Even as the job market cools somewhat, competition for talent remains tight and employee benefits offerings continue to occupy an increasingly prominent position in compensation packages.
While the advantages to employers for updating and upgrading their benefits and perks are clear - including a potential 43% reduction in turnover and an 18% increase in both profitability and productivity - the challenge of providing benefits that meet employees’ needs becomes all the more difficult in the midst of a generational shift in how employees view benefits and which ones they most prioritize.
Some of the generational divergence is the result of practical considerations related to the fact that different generations are currently experiencing different points in their life cycles and often have very different goals and benefits needs.
For example, given that college has only gotten more expensive over time and given that older workers on average have paid off more of their tuition debt than younger workers, it is not surprising that benefits related student loans are less in-demand among Gen X employees, 20% of whom list student loan repayment as the top employee benefit, than Millennial and Gen Z workers, 27% and 34% of whom do so, respectively. Among workers aged 18 to 24, 39% put student loan repayment at the top of their ideal benefits list.
Similarly, older workers tend to prioritize retirement-related benefits more so than younger workers do, with 401k matching ranking as the number 2 benefit priority among workers across all demographics with one exception - workers aged 18 to 24.
Other discrepancies between generations, however, seem to indicate a shift in opinion that goes beyond simply reflecting the different stages of life in which each generation currently finds itself.
For example, although fully-paid healthcare premiums was the number 1 employee benefit listed by the majority of survey respondents, with 51% of all respondents listing it as their top priority, the proportion of Gen Z respondents that put fully-paid healthcare premiums on the top of their list of employee benefit priorities was actually slightly lower than those who listed free food at the top of their list, at 41% and 42%, respectively.
For context, the percentage of Gen X respondents that listed free food as their top priority is 21% while the percentage of Millennials that did the same is 29%.
Free food aside, even with intergenerational differences of opinion, many opportunities remain for employers to both add additional flexibility and customization to their benefits packages in order to to seek out the common ground where the Venn diagram circles for each generation overlap.
For example, despite the popularity of fully-paid health insurance premiums across generations, the number of firms offering this benefit has been dropping dramatically in recent decades, with 34% of the Fortune 100 companies offering it in 2001, down to 9% in 2017 and just 1% as of 2023, which represents a significant edge for employers who can better meet this need of growing consensus.
You can read more about the survey from which this data was taken as well as the different perspectives that each generation brings to the workplace and benefits conversation here.
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