Tailor your benefits to attract gen Y

If you’re looking to hire and retain generation Y workers, you might want to reconsider your benefits and communication plans.

As more gen Ys (typically, those born after 1979) enter the workforce—and more baby boomers leave—employers will need to understand gen Y’s preferences and communication styles, especially with respect to workplace benefits.

“The ability to recruit and retain younger workers is quickly becoming essential for employers to ensure long-term business success, especially as baby boomers begin to retire in increasing numbers,” says Stephen Bygott, director of marketing programs and research at Colonial Life, which recently released a white paper on the topic, “Pump Up Productivity from the Next Generation.”

“But gen Y has different needs, expectations and preferences than previous generations, so companies need to take a different approach when it comes to designing and communicating their benefits packages. Those who don’t consider changes could risk losing their competitive edge and may be left behind.”

Colonial Life’s white paper offers factors and tips for employers to keep in mind when tailoring their benefits plans to gen Y.

Gen Y tends to be less financially stable
“Relatively few gen Ys have accumulated enough assets or personal wealth to carry them through bad times,” says the paper. “They are the least likely of any generation to own their homes, and a majority of millennials recognize that they are not saving as much as they should.”

The study reports that only 58% of gen Ys pay their bills on time, 43% have high credit card debt, and 70% aren’t building a cash cushion for emergencies.

What’s more, gen Ys are worried about their financial future. According to the study, 67% of gen Ys believe government plans will not be available to them when they retire and that they will have to rely more on employer-sponsored retirement plans and personal savings.

Gen Y values benefits plans yet often fails to take advantage
“One common employer misconception is that older employees value benefits more than younger employees,” says Anita Potter, assistant vice-president of group research with the Life Insurance Marketing and Research Association. “In fact, when it comes to benefits, younger employees value benefits nearly as much as older employees.”

However, gen Y is also the least likely to take advantage of workplace insurance, according to the study. This includes major medical plans, as well as voluntary coverage such as life, disability and accident insurance.

So why the disconnect between what gen Ys want and what they actually do?

“There appears to be an information gap in terms of the types of insurance they have and what they might actually need,” says the paper. “Gen Y employees might want protection, but they also want to be able to meet their financial obligations comfortably. They need alternative benefits solutions, such as voluntary insurance, that reduce their risk and give them the security and peace of mind they need.”

Gen Y may be “wired,” but it also wants personal communication
Gen Y’s reputation as being constantly connected to computers and mobile devices has encouraged some plan sponsors to embrace Web-based, self-service programs. While gen Y is likely to respond to such initiatives, the value of face-to-face communication should not be underestimated.

“Something as complex as insurance can’t be effectively communicated by relying totally on technology and ‘self-education,’” says the paper. “For the first time in their lives, many gen Y workers are responsible for making personal benefits decisions. They’ll find it invaluable to have access to a trained benefits specialist who can talk to them.”

Opportunity to improve benefits communication
“Benefits communication emerged in the research as a clear opportunity for employers to more strongly engage gen Y workers,” Bygott says. “These workers give employers low marks for the effectiveness of their benefits communication, and gen Y women in particular are much more likely to say the communication they receive about their benefits is not at all informative, including cost, what’s covered and what they need.”

The white paper outlines numerous tactics and tools employers can use to communicate benefits more effectively with gen Y workers, including the following:

  • implementing one-to-one counselling;
  • using appropriate technology for the message;
  • using multiple communication methods; and
  • making content more interactive.

“As benefits decision-making continues to shift more toward employees, gen Y workers will become more eager for the products and information they need to manage their personal financial security,” says Bygott. “Employers have a tremendous opportunity right now to create a greater return on investment by evaluating their benefits offerings and communication methods to appeal to gen Y. The result will be a more loyal, engaged and productive workforce.”

The complete white paper is available at coloniallife.com/Newsroom/WhitePapers.aspx.