Different strokes for different folks
Rob Gray, November 04, 2016
The typical age range of employees is getting wider, so how do you ensure your benefits offering appeals to all?
For the first time five generations of employee are working side by side in UK organisations. Significant differences in their needs, motivations and situations could pose a big challenge for employers when it comes to structuring benefits policies.
What works well for one age group may have limited appeal for another. So to get value for money and drive recruitment and retention, employers need a better grasp of which benefits work for which elements of their workforce. Clearly those in Generation Z (born mid-1990s onwards) have differing aspirations and circumstances to workers in their 60s and 70s.
“In today’s modern workplace there are more generations working together than ever before,” says Donna Martin, director of compensation and benefits EMEA at American Express GBT. “Companies need to understand what will motivate each generation.” Here are some tips on what to take into account...
In the Forum Generation Report (a survey of 250 Generation Z employees by The Forum Corporation) 67% of respondents rated salary to be their most important criterion. More illuminatingly, 18% considered time off benefits such as a generous holiday allowance, birthdays as leave, or duvet days as the most attractive thing about a job, while 23% prized flexible working and work/life balance.
The difficulties younger people face in getting on the housing ladder are well-documented. This has encouraged some employers to offer mortgage subsidy benefits. For instance, in 2014 global accountancy/consultancy firm KPMG launched preferential employee rate mortgages in association with Yorkshire and Clydesdale banks, while Starbucks offers deposit loans for renters.
At a time when many graduates are entering the workforce encumbered by large student loans, financial planning education and debt advice are also greatly appreciated by younger employees keen to get their personal finances on an even keel.
Employers are thinking twice about the spiralling costs of PMI. Rachel Riley, managing director of corporate healthcare trust specialist WPA Protocol, says younger workers often find cash plans more appealing. “For a 20-year-old who feels invincible, they don’t care if they can get a hip replacement paid for. To pay for a dental check-up, new glasses or physio for a football injury is more appropriate.”
Martin says pensions are a point of difference. “While many benefits such as private medical care, life insurance, cycle-to-work schemes and so on are now expected by employees of all ages, the area where I see the biggest generational difference is in attitudes to, and expectations of, pensions,” she says.
Younger generations, says Martin, tend to be more aware of legislative changes and are keen to be involved in making investment decisions for their pensions; tailoring these to meet their individual preferences.
The squeezed middle
Workers in the 30 to 49 age bracket are often referred to as the ‘squeezed middle,’ as they’re frequently under great pressure at work and often dealing with the twin worries of young children and ageing parents. Strong mental and physical wellbeing policies together with flexible benefits that allow for tailoring to complicated scenarios appeal to this group.
According to research from Allianz Global Assistance, 72% of UK workers are interested in receiving eldercare-related benefits from their employers. That is a significant rise on the 48% expressing an interest when the research was previously carried out in 2014.
Government research released last year as part of Ros Altmann’s work as business champion for older workers found nearly half of over-50s want to keep working between age 65 and 70. For some it is a matter of financial necessity. But for others it is a means of keeping stimulated by interacting with others. By 2022 the number of people in the workforce aged 50 to state pension age is predicted to reach 13.8 million. Moreover, 44% of retirees in their 70s say they would like to work.
Altmann’s research found that one in four over-50s would be interested in taking a few months off and then returning to work, as an alternative to retirement. Gap breaks allow employees to recharge their batteries after years of full-time work and return refreshed.
Family care leave is also a benefit appreciated by this demographic. Health and wellbeing policies should take account of older workers’ needs, including support for women through the menopause.
Nick Summerton, a practising GP and medical director at Bluecrest Wellness, which provides health screenings to businesses such as Danone and Capita, believes a one-size-fits-all approach to health screening benefits is a mistake that undermines wellbeing investment. “An employer that wants to optimise its health spend may look to offer packages that include ECGs and advanced PLAC testing for the arterial build-up of unstable fatty deposits that can cause heart disease and stroke in an older workforce, while focusing on more general fitness and lifestyle checks for younger employees. For example, VO2 Max calculations (the amount of oxygen you use), body composition and cholesterol.”
Older people also frequently welcome the more ‘fun’ benefits, says Amex GBT’s Martin. Her company’s ‘Achievers’ recognition programme, a peer-to-peer points-based platform that empowers employees to recognise each other’s achievements, helps bridge generational gaps in the workplace and is very popular with older members of the team.
Beware lazy assumptions
Evidence pointing to people starting full careers later, having children later, and buying property later shakes up the idea that reaching a certain age means a particular set of benefits is right. An appealing benefits package must be rounded to support employees wherever they are on their life journey rather than presuming particular benefits are right for staff of a certain age, cautions David Fairs, a partner in KPMG’s people advisory practice.
“Some employers are just beginning to think about how they adapt to this new world,” he says. “Their challenge is twofold – understanding who needs what within their workforce and making them aware of the benefits open to them. No longer being able to easily segment benefits by age, employers will need to use more sophisticated analytics to assess the needs of their staff and then tailor communications accordingly .”