December 19th, 2018
Millennials and the Evolution of Work
According to reports, by 2030, Millennial employees will make up 75% of the workforce.
Millennials want to be compensated fairly, but also want to do work that has a positive impact on the community and makes a difference in the world. Organizations that stress financial gain as the only goal will face challenges when it comes to recruiting and engaging mission-driven millennials. Companies that focus on a total rewards package are more likely to attract and retain top talent.
When it comes to looking at the big picture of employment, there are a number of easily implemented offerings to entice candidates.
- Workplace Flexibility – Work-life balance is a top concern for millennials. They prefer to have more choices about where and when they work. Companies that seek to recruit and engage millennials should have policies and systems in place to support increasing demands for flexibility among younger workers.
- Digital Transformation – Millennials are the most tech-savvy generation in today’s workplace. They’ve grown up with digital connectivity and expect it at work. Recruiting, training, communication, etc. should have a digital component that aligns your company with the digital and physical mobility that millennials expect.
- Self-Service for Benefits – Millennials expect to receive information and options related to their benefits, via digital platforms, as well as the capacity to make their own decisions. A top-down, take-it-or-leave-it approach to benefits does not engage this DIY generation. It’s critical to provide millennial employees with accessible, understandable options and allow them to personalize their benefits.
According to the Society of Human Resources Management, millennials actually tend to understand their employee benefits less completely than other generations, which may explain why some millennials are less engaged by benefits.
A study by the Employee Benefits Research Institute (EBRI) found that “millennials are less likely than baby boomers and Gen Xers to report that the benefits a potential employer offers are extremely important in their decision to accept or reject a job. Less than one-third (31%) of millennials reported that benefits are extremely important compared with 39% among Gen Xers and 41% among baby boomers.”
How millennials and baby boomers view specific benefits is drastically different:
- Health Insurance – The EBRI study found that health insurance is viewed as the most important employee benefit by all workplace generations by a wide margin. However, millennials value it the least. Over 65% of baby boomers view health insurance as the most important benefit, compared to only 60% of millennials.
- Retirement Savings Plan – While the EBRI study found that millennials value retirement savings plans less than other workplace generations do, a report by Fidelity Investments found that millennials increased their retirement savings rate from 5.8% to 7.5%, a bigger jump than any other generation from 2013 to 2015. Despite the recent acceleration in retirement savings by millennials, baby boomers still save the most — nearly 10% of their salaries.
- Paid Time Off – Millennials value this benefit more than other generations, according to the EBRI study. In fact, 12% of millennials value PTO more than any other benefit, compared to 6% of baby boomers.
- Life Insurance – Group or Voluntary Life: Like PTO, millennials attach high value to life insurance. A paltry 1% of baby boomers viewed life insurance as the most important benefit, compared to 5% of millennials.
- Benefit Choice and DIY – More than any other generation, millennials expect to be able to choose from a list of benefits. Millennials are also far more comfortable than other workplace generations in taking a lump sum of money to purchase their own benefits. 25% of millennials favor that option, while less than one in five baby boomers feel the same, according to EBRI.
Companies looking to recruit and engage the millennial workforce should offer customized packages that this generation wants but also understand how to communicate effectively and deliver those benefits in preferred ways. Baby boomers and millennials do not view benefits the same, so understanding what engages millennials is key in attracting and retaining millennials for a long tenure.
Contact our Employee Benefits team at Brown & Brown for more information. Our consultants can assist you in developing a competitive Employee Benefits package that fits your business needs.
For additional ways to engage the millennial workforce, read our article on Millennials and “Out of the Box” Benefits.
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