Talking about my generation: Exploring the benefits engagement challenge
For the first time in history, we are seeing up to five different generations in the workplace.
These generations share the same managers, rub shoulders in the same spaces and collaborate on the same projects - but that is where the similarities end. With the age gap between these individuals reaching up to 50 years, we see just how far apart the values, drivers and needs of these different generations can be.
Meanwhile, for the past decade, a “perfect storm” has been raging in the workplace that has brought together a confluence of economic uncertainty, global competition, falling prices, ubiquitous and ever-evolving technology, and shortages in staff and resources.
Throw in the changing “psychological contract” that now exists between different generations and their employers, and it is no surprise that HR professionals are rethinking how they reward their employees, looking beyond the “one size fits all” approach and assessing the effectiveness of traditional flexible benefits.
Barclays commissioned Dr. Paul Redmond, a leading expert on generational theory from the University of Liverpool, to conduct both quantitative and qualitative research to uncover the financial aspirations, concerns and priorities of today’s workforce.
Through the lens of generational science, the report provides human resources (HR) professionals with a new and compelling way of thinking about how to use employee benefits to more effectively engage with the different generations.
Why should HR professionals read the full report?
A toolkit for HR professionals
Understanding the generational differences is a key business imperative, particularly when devising and implementing organisational engagement strategies. In a post recession workplace, where employee loyalty is undergoing a fundamental shift, what do employers need to do to ensure that they are meeting the needs of all their employees, at every stage of their lives?
Workplace generations need and expect tailored benefits packages. Based on generational profiles, the full report provides broad suggestions on the products and methods of communication for each generation that can help you begin your journey toward greater employee engagement.
The research explores these five questions:
- Does the current employee benefits structure suit the needs of the vast majority of the workforce?
- How do these needs contrast and compare between the three key generational groups?
- Is the language and media used to explain employee benefits appropriate for the growing Generation Y workforce? In what ways could it be better fit for purpose?
- Will the current employee benefits structure be obsolete in five years as the generations in the workplace shift?
- Building benefits packages for the multigenerational workforce — what’s the cost of getting it wrong?
What does the report tell us?
The report highlights that current benefits packages are too inflexible for today’s employees
- Six-out-of-ten employees claim that a comprehensive benefits package is a key factor when looking for a new job.
- However, 85% felt that their current employee benefits packages failed to provide the support and flexibility required to meet present and future financial needs — a major finding suggesting that across the UK a serious discrepancy exists between the needs of employees and the benefits packages provided.
- Despite recognising the value of work-based financial guidance, over 90% of employees from all generations had no access to any form of work-based financial guidance.
How do these needs contrast and compare between the three key generational groups?
Distinct generational characteristics have been found to exist within the workforce, which are especially apparent when looking at employee benefits packages:
- Baby Boomers (those born between 1945 and1960) were the least demanding generation in terms of their employee benefits, with 71% valuing their company pension scheme, 48% valuing health care and 57% valuing opportunities for career development. Existing benefits packages were found to benefit this generation (after all, they designed them).
- Generation X (1961-1980) wants work-life balance, and while 71% value their company pension scheme, 69% value flexible working hours. Paying off the mortgage and spending more time with the family are major concerns for 41% of Generation X respondents, as is saving for retirement (30%).
- Generation Y (1981-1995) is focused on securing opportunities for career advancement and taking on more responsibility, with 64% citing ongoing career and personal development as most important to them.
Nearly two thirds (65%) seek financial education and guidance, particularly because Generation Y faces significant financial barriers, as 29% currently prioritise getting on the housing ladder and 30% paying off debts.
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Is the language and media used to explain employee benefits appropriate for the growing Generation Y workforce? In what ways could it be better fit for purpose?
- E-mail (45%) and staff intranet (41%) are still the most popular ways for companies to communicate their benefits to employees, compared to seminars (20%) and one-on-one meetings (13%).
- The result: confusion. One in five Generation Y respondents said that in the past year they have been confused about what employee benefits they have or are currently entitled to.
- More than 50% of employees now use the Internet when sourcing financial information. However, counter to claims about the rise of the “digital native” generations, our report’s focus groups discovered widespread support for face-to-face interventions and personal engagement particularly amongst Generation Y.
- Although auto-enrolment is likely to increase participation of Generation Y employees in company pension schemes, this report suggests that unless supplemented by more generationally-tailored benefits, auto-enrolment, as a form of engagement, is likely to have limited impact on recruitment or retention.
Will the current employee benefits structure be obsolete in five years as the generations in the workplace shift?
- Thinking about future employee benefits needs, each generation faces its own unique obstacles and challenges. While dissatisfied with existing benefits packages, few employees were able to see beyond their current benefits offerings.
- Although the majority (80%) of employees across all generations expect their employer to provide a comprehensive benefits package, we found that relatively few employees have a clear sense of the type of benefits package that would best suit their future needs.
Helping staff visualise their future selves - particularly in terms of the financial challenges they are likely to face in the future - can be a highly effective way of overcoming this obstacle.
Building benefits packages for the multigenerational workforce — what’s the cost of getting it wrong?
- 12% of Generation Y respondents are so dissatisfied with their current benefits package that they have considered moving to a different organisation. This indicates the emergence of a new Generation Y “psychological contract” impacting how future generations engage with their employers: The role of the employer will shift from being a benefits “provider” to a benefits “enabler.”
- However, the reward for offering the right benefits packages to the right generational groups can be significant. Research shows that employees who are satisfied with their benefits packages are also more likely to be loyal to their employers and engaged with their organisations.2
- If tailored to the specific aspirations, priorities and objectives of each generation, benefits packages can be highly effective in enhancing employers’ engagement strategies.
Organisations with high levels of engagement have 40% lower employee turnover rates than companies with low levels of engagement. In addition, Total Shareholder Return (TSR) at these organisations has been calculated as being 42% higher than their competitors. Employees with the highest levels of engagement perform 20% above average, while being 87% less likely to leave their organisation.3
Whilst every effort has been taken to verify the accuracy of this information, neither Dr. Paul Redmond, YouGov nor Barclays can accept any responsibility or liability for reliance by any person on this report or any of the information, opinions or conclusions set out in the report. This document is intended solely for informational purposes, and is not intended to be a solicitation or offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or to provide any investment advice or service.