Navigating Employee Benefit Expectations in a Multi-Generational Workplace

As the last Silent Generation workers retire and Generation Alfa prepares for their first summer jobs, we witness a brief but exciting momentum—six generations collide in the workforce for the first time, bringing unique values, needs, and expectations.

Understanding how different they all are can be detrimental to the longevity of a company.

While competitive salaries and traditional benefits will never lose importance, employee priorities are expanding. Demand for flexible work is increasing, work-life balance takes center stage, and workplace wellness trends are changing as mental health grows in recognition.         

This article explores these shifting benefit priorities and what companies can do to match such heterogeneous expectations in a multi-generational workplace.

The Changing Landscape of Workplace Benefits

There is a symbiotic relationship between benefits, the workplace, and its employees. When one changes, the others usually follow.

Historically, employers offered mainly health insurance and retirement plans, which we now perceive as "traditional" compensation. They are still expected, indispensable, and highly valued for the security they offer.

However, emerging trends and technologies have created space for new ones.

For example, digital expansion allows employees to work from anywhere, while technology has greatly simplified the benefits experience.

Moreover, unforeseen factors like the COVID-19 pandemic fortified the importance of better flexibility and work-life balance, showing that employee well-being extends beyond physical health.

These "modern" benefits are turning from nice-to-have additions to must-haves for businesses that want to stay competitive.

But how can they know which ones to invest in with an age-diverse workforce?

Employee Benefits Expectations by Generation

According to the U.S. Department of Labor, the generational composition of the labor force is as follows:

• Millennials – 35%

• Gen X – 31%

• Gen Z – 18%

• Baby Boomers – 15%

The Silent Generation is still represented with 1%, while the oldest of Gen Alfa are reaching the minimum age for employment at 14. However, since their involvement is minor, the main focus falls on the remaining four generations.

Recent Forbes research on workplace benefits trends by generation shows a clear distinction in preference in each age group.

We summarize its findings, along with other data, below.

Baby Boomers: Pension Plans, Flexibility & Team Recognition

Baby Boomers, born between 1946 and 1964, represent 15% of the workforce. They have a strong work ethic, are loyal and committed, respect authority, and value teamwork. As such, they prefer a more traditional workplace.

Surprisingly, that doesn't fully reflect their benefits expectations.

According to the Forbes research data, the top three HR benefits for job satisfaction were:

• Flexible work options (76%)

• Flexible PTO and vacation (66%)

• A tie between team recognition programs & flexible parental leave (60%)

These trends follow decades of poor work-life balance and rigid work structures, showing that this generation is adapting, prioritizing well-being, and preparing for retirement.

However, a major issue arises as thousands of Boomers enter retirement age yet can't do so because they are not financially ready.

Therefore, in addition to allowing them more flexibility, employers should ensure their employees have good pension and savings plans and investment advisors who can help them build and preserve wealth.

Generation X: Flexible Work, PTO, Mental Health Coverage & Training

Gen X represents employees born between the mid-sixties and 1980, accounting for 31% of the workforce. They are resourceful, adaptable, independent, and highly invested in their jobs. At the same time, unlike Boomers, they lean towards a more balanced work-life schedule.

That may explain why they consider flexibility to be an essential part of job satisfaction. In fact, the top three benefits for them were:

• Flexible work options (73%)

• Flexible PTO and vacation 67%)

• Mental health resources (66%)

Although a top priority, the percentage of Gen X employees who want flexible work options is the lowest among generations. At the same time, they introduce the mental well-being conversation in the workplace, with their benefit of choice being mental health insurance coverage.

For their career growth, 50% of Gen X employees wanted companywide training from other departments, hinting at the importance of continuous learning, upskilling, and reskilling for this generation of workers.

Finally, since Gen X has been in the workforce for some time now, retirement plans like traditional or Roth 401(k)s can also be valuable additions to secure their financial independence later in life.

Millennials: Mental Health, Recognition, Flexibility & DE&I

Millennials, born between 1981 and 1996, are currently the largest age group in the workforce, with 35%.

They are a complex generation with conflicting characteristics.

Some would say they are disengaged or entitled, job hoppers with poor work ethics and disloyal, but those are merely Millennial myths. Instead, these employees are skillful, educated, out-of-the-box thinkers, and hard-working—but only when employers match this with recognition and compensation.

Moreover, according to the Forbes findings, their benefit preferences are similar to those of Gen X.

However, more than any other generation, Millennials value mental health resources (68%), especially insurance coverage and dedicated office spaces for processing (54%).

Research also shows they value diversity and inclusion, as 83% were more engaged when their companies promoted an inclusive culture.

In summary, employers should consider competitive salaries, rewards and recognition programs, DE&I programs, flexibility, and mental health benefits to attract or retain Millennials.

Generation Z: Flexible Work, Parental Leave & Cash Incentives

Gen Z employees, born after 1996, were the latest to join the workforce, and now, at 18%, they are a larger category than Baby Boomers. Like their Millennial predecessors, they have also been stereotyped as lazy, job hoopers, and demanding.

However, in reality, they are tech-savvy, digitally fluent, and tend to be hard-working under the right circumstances. They also set boundaries and are less tolerant when employers threaten their work-life balance.

Gen Z's work ethic and values are nuanced just as much as their benefits expectations.

These employees prioritize flexible work, and as they begin family planning, there is also an increasing demand for flexible parental leave options.

Research on Gen Z in the workplace also shows that:

• This generation measures success through salary.

• They are equally motivated by a competitive salary and fulfilling job.

• They prioritize good employee benefits over office perks.

• Cash rewards motivate them more than other incentives for a well-done job.

Other studies point to the importance of retirement benefits for younger individuals, as 65% of undergrads wouldn't accept a job without a retirement plan, such as a company-administered 401(k).

Skill building was also important to them for career success, and almost two-thirds agreed that their employer's values must align with theirs.

How to Create a Benefits Strategy for a Multi-Generational Workforce?

Between the shared demand for flexibility and employees' unique benefits preferences, the multi-generational aspect of the workplace raises an important question.

How can companies match employee benefits to satisfy evolving workforce needs?

Studies are helpful, yet they can't account for the entire spectrum of factors at play. The workforce is a complex mix of characters, personalities, and experiences that go beyond age.

Hence, there isn't a one-size-fits-all solution.

Instead, a better response would be to create a benefits strategy unique to the company, matched with a tailored benefits package that reflects the specific individual needs of employees.

A benefits strategy for a multi-generational workforce should be flexible, inclusive, and relevant to all age groups.

To achieve it, companies should:

• Listen: Conduct surveys of focus groups to pinpoint exact benefits expectations among different generations of employees.

• Act: Create customizable benefits packages that allow employees to choose what best fits their needs.

• Adapt: Use feedback to regularly review and improve the strategy to stay aligned with the ever-changing workforce and benefits trends.

The Future of Employee Benefits: What Should We Expect?

It’s difficult to predict a specific trajectory for the future of employee benefits. However, as the workforce prepares to welcome Gen Alfa, there are hints on what might come next.

This future generation of workers, and the largest in history, are digital natives born in the era of smartphones and social media. That makes them highly tech-savvy and digitally empowered but could result in shorter attention spans.

Thus, integrating technology and gamification into traditionally non-digital benefits may continue, increasing interest in tech-enabled wellness programs, telehealth, on-demand therapy, AI collaboration and productivity tools, and more.

Moreover, the heavy influence of the COVID-19 pandemic could completely shift Gen Alfa to virtual learning and working. At the same time, their sustainability and social responsibility may raise expectations for companies to provide “green” benefits that align with their values.

The bottom line is that every generation has its expectations and drivers for engagement at work. As the next one in line, Gen Alfa will have them too.

Companies must see the cues and adapt on time. Otherwise, they risk losing or missing out on top talent and may face many challenges in the ever-changing workplace and benefits landscape.