Employers usually aren’t excited about making significant changes to benefits plan designs because they require a large amount of effort, planning and communication, as well as financial investment.
Yet it’s important to understand that meeting the demands of a workforce ranging from those fresh out of school to those working well past the typical retirement age requires more than a traditional employee benefits approach.
With so much generational diversity in the workplace, employers need to evaluate how well their existing benefits plan meets the needs of workers in the early, mid- and late career stages, considering how a broader range of voluntary services and choices could better address multiple generational needs, improve health and enhance member engagement.
Here’s a brief description of the career stages and what employees in these stages may be looking for.
Early career – Employees new to the workforce may not yet have experienced health-related costs other than those associated with minor injuries or short-term illnesses. Their interest in benefits may be less focused on long-term risk issues and more on current lifestyle needs. One Sun Life survey indicates younger employees tend to spend less time reviewing their benefits (30% spend less than 15 minutes), so there is a challenge in even getting new employees engaged with their plan.
Earning entry-level incomes and perhaps carrying student debt, this group may not be that concerned about managing day-to-day health expenses such as vision care and dental work. These employees may be less attracted to traditional benefits packages and look more favourably on healthcare spending accounts (HCSAs), as well as lower-premium, less-comprehensive coverage options and the ability to trade some benefits for cash or vacation.
A 2012 Sun Life plan member survey also suggests a preference for personalized or voluntary benefits. For example, rather than spending benefit dollars on prescription medications, younger workers may want benefits supporting personal health and wellness, such as reduced-cost gym memberships or on-site facilities for fitness and health promotion.
In the early stages of a career, employees want to develop their skills through training, mentoring and professional development. This is also the beginning stage of financial planning.
Employees may benefit from counselling on how to pay off debt and save for future expenses such as home ownership or travel. While generally healthier than their older colleagues, these employees also report higher levels of perceived stress, so supporting mental health through peer or employee and family assistance programs (EFAPs) may be a priority.
Mid-career – Depending on their income level, mid-career employees may have a tough time balancing career and family needs. This age group may be caring for not only their children but also their aging parents. Hefty mortgages and family expenses may create financial pressures, driving greater interest in benefits for dependents, as well as disability and/or critical illness insurance to provide risk protection against income loss. Typical core health benefits are best aligned with these employees’ needs, but employers can also help address their financial concerns through voluntary benefits providing discounts on purchases such as home and auto insurance.
Since the onset of chronic diseases such as mental illness, diabetes and arthritis is more likely at this stage of life, mid-career employees may benefit most from workplace health and wellness programs. These programs help identify early stages of chronic disease and offer resources to maintain good health or improve health status. Non-traditional benefits such as easy access to online health resources, time off to care for a sick child or parent, flexible work arrangements and healthy take-out meals available in the company cafeteria can help time-starved employees better balance home and work life.
Mid-career is also when many people start thinking about what they’ll need in the future and what their retirement will look like. These days, with dwindling access to retiree benefits for private sector non-unionized plans, employees may want access to advice to understand what their future benefits needs may be and how this will impact their retirement savings plans. They will also want to explore options for rolling over health benefits in retirement and adding insurance coverage for critical illness and long-term care.
Late career – Older employees are more likely than other age groups to have at least one chronic disease and be on at least one chronic disease medication—perhaps an expensive biologic. While health issues may force some to retire earlier than planned, the high cost of medications and other healthcare needs may encourage others to stay in the workforce longer.
These employees are often more focused on saving money for retirement— and may need help doing so—but they don’t necessarily factor health costs into their planning. If they don’t have retiree health benefits through their company, they may be surprised to discover there is less public protection than they thought for expensive prescription drugs, mobility aids, home care and long-term care. Retirement planning and counselling should include education on how to manage potential health costs.
With a higher prevalence of chronic illness, older employees would benefit from services to detect risk factors and manage chronic diseases. They may also want help navigating the complexities of private and public healthcare to access resources in a timely way. Also, they may need support for episodic absences due to ill health or caring for a sick spouse. This group may no longer be as concerned about dependents and may show interest in more personalized benefits such as massage, physiotherapy and travel insurance.
Considering your options
Plan sponsors have a variety of ways to determine whether their current benefits do enough to meet employee needs and help with attraction and retention. Employee feedback, surveys and industry research—as well as analysis of claims patterns, employee choices in benefits selection, and public and private programs—can help employers assess which benefits are relevant and have perceived value in the workplace.
As well as looking at current needs, it’s important for employers to project how those needs and employee behaviours might change in the next few years. Most companies continue to offer fixed or traditional benefits plans because they are simpler, easier to communicate to employees, allow greater economies of scale and spread of risk, and have comparatively lower administration costs. Yet flexible benefits plans—whether they’re set up as optional components in a traditional plan, as an HCSA or as a modular plan allowing choice between different packages—can be tailored to meet the diverse needs of a multigenerational workforce.
Portable voluntary or personal benefits are another possible solution for going beyond traditional offerings to expand the range of benefits. Fully funded by employees, voluntary benefits have the potential to better meet employee needs without adding costs for the employer or having to negotiate a change in benefits that may be part of a collective agreement. Through agreements between employers and service providers, employees can access services and products at lower prices than what they’d get on their own. Plus, benefits can often be purchased through payroll deduction without individual underwriting, making it easy for employees.
Yet despite these advantages, most employers have not yet embraced voluntary benefits. A 2011 LIMRA report, The Building Blocks of the Canadian Employee Benefits: Employer Perspective, found while more than 60% of employers were familiar with the concept, only 39% of that group actually offered voluntary benefits to their employees—even though nearly half agreed personal products provide a way to offer a wider array of benefits to employees.
The International Foundation of Employee Benefit Plans’ 2011 Employee Benefits Survey says 47% of Canadian organizations (both public and private) offer some type of voluntary benefit, most commonly life insurance (90%), accident insurance (43%) and critical illness or cancer insurance (39%). Voluntary critical illness is growing in popularity, but the employee-pay-all portion of a benefits plan could include a lot more generationally relevant options: insurance covering everything from accidents, travel, automobiles and homes, to pets and long-term care. Enhanced coverage for typical core needs (e.g., dental, disability, health, vision, life) could also be offered as voluntary benefits.
Employee benefits plans could include other relevant services and resources as well, such as training or educational programs, credit counselling, childcare, referral services for eldercare, financial planning, health and wellness programs, and flexible work arrangements tailored to different age groups.
Time for a talk
Regardless of the benefits available through the plan, today, there are more options to communicate with members of all generations to help them understand and take advantage of their benefits. Technology advancements have increased the potential to have more interactions with members across more channels (e.g., web, mobile, social). And employees of all generations—particularly younger workers—have increased expectations for simple communications, 24-7 multi-channel access and personalized contact.
By recognizing different communication preferences and life stage needs, employers can help ensure employees appreciate the options their plan offers. Examples might include a proactive, simple welcome program to ensure new employees get set up; multi-channel (paper-, digital- and phone-based) options for purchasing or taking advantage of voluntary products or services; or face-to-face or webinar education on key topics.
Even if plan sponsors aren’t considering significant changes in plan design over the next few years, an evolved communication approach and a host of benefits options outside of traditional benefits can enhance engagement, promote staff development and encourage retention of key employees. And that’s an outcome workers of all generations will value.
Marilee Mark is vice-president, market development, group benefits, and James McKay is vice-president, market development, client solutions, with Sun Life Financial.
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