Plan sponsors will have to beef up their benefits to appeal to a new generation of workers.
In particular, for employers to attract and retain young workers, they must consider workplace benefits holistically, according to a study from MetLife, “The Rise of the Whole Employee: 20 Years of Change in Employer-Employee Dynamics.”
“When it comes to improving job satisfaction, loyalty, and retention, employers need to think of benefits as the foundation of the whole employee experience,” said Todd Katz, executive vice president, Group Benefits at MetLife, in a release. “Benefits are critical, but they don’t exist in a silo. Employers should be offering comprehensive packages that both complement and reinforce the other critical elements of the employee experience. If they don’t, they risk losing this vital sector of the workforce to an employer who will.”
The study found that 27% of “Zillennials” surveyed, or those born between 1993 and 1998, have considered leaving their employer for a more robust benefits package over the past year, compared to 19% of all employees.
Limiting workplace benefits to retirement plans and health insurance likely won’t cut it for Zillennial workers, the MetLife study found. The micro-generation is increasingly interested in student loan debt assistance, with 50% saying the benefit is a “must have,” according to the report. While traditional benefits remain highly important, the study found that since 2017, the appeal of life insurance spiked 23 percentage points and that of hospital indemnity insurance increased 19 percentage points for workers in the age range.
The report also found that Zillennials are the least satisfied at work, with 53% who say having an unfulfilling job is a main source of stress—amid a 20-year low across all generations in worker satisfaction.
“Historical notions of employee well-being were synonymous with health insurance and retirement savings,” the study states. “But that perspective has evolved significantly during the last 20 years. Financial wellness now entails having access to financial planning and emergency savings, in addition to a retirement plan.”
Two years into the COVID-19 pandemic, employers have to grapple with the changed workplace landscape, the study found, as Zillennial workers continue to deal with burnout and social isolation: 53% of the cohort report having sought mental health help in the last year, compared with 31% of all employees. MetLife’s historical data also show that workers’ expectations have been transformed, with younger employees driving the change during the pandemic.
The study found that 41% of Zillennials feel their employer is doing the ‘minimum possible’ to help them adapt to a new working environment, versus 36% of all workers. One result is that Zillennials are more discerning than other generations in assessing their employers, as workers now consider every aspect of their experience beyond traditional benefits.
Zillennials want a work culture that incorporates employees’ social and mental health, the study found. According to the report, their emphasis on recognizing the importance of workers’ lives beyond work and policies that limit working hours increased by 13% and 11%, respectively, over the last two years.
The study found that workers who are satisfied with their flexibility at work are more likely to plan to stay at their organization for 12 months (84%), versus employees who are unsatisfied with employer-provided flexibility (47%).
When workers were asked which benefits would most improve their well-being, Zillennials said that paid and unpaid leave benefits (74%); work-life management programs (67%); mental wellness benefits, including employee assistance programs and reimbursement for therapy sessions (62%); and programs to support their financial needs (55%) were top priorities, the study found.
“It’s clear we’ve reached a critical inflection point in the workplace, and employers across industries should not only be taking note but should also see this as an important opportunity for reflection and growth,” Katz added. “As employees rethink not only how, but also why they work, Zillennials are quickly setting a new standard for evaluating the employee experience. By using this generation’s expectations as a barometer for success, employers can evolve to meet their needs in stride–which is important, particularly as Zillennials gain a stronger foothold in the workforce.”
The MetLife U.S. Employee Benefit Trends Study was conducted in November 2021 and comprises two distinct studies from Rainmakers CSI. The employer survey included 2,737 interviews with benefits decision makers and influencers at companies with at least two employees and the core employee survey consisted of 3,041 interviews with full-time employees, ages 21 and over, at companies with at least two employees.
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