6 ways to offer the right benefits to today’s multigenerational workforce

As the global workforce continues to evolve, one of the most significant and obvious changes has been the increase in the number of generations working side by side.

HR and benefits leaders are coming to grips with the reality of the diversity of perspectives, experiences, needs, expectations and preferences among the four (soon to be five!) generations that comprise today’s multigenerational workforce.

A benefits program that supports a positive employee experience for each generation will help companies hire better people, heighten employee engagement and reduce employee turnover. Six proven, practical strategies and use of HR data can help benefits leaders ensure their program is up to the challenge of engaging a multigenerational workforce.

The multigenerational workforce we’re talking about

Before diving into the six recommended strategies, it’s important to understand the characteristics and needs of each generation in today’s workforce. Baby boomers, Generation X, millennials, and Generation Z are the generations that make up the bulk of today’s workforce. Each of these generations grew up in different eras and has had different life experiences, all of which directly influences their needs and expectations around employee benefits.

Demographers don’t all agree on what years bound each generation, but here is a generally accepted breakdown, with quick insights from research by the University of North Carolina Kenan-Flagler Business School: 

• Baby boomers. Born between 1946 and 1964, baby boomers still account for roughly 19% of the U.S. workforce. But, not only are the boomers getting older, their rate of retirement has begun to accelerate, according to Pew Research. This generation values stability and job security but also seeks personal growth and development.
• Generation X. Born between 1965 and 1979 and sometimes called the “Sandwich Generation,” Gen X accounts for nearly 36% of the U.S. workforce. They’re often overlooked because of the much larger generations before and after it (Gen X number about 62.5 million people). Sometimes viewed as “skeptical” or “negative,” they tend to be independent and have learned to thrive on change.
• Millennials. Born between 1980 and 1995 and numbering an estimated 80 million, millennials account for 39% of today’s U.S. workforce, a share that’s expected to hold steady for the next few years at least. As the most ethnically diverse generation, millennials will have a large impact on DEI initiatives, and they’re the first to grow up with 24/7 access to the internet.
• Generation Z. Born between 1996 and 2010, Gen Z already represents about 6% of the U.S. workforce, the oldest of whom is just entering the workforce. As John Hopkins researchers wrote, “Gen Z workers are starting their careers during a time of growing inflation, mounting student loan debt, a housing crisis, and an impending recession […] On the whole, Gen Z has been dealt a difficult hand, and it’s defining how they engage in work.”

In addition, two other generations may also be present in some workforces. One segment, the Traditionalists, or “the Silent Generation,” is gradually becoming an even smaller share of the workforce; their youngest member is now 77 years old.

The other small segment, Generation Alpha, will soon be growing as a slice of the workforce. They have been born since 2009 and grown up in a fully digital world. By understanding the values and priorities of each generation, employee benefits leaders can tailor their approach to meet the specific needs of a diverse workforce. More specifically, bridging the generational divide within any organizations can:

• drive greater operational effectiveness
• increase competitiveness
• widen a company’s appeal to customers and job prospects of all ages
• build long-term resilience within the company culture
• reduce turnover, and
• improve collaboration.

A different perspective

Looking at it from another perspective, failure to heed the differences among the generations is likely to have its own pitfalls because of the importance employees place on their relationships with HR and their attitudes toward their benefits.

For example, a survey of 1,000 U.S. workers by Forbes Advisor found that 63% of employees feel their relationship with HR directly affects job performance and company trust. The Forbes report indicated that workers on average rate their job satisfaction at 5.5 out of 10. However, when diving deeper into generational differences, Gen Z and millennials — cohorts representing the future workforce — report below-average satisfaction scores.

Consider the similarities

As important as it is to understand the differences among the generations in a workforce, it’s equally important for HR and benefits leaders to have a good understanding of the attitudes, behaviors, and beliefs they have in common. This will make it easier to create an inclusive benefits program.

One survey examined how the generations view each other, what they expect from their employers, and how they define ideal leaders. It identified five values that span all generations in today’s workforce:

1. The desire for our organizations to succeed
2. Characteristics of a good leader (foster organizational cultures that encourage leaders to lead by example; be accessible; serve as coaches and mentors; and challenge employees and hold them accountable)
3. Some measure of success in our careers, regardless of our age
4. The realization that we are all aging; all generations have different needs at different life stages, and
5. We’ll face new, unanticipated challenges in the future.

Looking specifically at the generational nuances in benefit preferences, the Forbes Advisor survey found that Gen Z, Gen X, and Baby Boomers all prioritize flexible work options, followed by paid time off and paid parental leave.

6 strategies to offer multigenerational benefits

In addition to the characteristics the generations share, each one has a different view of what it wants from employee benefits. For example, the Forbes Advisor survey found that millennials, although placing flexibility at the top of the list like the other generations did, rate mental health resources as the second most important benefit for overall job satisfaction.

HR teams may find themselves in a quandary over how to develop effective strategies that cater to the needs of employees from all generations. Here are six strategies that will help HR professionals more effectively provide multigenerational employee benefits.

1. Use data to get to know the workforce

This is your first step: Use data that the company or its benefits administration provider already have to understand your employee demographics. By analyzing data on employee demographics, behaviors and engagement levels, benefits leaders can gain a deeper understanding of their employees’ needs.

For example, HR data may reveal that baby boomers are seeking more opportunities for career growth and development, while millennials value work-life balance and flexible schedules. Armed with this knowledge, benefits leaders can create a benefits package that addresses the specific needs of each generation.

2. Use focus groups or listening tours

Use the groups to get specific input for each generation. Direct surveys are critical to learning the specific needs of different generations and getting a thorough understanding of each group’s needs, preferences, and behaviors. This insight is essential when creating a customized and effective benefits package.

Focus groups and listening tours with each generation in the workforce give benefits leaders a better understanding of what drives and motivates all of their employees and will help them tailor their benefits package to better suit the needs and preferences of each generation.

It’s also important to tailor the type of information gathering to the preferences of different generations. While Baby Boomers may prefer face-to-face meetings or getting printed materials, Gen Z employees may prefer digital channels, such as email or social media.

3. Ensure core benefits address older and younger employees

The core benefits in the package should address the requirements of older and younger employees to ensure everyone is cared for. For example, older employees may require more health benefits, while younger employees may prefer more opportunities for career development.

Employee benefits leaders can also consider incorporating non-traditional benefits that appeal to all generations, such as mental health support services or flexible work arrangements.

Conducting regular surveys and gathering feedback from employees on their satisfaction with the current benefits package will help identify any gaps or areas for improvement. Additionally, employee benefits leaders can also consider offering a flexible benefits plan where employees can customize their benefits according to their individual needs.

4. Communicate

HR must communicate effectively across all generations and tailor communications to each generation. Baby Boomers, for example, value job security and loyalty to their employer. On the other hand, Gen Xers prioritize work-life balance and flexibility. By understanding these differences, you can tailor your communication strategies to better resonate with each generation.

Regardless of the generation in mind, HR leaders need to make sure communication is clear, easy to understand, and sent through multiple channels. Keep your messages simple and concise: Gen X, millennials, and Gen Z have grown up in a digital age where information is readily available. They prefer short and straightforward messages, so keep your communication concise and to the point.

Consider the digital approach through email, video and social media platforms for millennials, and, in addition to digital options, more traditional methods such as paper, print and face-to-face meetings. Consider personalizing the message. Baby Boomers may appreciate a more personal touch, while millennials might prefer a casual tone.

5. Solicit feedback throughout the year — and act on it

Don’t just do an annual benefits survey. Regularly gathering feedback gives HR professionals the opportunity to improve on the annual benefits package that is usually unveiled for annual enrollment. Ongoing feedback ensures the benefits package remains effective and up-to-date, and that it’s based on the changing needs and preferences of employees from different generations.

Here, too, it’s important to be aware that different generations may have different preferences when it comes to how they prefer to give and receive feedback. While some may prefer face-to-face conversations, others may feel more comfortable giving feedback anonymously through surveys or suggestion boxes.

Remember also that technology can be a valuable tool in gathering employee feedback. Consider using online surveys, social media polls or employee engagement platforms to collect feedback on benefits. These methods are not only convenient for employees but also allow for efficient data collection and analysis.

Lastly, it is crucial to act on the feedback received from employees. This shows them their opinions are valued and also leads to tangible improvements in benefit offerings. Keep employees updated on any changes made based on their feedback, and continue to seek their input throughout the year.

6. Measure then adjust

Measuring benefits utilization over time and making adjustments based on employee feedback is crucial for creating a successful employee benefits program. A strong benefits administration partner can make it easier to do these types of data reviews.

HR leaders can create a benefits program that truly meets the needs and preferences of their employees. Remember, it’s not just about offering a wide range of benefits but also consistently evaluating and adapting to ensure maximum utilization and satisfaction among employees.

To remain competitive today, HR teams should consider providing benefits that can cater to the multigenerational workforce. It’s a critical weapon for keeping employees engaged and productive. Effective communication, personalized core benefits, feedback assimilation and usage monitoring play a crucial role in keeping benefits offerings in line with the expectations of employees. Using the six strategies defined here, organizations can provide an effective and appealing benefits package suitable for all employees across all generations. The results: fostering a culture of engagement and inclusion to support the business and its employees.