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Talkin’ About My Generation’s Benefits


Today’s employers have three different generations represented in their workforce – millennials, Generation X and baby boomers. Each generation looks at work, life, and money in totally different ways and has varying benefits needs and preferences. Brokers and advisors who assist their business clients in matching their employees’ life-stage needs to voluntary benefits offerings will build stronger client relationships and increase their revenue at the same time.

Well-designed benefits plans should be based on employees’ desires and needs in addition to supporting the employer’s business objective of providing a benefits package that aids in recruiting and retaining its workforce. Once considered just a nice extra for a more comprehensive benefits package, voluntary benefits are now an essential element of the employee benefits program because they allow workers to customize their benefits and assist with the employee’s overall financial wellness.

Financial wellness is a concern for most of today’s employees. In a July 2014 Harris Poll, 80 percent of employees working full-time said they have financial stress today. Their stress is related to both long-term and short-term financial needs. Specifically, 67 percent indicated the stress is related to long-term financial needs (savings, retirement plan, etc.), while 60 percent said it was short-term-related (everyday living expenses as well as unexpected financial needs such as a car repair, appliance replacement or emergency medical expenses).

Voluntary benefits can address some financial wellness needs for employees. Traditional voluntary benefits are generally straightforward when it comes to employee selection as they most likely are chosen to complement the core insurance program.

Traditional voluntary products can fill in the gaps in core benefits left by scaled-back benefits, higher deductibles and more consumer-driven health plans. Not surprisingly, these benefits are also the most popular.

But nontraditional voluntary benefits break it wide open. Nontraditional voluntary products in the marketplace provide a wide array of benefits that employees can choose from to enhance their lifestyle, protect their well-being, and improve their financial wellness in both the short and long term. There’s a multitude of opportunities to meet employees’ diverse needs.

By looking at nontraditional voluntary benefits offerings based on generational preferences, employers can hit a home run with their workforce.

Defining the Generations

Baby Boomers (born 1946-1964)
The boomers are the oldest generation in the workforce. They are generally the ones holding the top positions in their companies. Some are already contemplating retiring. And according to AARP, they make up 38 percent of the workforce nationwide.

Boomers are worried. For the most part, if there’s something boomers want, they are able to buy it. However, many will question whether they should buy it or save the money instead. Many are trying to be financially responsible and scaling back from a materialistic lifestyle. Boomers, even if they are high earners, worry about retirement – both having enough money for retirement and wondering when is the right time to retire.

Generation X (born 1965-1979)
The middle generation is Generation X, which has a distinctly individualistic outlook. The U.S. Bureau of Labor Statistics reports that Gen Xers make up one-third of the workforce.

Generation X is stretched thin. Gen Xers’ work ethic is balanced and flexible with a “work hard, play hard” attitude. This generation’s financial stressors come from multiple angles. They are raising children, preparing for the care of their aging parents and trying to save for their own financial futures. They appear to be having the toughest time financially. They find it difficult to meet their household expenses on time each month and are the most likely to carry balances on their credit cards.

Millennials (born 1980-2000)
The youngest generation in the workforce is the millennials, also referred to as Generation Y. They have higher expectations than those of other generations when it comes to promotions and recognition.

Millennials are confused. They often juggle many jobs and move from job to job frequently. Their greatest fears are silence, unplugging, routine and eternal internship. Keys to job retention for millennials are personal relationships, multiple tasks and fast rewards. Their benefits needs include portable benefits, forced savings, financial education and concierge services. Key values for millennials include future financial security and better quality of life. To improve their financial situation, they need a better job or a promotion, and expert advice on how to make the most of their money in addition to beginning a 401(k) or other retirement plan. The average millennial has $29,000 in student loan debt alone. Not surprisingly, millennials also are more worried about getting rid of or incurring additional debt than they are about meeting their day-to-day expenses.

The nontraditional voluntary products in the marketplace provide a wide array of benefits that employees can choose from to enhance their lifestyle, protect their well-being and improve their financial wellness.

By recognizing the value in voluntary benefits and adding to their voluntary offerings, employers not only can provide for their employees’ financial wellness, but can retain a loyal, motivated workforce as well. For brokers and advisors, providing this kind of benefits approach to employers helps build a more meaningful benefits package.

What’s Available in the Nontraditional Voluntary Benefit Category?
Here’s a fairly comprehensive list of what’s available as a nontraditional voluntary product today, categorized by purpose:

Buying & banking options
• Paycards
• Short-term loans
• Employee purchase programs
• Employee discount programs
• Credit unions
• Flexible spending accounts

Lifestyle & convenience options
• Child care
• Elder care
• Pet insurance
• Auto insurance
• Adoption assistance
• Cybersecurity insurance
• Legal assistance

Personal care & improvement
• Financial counseling services
• Wellness programs
• Employee assistance programs
• Tuition assistance programs

Financial safety nets
• Home warranty insurance
• Homeowners insurance
• Identity theft protection
• Long-term care insurance

What Nontraditional Voluntary Benefits Will Each Generation Prefer?
Taking the list of nontraditional voluntary benefits available, here’s a breakdown applying them to the generations. This list is based on our company’s focus groups with employees from all generations, outlining the nontraditional voluntary benefits that they say best address their financial situations.

Nontraditional voluntary benefits that would appeal to baby boomers include:
• Discount programs
• Financial counseling
• Legal assistance
• Group auto insurance
• Home warranty insurance
• Wellness programs
• Long-term care insurance

Nontraditional voluntary benefits that would appeal to Gen Xers include:
• Discount programs
• Employee purchase programs
• Flexible spending accounts
• Financial counseling
• Wellness programs
• Employee assistance programs
• Child care
• Cybersecurity insurance
• Homeowners insurance
• Identity theft protection
• Long-term care insurance

Nontraditional benefits that would appeal to millennials include:
• Employee purchase programs
• Discount programs
• Tuition assistance
• Employee assistance programs
• Wellness programs
• Flexible spending accounts
• Financial counseling
• Identity theft protection


 

Elizabeth Halkos is chief revenue officer of Purchasing Power, which offers employer-sponsored voluntary benefits. Elizabeth may be contacted at [email protected] [email protected].


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