By Dr. Ronald Leopold
Benefits are typically structured to reward and motivate employees who stay at the company for the long haul. For example, retirement rewards and paid time off usually get sweeter as time goes on. Dangling a long-term benefits carrot makes sense for driving retention right? — Perhaps not when it comes to Gen Y workers. As companies focus on attracting and keeping a pipeline of Gen Y employees, I maintain that, when it comes to benefits, it is time for a mind-shift from long-term to a short-term value and appeal.
The annual MetLife Employer and Employees benefits survey tells us that Gen Y employees really, truly value their benefits. This is the generation hardest hit by the recession — experiencing underemployed and unemployed and in debt forever with student loans. Sixty-six percent of these younger workers say that, because of economic conditions, they are counting on more help from employers through employee benefits. In addition, they are more satisfied with their benefits than any of their generational co-workers (52% compared with 36% of older boomers.)
For ten years, the MetLife study has shown a strong correlation between employee loyalty and being satisfied with benefits. However, here’s the kicker. Despite being super-satisfied with benefits, the study shows that more than half of Gen Y intends to be the first out the door looking for a new job!
This contradiction does not mean that Gen Y workers are a self-centered, disloyal bunch. In fact, they take their careers and their financial futures very seriously. Rather than being grasshoppers in the job market, they are serial resume builders. To them loyalty is demonstrated by high performance not by how long you stick around. This is a challenge for employers who are conditioned to investing in employers when they join the company, in hopes of payback measured in decades.
I suggest that employers accept the inevitable and ask themselves what they can do to create a benefits program that delivers what Gen Y workers need and want today and not in some rosy future.
Here are some examples to consider:
1. Flexibility matters. Gen Y values generous time off policies and freedom to work when and where they like. Work-life balance is more important to Gen Y than any other generation – 50% say it makes them feel loyal to their employer. This is a powerful retention carrot. If you offer it, they will take it – but will not take advantage. Don’t send mixed signals about use of this benefit.
2. Gen Y prefers choice and customization when it comes to benefits. With inelastic benefits budgets the solution for this preference is voluntary benefits. This generation is used to reaching into their wallet for their benefits, so give them the choices they crave with employee-paid insurance products – from car insurance to pet insurance.
3. Gen Y is serious about their finances and concerned about risk. Provide liberal life and disability coverages from day one. Offer supplemental buy-ups to ensure adequate coverages.
Financial education in the workplace is highly valued at all levels — from basic financial literacy to sophisticated investment advice. Turn to carriers to deliver low-cost/no cost programs.
4. Health coverage is a big concern. Sixty-eight percent of Gen Y survey respondents are concerned about paying health care premiums and out of pocket costs. Help them meet these costs with affordable supplementary health products such as dental and vision coverages. These are popular benefits that you don’t have to be sick to use.
5. Advancement opportunities drive loyalty — more than their employers realize. The MetLife Study shows that 66% of Gen Y cite this as an important loyalty driver, yet only 42% of employers are on board. Don’t make employees have to move out in order to move ahead.
6. Text and Tweet to build engagement – communicate in preferred ways to build a benefits bridge to Gen Y.
Benefits are a powerful draw for attracting Gen Y to a company – 56% of Gen Y report that benefits were an important reason why they chose their current employer. They may not collect a gold watch from you, but you can motivate them to stay as long as possible by providing benefits that clearly help them solve immediate problems and needs.