As generational differences continue to cause shifts in the overall nature of the workforce, benefits managers may want to keep in mind that when it comes to employee benefits, there is no one-size-fits-every-age solution. “Fostering an age-friendly culture can help ensure inclusive workplaces that support employee well-being and business success,” said Lorna Sabbia, head of Workplace Benefits at Bank of America.
Workers of different ages face different challenges in several areas, including physically and emotionally, and both within and outside of the workplace. Considering how age and life stage impacts employees is an important part of providing a workforce where employees can bring their best selves to work. For example, 52 percent of Gen Zers say they don’t make enough money to live the life they want due to the high cost of living, while a larger percentage of Millennials have student loan debt than any other generation. Meanwhile, older generations face unique challenges like preparing more intensely for retirement or ageism – one study found that workplace ageism can cost an estimated $850 billion a year.
By fostering a multigenerational, collaborative workplace culture, employers can create environments that encourage and support employees of all ages. Here are a few ways to do that.
Focus on generational differences regarding overall financial wellness.
According to Bank of America research, the top reasons that employees stay in their current job varies by age. For Gen Z and Millennials, the No. 1 reason is workplace flexibility, while for Gen X and Baby Boomers it’s adequate total compensation. “Gen Z and Millennials are seeking flexibility as they start their careers, start families and build their lives,” said Sabbia. “Older generations like Gen X and Baby Boomers are addressing a different set of financial considerations, like preparing for retirement or sending kids off to college.”
These unique needs based on age group only reinforce the need for benefits that span the generational divide, including everything from student loan support to caregiving to impactful retirement education. They also drive home the importance of using data to measure how effective your benefits are for your employees. “Regularly gathering data from employees can help benefits managers make changes to their benefits offerings in line with employee needs and wants,” Sabbia added.
When it comes to offering competitive compensation packages, employers may want to consider generational gaps there, as well. For example, Gen X’s wage growth has been slow relative to younger generations over the last several years, according to Bank of America research. At the same time, however, Gen X is investing a significantly higher amount of their paycheck. Meanwhile, younger generations have also experienced a rising necessity share over the time, but they have enjoyed some of the fastest growth in wages and salaries in recent years, too.
Besides Gen X, Gen Zers admit they aren’t on track to reach certain milestones, like saving for retirement (46%) or buying a home (50%), while 34% of Millennials admit to having “too many expenses” (47%) and “significant debt” (34%).
“Every employee is unique, and every employee is on a different financial journey,” said Sabbia. “Because of these reasons, it’s even more critical for employers to provide educational resources and financial tools to employees to help them balance their generations’ specific long-term and short-term financial needs.”
Don’t ignore an aging workforce.
Between 2015 and 2050, the proportion of the world’s population over 60 will nearly double. What’s more, employees are working longer in their lives, with only about one-third of Gen Xers planning to retire in the next 10 years. Employers who don’t plan for an aging employee population could struggle to build a sustainable and reliable workforce. “Creating a benefits experience that considers these factors is critical,” said Sabbia. “By offering more tailored benefits, like grandparents’ leave and sabbaticals, employers can better meet the needs of older employees.”
It's also imperative that employers provide financial resources as older adults approach retirement. “Only half of older adults feel confident they will retire when originally planned, and they lack adequate savings for retirement,” said Sabbia. “This signals the need for employer-funded education and retirement preparation support.”
Across generations, caregiving factors into a significant number of employees’ lives.
According to research from Bank of America, 52% of employees identify as caregivers, and 49% of those caregivers are not comfortable identifying as such to their employers because they feel doing so could impact perceptions at work. “Caregiving impacts more employees than employers may realize, from Gen X caring for aging parents to Millennials caring for young children,” said Sabbia.
Perhaps unsurprisingly, caregiving impacts employees in both a mental and financial way. In fact, the average lost lifetime wages, pension, and Social Security benefits for caregivers over 50 is about $300,000. This is a significant cost burden that could be supported by unique caregiving benefits. Given the wide-ranging nature of caregiving responsibilities today, caregiver support such as paid leave and access to financial assistance through vehicles like health savings accounts (HSAs), long-term care insurance, and flexible spending accounts (FSAs) can impact employees of all generations.
By better understanding the variety of generational financial needs facing their employees, employers can help workers of all ages meet their goals. Additional savings vehicles like FSAs and HSAs, diverse healthcare options and financial wellness programs that focus on everything from the importance of college savings accounts to robust retirement plans are all examples of benefits that help employers create well-rounded packages for any age group. This will create a happier, financially healthy, and more productive, multigenerational workforce, which benefits everyone.
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