paid time off or the option to work from home. Lifestyle perks like gym memberships, tuition reimbursements, or pet insurance are also on the rise.
Increase in Wellness Programs
More companies are starting to emphasize health wellness programs that encourage preventative care and a healthy lifestyle. These include on-site flu vaccinations and health screenings, as well as weight loss programs and stress management. Wellness programs tend to have high employee engagement and also help reduce healthcare costs for companies and employees.
Creative Healthcare Solutions
With a multigenerational workforce, healthcare needs among employees are more varied than ever. More companies are providing high-deductible health plans and offsetting them with Health Savings Accounts.
With the overwhelming amount of options now available in benefits packages, more companies are outsourcing the management of employee benefits. Employee benefits companies and brokers can customize plans for any business and then negotiate benefits packages with insurance companies. The same companies can then handle all the administration and paperwork involved with benefits. Small businesses that use a benefits broker can also get access to packages that would usually only be available at large companies.
LBMC Employment Partners houses experts equipped to handle a variety of employee benefits. When you are ready to start building your company’s benefits package, contact us to learn more.