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Employee Benefit Packages Mature for Younger Generations

Millennials surpass baby boomers as the US workforce’s largest generation, and surprising new benefits draw them in.

Millennials are now the largest working generation, with 35 percent of this group active in the US labor force, according to the Pew Research Center. As these workers, today aged 22 to 37, evaluate current and future employers, the benefits their moms and dads once treasured are eclipsed by new desires, such as student loan and childcare assistance, flexible schedules, open work spaces, wellness and other benefits options, financial guidance, atypical medical delivery methods, pet insurance and more.

As of 2017 – the most recent year for which generational work data is available – 56 million millennials (those born 1981 to 1996) were working or looking for work, compared to 41 million baby boomers (1946 to 1964), who represented just 25 percent of the total and continue to retire.

Around the corner is Generation Z (1997 to 2015), to reach 2.52 billion worldwide and by 2025 is slated to become the largest workforce ever.

“To attract and retain the best and brightest, companies must have a strategic benefit offering for all generations, but especially today’s millennials, who now represent the largest percentage of US employees,” Devin Blazier, senior vice president of Alliant Insurance Services, based in Morristown, tells New Jersey Business. “Known to be multi-tasking and ambitious, millennials value multi-platform benefits that offer many options. They value wellness programs, flexible and autonomous work schedules, the option to work remotely, paid time off, professional development and student loan financing. While competitive salaries and bonus potential are common desires across all generations, offerings that target millennials make a big difference as they compare pay, benefits and perks.”

Growing Popularity of the HSA

The younger generation has opened its eyes to the Health Savings Account (HSA), which – when part of a benefits package – makes employee contributions easier, and may be sweetened by corporate matching (which employers can deduct as a business expense). Like an IRA, employee contributions to the HSA are 100 percent deductible (up to the legal limit). Withdrawals to pay qualified medical expenses, including dental and vision, are never taxed, and interest earnings accumulate tax-deferred.

“We see many millennials starting their HSA contributions early in their careers; they will have thousands of dollars in their accounts by the time they’re middle-aged and start needing more medical services,” Steve Rosenthal, CEO and president of Triton Benefits and HR Solutions of Woodbridge, declares.

Mobile Healthcare

Telemedicine, a new offering from Triton, is a mobile healthcare app “that millennials love,” Rosenthal reports.

Telemedicine is a national network of US board-certified physicians and pediatricians offering on-demand, 24/7 remote medical care for routine medical issues via video consultations provided over mobile devices from wherever patients happen to be.

“Millennials expect the convenience that comes with a mobile app,” Rosenthal explains, “such as a new one we offer that allows them to self-diagnose the flu, for example. Then, instead of getting out of bed, they can search for a pharmacy that delivers what they need. From an employer perspective, this service also reduces claims costs and helps mitigate rate increases.”

Millennials Love Options

Millennials love options, Rosenthal says. “It’s no longer enough for companies to provide a single plan in which eligible employees must enroll. Millennials want to pick and choose the items included in their benefits programs – and it’s up to employers to design packages that provide these multiple choices.”

The need for options is one reason why younger workers are expanding their use of online support tools such as Healthcare Bluebook, which enables users to understand how much they should be paying for healthcare services before choosing a provider. “It’s like TripAdvisor for healthcare,” Rosenthal asserts.

Student Loans Reach Crisis Level

Competitive pay and the option for raises and bonuses are crucial to millennials, in particular as they address their hefty student loans, which have reached a crisis level of more than $1.5 trillion across the nation, according to a June 2018 article in The Asbury Park Press.

New Jersey’s student loan borrowers, on average, have more debt than their counterparts across the country: They owe a median $18,633 versus the national median student loan debt of $16,995.

Gen Z to Become Largest Workforce Ever

As mentioned previously, Generation Z, whose eldest members are about 21 to 22 years old today, is set to become the largest generation ever – reaching 2.52 billion worldwide – and by 2025 will account for 30 percent of the workforce, Rosenthal notes.

He asserts that Gen Z workers “want work that compels them to be creative and collaborative … they don’t like being put inside of a box, metaphorically and literally. Workspaces will need to be multifunctional to meet the variety of this group’s needs.

“Generation Z also wants its employers to take stances and show support on key social, political and environmental issues,” Rosenthal claims. “Through meaningful and authentic corporate action, companies can earn the loyalty of this group.”

New Benefits on the Negotiation Table

As tuition costs rise exponentially over the years, tuition assistance is being expected by Gen Z, and is being brought up in the interview process.

So is the corporate laptop. “Gen Z was raised with a cell phone in one hand and a laptop in the other and seeks these mobile business tools when considering an employer. For example, they expect to work on a laptop that’s connected to the company server and are asking about it in the interview process,” according to Jim Bell, founder and CEO of Abel HR Services of Cranbury.

Commuting costs also are on the negotiation table, “which is a new conversation for employers since baby boomers rarely asked for such a benefit,” Bell reports. Additionally, future help with childcare costs, which often equals one salary, is something Gen Z is beginning to request. “Gen Z, as well as younger millennials, looks for onsite or subsidized daycare as a valuable part of the benefits package. In addition, baby-centered benefits, such as generous baby bonding time and health plans that cover entire families, also are being requested.”

Gen Z employees – who value their pets more than other generations, as “family members” – are making pet insurance another talking point, Bell notes. “As much as 25 percent of Gen Z workers already have taken a sick day to care for a pet and/or visit a veterinarian.”

In-office digital communication tools and social media platforms also are important to Gen Z in fostering collaboration and camaraderie.

And, because the Gen Z group was given things more easily, they look at a job as disposable and will move on quickly if they are not happy, Bell claims.

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