While traditional benefits, such as retirement savings plans, health coverage and paid time off remain very important, new research shows that most younger workers are also prioritizing non-traditional benefits.
Now in its second year, LIMRA’s 2023 BEAT Study: Benefits and Employee Attitude Tracker, which provides an in-depth look at workers’ perceptions about their benefits and their employer, finds that flexible work schedules, emergency savings benefits, tuition reimbursement, and financial, mental and health wellness programs are also top priorities for younger workers.
Across generations, flexible work schedules appeared to resonate the most, with large percentages of respondents ranking this non-traditional benefit as very or extremely important:
- Gen Z (76%)
- Millennials (74%)
- Gen X (67%)
- Baby Boomers (63%)
Mental health benefits also registered particularly high with younger generations (62% for Gen Z and 56% for Millennials), as compared to their older counterparts (46% for Gen X and 38% for Baby Boomers). And while financial wellness programs received slightly less interest than mental health benefits, there was still a notable difference when compared by generations (52% for Gen Z, 48% for Millennials, 37% for Gen X and 29% for Baby Boomers).
This year’s study also suggests that younger employees’ satisfaction with their benefits improves the likelihood that they will remain with their employer. According to the research, nearly two-thirds of Millennial workers (65%) and half of Gen Z workers say their current benefits package makes them at least somewhat more likely to remain with their employer.
“While salary remains the number one consideration for many workers, the majority of workers (56%) rank something other than salary as their top priority when evaluating a new employer,” notes Patrick Leary, corporate vice president and head of LIMRA’s workplace benefits research. “Our research suggests younger workers want greater flexibility and support to help them achieve a well-balanced life.”
That said, offering an attractive benefits package is only an advantage if the employees are aware and understand the benefits available to them, Leary further observes. “Our study showed just 55% of employees feel they understand their benefits very or extremely well.”
Not surprisingly, workers with more educational resources available to learn about their benefits are more likely to be knowledgeable and satisfied with their benefits package, which will position them to make better decisions, the study found. Overall, workers report using online resources, in-person meetings, and printed materials the most to learn about their benefits. Millennial and Gen Z workers are more likely than older generations to rely on email, phone, and online chat to learn about benefits.
In observing that workers make benefit selections based on their personal needs, risk factors and recent life changes, LIMRA found that economic uncertainty and the residual impact of COVID have also influenced workers’ benefit choices. In this case, the study found that more than half of all workers said inflation and the potential for an economic downturn affected their benefits decisions.
Millennials and Gen Z workers were more likely to worry about economic conditions and as a result could be more hesitant to spend additional money on benefits, opting instead to hold onto their money in case of economic hardship.
What’s more, a 2020 LIMRA study found that 54% of workers viewed their benefits as more valuable because of the pandemic; according to the current study, 4 in 10 said COVID continues to influence the benefits they select. Again, younger workers were more likely to say concerns about COVID influenced their decisions.
As such, companies should communicate the risks of not having coverage and reinforce the value of workplace benefits, the researchers suggest. “Understanding workers’ mindsets — particularly those in younger generations — will enable employers and providers to better position the benefits available and communicate their value,” emphasizes Leary.
The results of the study are based on a survey of more than 4,000 U.S. employees conducted in January 2023.