In just three years, nearly 63 million Generation Y employees will dominate the workforce, outnumbering the 48 million baby boomers and all other groups of employees at work in 2014.1
These younger, tech-savvy employees, born in 1980 and later, are also known as Millennials, the first generation to come of age at the start of the new millennium. And they’re considerably different than their older counterparts. If you want to help your clients reach Gen Y and keep them happy in their jobs, make sure the benefits plans being offered meet their specific needs and expectations.
To effectively reach Gen Y, employers must take a different approach when designing and communicating their benefits packages. A recent white paper produced by Colonial Life & Accident Insurance Company reveals some distinctive information employers and HR managers should consider about this age group:
• Gen Y tends to be less financially stable than other generations. Only 58% pay their bills on time,2 43% have high credit card debt3 and 70% aren’t building a cash cushion for emergencies.3 They also tend to change jobs frequently: the average 26-year-old has already had seven jobs.4
• Gen Y puts great value on a strong benefits package, yet is woefully underinsured. For 60% of Gen Y workers, benefits are the second most important aspect of job satisfaction.5 However, a recent survey by Harris Interactive on behalf of Colonial Life showed Gen Y is the least likely working group to take advantage of workplace insurance, from major medical plans to voluntary coverage such as life, disability and accident insurance.6
• The workplace is the No. 1 source for benefits information, but Gen Y seems to prefer more personal communication. Despite their “constantly wired” reputation, Gen Y employees don’t use online resources, such as forums or blogs, any more than other workers do. And they’re significantly more likely than other workers to turn to a family member or friend for information.6
Voluntary can attract Millenials
This generation of workers places distinctly different demands on employers than those of previous generations. Millennials thrive on change, innovation, teamwork, immediate feedback and regular rewards and recognition. They are expressive, creative and socially attuned. They also want — and expect — to make a positive impact on their employer quickly. The challenge for employers is to transform these powerful characteristics and behaviors into ongoing engagement and productivity.
Yet despite Gen Y’s unique needs and expectations, only 27% of HR professionals say they offer employment options designed to attract and retain younger workers.7 With Gen Y tying their benefits so closely to job satisfaction, employers need to pay special attention to the benefits needs of this distinctive group of employees or risk losing them to competitors.
Voluntary benefits offer employers an excellent way to enhance their benefits plans and meet the special needs of Gen Y employees. These younger workers make up the largest group of employees who say having a choice in benefits to meet their needs is extremely important for building loyalty.8 The question then becomes: do they truly understand how their benefits, particularly voluntary benefits, can work for them — especially in the event of the unexpected?
Relatively few Gen Ys have accumulated enough assets or personal wealth to carry them through bad times. They are the least likely of any generation to own their own homes, and a majority of Millennials recognize they are not saving as much as they should.9 They need alternative benefits solutions, such as voluntary insurance, that reduce their risk and give them the security and peace of mind they need. But those benefits must be affordable.
In fact, Gen Y says that choice, cost and convenience are key advantages of voluntary benefits. They also believe that voluntary benefits:
• Are more likely to meet their needs.
• Are more affordable than comparable products on the open market.
• Are convenient and time-saving when purchased at the workplace.8
Employers can integrate voluntary benefits with their core group offerings to help Gen Y meet their specific needs and alleviate the economic pressure so many of them now experience. And these plans can be offered at little to no direct cost to employers, which is good news in today’s economic environment.
Communication is key
The workplace continues to be Gen Y’s most reliable source for benefits information, although they don’t depend on it as much as their older colleagues. Fifty-one percent list their workplace as one of their top three resources, closely followed by 50% who seek out information online.6
These younger workers are more likely to rely on their family and friends for benefits information than older workers are. Among Millenials, 40% say they rely on a family member or friend, compared with 27% of the total workforce.6
Employers have a great opportunity to help engage Gen Y employees, who are less than thrilled with the current benefits communication efforts they’re being offered at work. (Only 40% of Gen Y workers give their employers good or excellent marks on their communication efforts.) The following methods can help employers connect with younger employees:
• Use technology when appropriate. Gen Y is proficient in digital technology and social media. They’re rarely detached from their mobile devices. While many employers have embraced web-based, self-service programs as their main tools for communicating benefits because they help speed the enrollment process, they do little to help Gen Y workers make informed benefits decisions. Technology should supplement, not substitute for, face-to-face, ongoing communication with this group.
• Build a foundation with one-to-one counseling. Insurance is too complex to rely totally on technology and self-education. Because Gen Y workers now find themselves responsible for making benefits decisions for the first time in their lives, they can benefit greatly from personal attention. They will appreciate having access to a trained benefits specialist who can talk to them about insurance options, answer their questions, clarify product features and help uncover their most important needs.
Whatever you do, don’t try the same-old, same-old approach with Gen Y. Generation Y promises to reshape the way employers think about their employee benefits strategies. Take action today with a customized approach that will keep tomorrow’s generation of workers fully engaged and productive.
Helen Rodriguez-Burton is a district general agent for the Amarillo, Texas, sales district of Colonial Life & Accident Insurance Company, a leader in providing insurance benefits for employees and their families through the workplace. She can be reached at (806) 356-7839.
FOOTNOTES:
1. Solheim, Shelley, “Seven Strategies for Recruiting Generation Y Workers,” CRN, June 21, 2007.
2. Dugas, Christine, “Generation Y’s Steep Financial Hurdles: Huge Debt, No Savings,” USA Today, April 23, 2010.
3. MetLife, “Y Worry? Gen Y Optimistic About Recovery, Looking for Guidance, Met Life Survey Shows,” press release, Nov. 10, 2009.
4. Fisher, Anne, “To Keep Gen Y Employees, Treat Them Like ‘Rock Stars,’” Crain’s New York, July 9, 2010.
5. Society for Human Resource Management, “2010 Employee Job Satisfaction: Investigating What Matters Most to Employees,” 2010.
6. Colonial Life, Harris Interactive Survey, June 23-27, 2011.
7. Society for Human Resource Management, “Workplace Forecast: The Top Workplace Trends According to HR Professionals,” 2011.
8. MetLife, “9th Annual Study of Employee Benefits Trends,” 2011.
9. Pew Research Center, “Millennials: A Portrait of Generation Next,” February, 2010.
