How Should Employers Adjust Benefits to Attract and Retain Millennials?

Feb 18, 2019
| The Extensis Team
Benefits that Attract Millennials

The workplace is undergoing a significant shift as younger generations have started to make up a bigger percentage of the modern workforce. Couple this with the increased difficulties employers face with attracting and retaining talent, and employers have a major challenge in the coming years.

One generation in particular is causing more issues for employers when it comes to recruiting and retention, and they also happen to now be the largest in the United States labor force – Millennials.

As employers struggle to find talent to fill open positions, they are more often turning to Millennials. However, if a company’s benefit package doesn’t meet the wants and needs of this generation, chances are they won’t be able to recruit them.

A recent study from Prudential took a closer look at the role benefits play in recruiting and retaining Millennial workers. Let’s explore some of the results.

Millennials Have Different Expectations and Thoughts About Work

The first thing the Prudential report says is that “old assumptions about work, career aspirations, and finances don’t apply in many cases to Millennials, nor are they likely to apply to the generations following them.” This is something that all employers, regardless of size, will need to keep in mind.

The report then goes into how Millennials feel about learning and technology in the future as well as the need to adapt to changing times.

75% of Millennials agree that workers will struggle to learn and adapt to digital technology as they get older. Additionally, 66% of Millennials are extremely or somewhat nervous that people will need to learn to work with robots and AI in the future in order to do their jobs.

The need for training and development shows in how Millennials view their benefits, with 48% believing educational benefits are important, compared to 34% of Gen X and only 20% of Baby Boomers.

Financial Wellness is Important to Millennials

Next, the report explores how Millennials view financial wellness, and how it impacts their lives. Around 66% of Millennials report that financial stress has had a negative effect on their own health.

To combat this trend, employees (regardless of age) are increasingly turning to their employers to help attain financial wellness. Further research from Prudential shows employees are more likely to use financial counseling services and tools if they are offered by their employer.

Luckily, many employers understand the importance of their employees’ financial wellness and are taking steps to help improve it. A separate survey found that 82% of executives agreed that their company would benefit from having a financially secure workforce and 78% felt that employers should help employees with financial wellness efforts.

One way for employers to do this is by improving and enhancing their benefits to include various financial wellness perks, such as company matching on 401(K)s and Employee Assistance Programs (EAPs).

Millennials are Worried About the Future of Employee Benefits

One of the biggest concerns that Millennials have about the future of work revolves around employee benefits offered by employers.

72% said they are nervous employers will stop providing healthcare and retirement benefits. This number is slightly higher (76%) amongst Millennial women and Millennial parents. 33% report that they are extremely nervous employers will stop providing healthcare and retirement benefits completely.

The report from Prudential highlights the vital role benefits play in recruiting and retaining Millennial talent. They emphasis that, despite some common beliefs, Millennials do value benefits just as much as other generations.

Employers should be sure to highlight their benefit offerings during the recruiting process, and continuously add and enhance their packages to keep up with expectations. It’s also valuable to give employees options that allow them to customize and tailor their benefits to fit their individual/family needs.

Planning for Retirement Causes Stress for Millennials

The overwhelming majority of Millennials (90%) believe that younger generations will need to work much longer than prior generations in order to retire comfortably.

To that end, 79% of Millennials believe people won’t be able to retire with a sense of financial security in the future.

Employees who delay retirement could have several implications for both employers and workers, which is why it is important for companies to encourage employees to save through benefits like 401(k)s and other retirement funds.

It is also encouraged for employers to offer a company match, which could help to increase employee participation.

Millennials, like Employers, Are Concerned about Rising Healthcare Costs

Another area that Millennial employees are concerned about are the rising costs of healthcare and insurance. The main concern stems from their belief that they expect to live longer, healthier, and more active lives as medical advancements continue in the future.

73% of younger Millennials and 81% of older Millennials believe people will stay healthier later into their lives. However, around 80% with incomes over $75,000 believe healthcare procedures available today will become a luxury in the future.

Employers are in a position to help Millennials worry less about healthcare by expanding the types of plans available to employees through benefits (such as a Health Savings Account) and by providing multiple options to employees.

To Recruit Millennials Employers Must Offer Appealing Benefits

As competition for talent continues to increase, especially with Millennials, employers large and small need to make sure their benefit packages meet the needs of this important generation.

Failing to meet their expectations will hamper recruiting strategies and could also lead to current Millennial employees voluntarily leaving for opportunities that better meet their needs.

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