Tailoring the Benefit Mix to Engage Millennials

As the most debt-ridden generation, Millennials are burdened by financial stress

By Stephen Miller, CEBS Aug 10, 2016
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Debt-burdened and social-media saturated Millennials present a unique set of challenges for employers. Like all generations, they have their own shared history and are motivated differently than older workers. Employers should adapt their benefits strategies by offering flexible and self-directed programs to foster better engagement and support a more productive Millennial workforce, new research suggests.

Making an Impact

A July survey report by the Futurestep division of consultancy Korn Ferry looks at what matters most to Millennial workers.

In the survey, nearly 1,000 executives from around the globe were asked what their Millennial employees value from an employer. The largest percentage of respondents (28 percent) said the "ability to make an impact on the business" matters most to Millennial employees.

When asked what will make a Millennial choose one job over another, 38 percent said "visibility and buy-in to the mission and vision of the organization."

"It's clear that Millennials want to know what their organization stands for and how they can impact the company's mission," said Jeanne MacDonald, president of global talent acquisition solutions at Los Angeles-based Futurestep. "It's often difficult for older managers to find or take the time to offer the feedback that Millennials crave, but it is critical in helping them understand how their role fits into the greater organizational strategy."

The survey also revealed differences in work styles, with nearly two-thirds of respondents saying Millennials are less likely than other generations to work long hours. More than half of respondents said it is equally or more important for Millennials, compared to other generations, to find a job near family.

"Bosses of other generations who feel they show their own worth by working long hours need to understand this is not the case for Millennials and respect their time on and off the job," said MacDonald.

"While pay is still of the utmost importance to Millennials, flexibility at work has never been as important to a generation," concurred Kim Lear, founder of Minneapolis-based Inlay Insights, a firm that helps organizations prepare for the workforce and marketplace of the future.

"From yoga classes at lunch to bringing a dog to work, 46 percent of Millennials recently surveyed listed flexibility as more important than money," she noted, citing 2016 Willis Towers Watson research findings.

Meeting Financial Burdens

However, financial security, notably long-term financial security, still plays a critical role in attracting and retaining Millennial talent.

Saving enough money for a comfortable retirement is the most common financial stress inducer, even for Millennials, August survey results from Schwab Retirement Plan Services found. Despite having more time to accumulate retirement savings, 38 percent of Millennials named saving for retirement as a significant source of financial stress—more than cited monthly expenses (29 percent), credit card debt (26 percent) and even student loans (24 percent).

"As the most debt-ridden generation we have seen, Millennials are more burdened by financial stress than other employees," said Carlos Hernandez, vice president for strategic alliances at Acclaris, a benefits IT firm based in Tampa, Fla. "They report that money concerns affect their performance in the workplace," and the effects of that stress may be why they miss more work than other generations. Consequently, helping to provide a path to financial wellbeing plays a critical role in attracting and retaining Millennial talent.

"It is a myth that younger employees don't care about retirement benefits," said Steven Nyce, director for research and innovation at consultancy Willis Towers Watson, in Arlington, Va. "Millennials are more in touch with the importance of long-term financial stability than other generations based on their recent experience with various financial crises and their parents' financial headaches," he explained. "As many hold student loan debt and fear the end of Social Security, they are acutely aware of the importance of their own financial security."

Adding to their financial concerns, "this generation continues to watch the federal debt ceiling climb without much hope for relief from the Baby Boomers" currently in charge, said Nyce. "The future prosperity of Millennials is at risk, and they know it."

To win the loyalty of Millennials, "Employers should engage them around their unique set of priorities and continue to reach out throughout their tenure when they will be making pivotal financial decisions," said Hernandez.  "That being said, employers need to engage them and reach out in the right way," he added. Social gatherings where invited speakers come to happy hours to talk about financial topics and savings, allowing attendees to network and support one another, raise awareness and engagement.

Technology and Tools

"Millennials spent their formative years in a drastically different way than previous generations, with technology having had a profound impact on how they view the world," said Lear. "From social media to new iPhone versions, they expect quick, if not instant, gratification and can be relatively impatient as a result."

Given that Millennials value technology and privacy, "Offering telemedicine tools, wellness apps and online financial planning are a few of the ways to capitalize on that," said Nyce.

Because of their sense of empowerment and desire to be heard, "it is critical to provide them with tools where they can make choices about their benefits," he noted. Decision-support tools, such as those providing information for making smarter health care choices, "can play an increasing role in engaging and educating Millennial employees," which can be "an opportunity to increase transparency, trust and engagement" among Millennial workers.

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