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
The current workforce is comprised of five generations, 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. There is also an increased focus on retirement savings as more Millennials are contributing to 401(k)s. According to PEW Research Group, younger workers have higher balances in their 401(k) or 403(b)s, than Gen-Xers did at a similar age.
- 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. This very young group of employees 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.
Shift in the Workplace
Job seekers are becoming more flexible as quality benefits packages can be more important than a certain job title or salary. According to MetLife Employee Benefit Trends Study, 69% of employees say having a wider array of benefits would increase loyalty to their employer. One of these benefits is the option to work from home. This along with other benefits can determine whether someone applies for a position or decides to move forward.
Emerging Trends in Benefits
Some Traditional Benefits are Still Valuable
Even with the job market changing, employees still value traditional benefits. These include 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, including more paid time off and the option to work from home. Lifestyle perks like gym memberships and tuition reimbursements are also on the rise.
Increase in Benefit Education Programs
More companies are starting to provide benefit education programs that encourage a healthy lifestyle. There is also an increase in virtual health screenings, weight loss programs and mental health visits. Wellness programs tend to have high employee engagement and help reduce healthcare costs for companies and employees, and the ability to provide some of these virtually can be even more cost effective.
Creative Healthcare Solutions
With a multigenerational workforce, healthcare needs among employees are more varied than ever. To accommodate these diverse needs while being mindful of costs, most companies are providing high-deductible health plans and supplemented with Health Savings Accounts.
Outsourcing Benefits Administration
With the overwhelming number of options now available in benefits packages, more companies are outsourcing the management of employee benefits. Employee Benefit Brokers can customize plans for any business and then negotiate benefits packages with insurance companies. Choosing the correct broker comes down to the services they offer. While some will only take care of negotiations and building of the benefit packages, LBMC Employment Partners handles all benefits administration for our clients. With us as your broker, even a small business can offer Fortune 500 employee benefits.
LBMC Employment Partners houses experts equipped to handle all benefits administration needs. Contact us when you are ready to see why we were named a Nashville Area Top Employee Benefits Consultant for 2021.
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