26 Dec How HR can craft a total rewards plan for the multigenerational workforce
For the first time, there are six generations in the workforce.
And each of those generations has different wants and needs regarding total rewards. When one-third of employees would prefer more benefits over more compensation, according to a Marsh McLennan Agency report published earlier this year, employers can help employees by allowing them to personalize their benefits, Todd Katz, EVP of group benefits at MetLife, told HR Brew.
“The most progressive employers recognize the diverse needs of their workforce, and they’ve gone out of their way to offer a broad set of benefit offerings that allow individual employees to curate benefit plans,” Katz said.
HR Brew spoke with people leaders and workplace experts about how HR can cater their total rewards packages to the multigenerational workforce.
Goes beyond basic benefits. Traditional benefits, like medical, dental, and vision insurance, are “table stakes,” Katz said. “It’s my job to not assume I know what you need, but instead, let me create a [benefits] shelf that’s wide enough that addresses those diverse needs,” he said, suggesting that HR ask, “‘How can I, as your employer, be much more useful to you, as an employee, and take things off your plate?’”
Katz said HR should consider “voluntary benefits,” like pet insurance, identity theft protection, legal resources, and fertility coverage. Rachel Sederberg, senior economist at research firm Lightcast, also recommended avoiding “standard packages” in favor of childcare and eldercare assistance, education reimbursements, and housing advising.
“Every employer has a different risk tolerance or ability to think about different solutions,” Sederberg said. “It’s not if, but when, the pendulum swings back towards the favor of employees, then the employer will have a lot more incentive to think about these offerings. So being prepared is important…because we do know that the workforce is very much changing.
The generational differences. When developing a total rewards strategy for multiple generations, Katz said it can be helpful for HR pros to think about what benefits correlate with traditional life stages, such as growing a family or buying a home, as well as what benefits are most of interest to different age groups.
Mental health, for example, is top of mind for many Gen Z employees, Katz said, “so if your employer is offering an EAP…someone [in] Gen Z is probably much more prone to take that benefit.” Millennial and Gen X employees, on the other hand, might be more likely to need life insurance or caregiver benefits, he added.
While each generation may have benefit preferences, Katz said HR pros should focus on what individual employees want from their total rewards packages. Tina Wang, divisional VP of HR at HCM software provider ADP, agreed, noting that each employee should be able to pick the benefits that work best for them.
It boils down to this. No matter how curated a total rewards package may be, Katz said employees will need guidance, communication, and decision-making support from their people leaders. This is often where HR teams fall short, Wang said.
“Help people understand. 1) ‘What’s being offered to me?’ but then 2) Help them figure out, based on their unique circumstances, what are the right things for them to select?” Katz said. “When employees select the benefits that are a good fit for them, utilize them, and have a great experience, our data shows that they’re more productive. They’re more engaged at work. They’re more loyal. There’s lower turnover.”
To that end, a listening strategy and continuous feedback can be helpful, Wang said.
“It’s important to listen to your employees [and] to hear what’s really important to them,” Wang said. “If a company doesn’t offer, I’ll say part-time tuition reimbursement, and [employees] are asking for, it’s about listening to see if that’s possible.”
Original content by HR Brew. This information is provided with the understanding that Payroll Partners is not rendering legal, human resources, or other professional advice or service. Professional advice on specific issues should be sought from a lawyer, HR consultant or other professional.