Building effective engagement and benefits strategies for Millennials (Gen Y).
This is the third part of our series on effective benefits strategies for a multi-generational workplace. There are four distinct generations in the U.S. labor force, from Baby Boomers to Gen Z. This blog focuses on benefits strategies for Millennials, including benefits preferences and engagement methods.
Generation Y, more commonly referred to as Millennials, are a unique group of individuals. Born in the early 80s through the mid-90s, Millennials experienced rapid technological changes and grew up in an era of Microsoft and Apple, the 24-hour news cycle, and the rise of social media. They were also in their formative years during tragic cultural events like Columbine and September 11. They and/or their parents may have experienced economic uncertainty with the Great Recession. They are a group unlike any other before them – particularly the Baby Boomers and Generation X.
Learn more about the Millennial generation below.
The Millennial Generation: A Profile
Born between 1981 and 1996, they are the largest demographic in the workplace, just ahead of Generation X. They have also became the largest age group in the U.S., bypassing the Boomers (72.1 million vs. 71.6 million). Ranging in age from their early 20s into their late 30s, Millennials are makin an indelible mark on the job landscape.
Millennials in the workplace are much more career mobile than their predecessors. Gallup has studied this demographic and has found that Millennials move from company to company for a potential variety of reasons, most notably lower engagement. This generation seeks lifetime employability rather than lifetime employment. This generation seeks lifetime employability rather than lifetime employment.
Growing up during the tech boom, the Millennial generation is the first to feel at home on the internet. The oldest of this generation first experienced the internet during their pre-teen years, and many had access to computers as early as elementary school. You could call them “technology natives.”
Gen Y is also a group that values continuous learning, though the way they consume information is much different from those before them. Millennials dislike “too many details.” Raised during the internet age, they had access to vast amounts of information, but it was often disorganized and overwhelming. Over the past two decades, communication strategies have changed, thanks to the efforts of Gen X and the older Millennials. From blogs to books to news articles, in print and on the web, writing styles now feature smaller, more digestible bites with less “fluff.”
These factors play a role in how employers and benefits administrators can design effective benefits strategies for Millennials.
Benefits Strategies for Millennials
What benefits do Millennials want?
Though decidedly different than Boomers and Gen X, Millennials also place access to health insurance as their top employee benefit. However, Gen Y wants more than just insurance. Retirement and financial benefits are key. They also prioritize workplace flexibility (also known as work-life balance) more than other generations.
Regarding health insurance, considering their age, relative good health, and desire for healthcare benefits, a High Deductible Health Plan (HDHP), coupled with a Health Savings Account (HSA) should be considered. Lower insurance premiums and the ability to put aside money tax-free to cover out-of-pocket healthcare costs can be enticing for this group. Plus, an HSA is a valuable retirement tool since after age 65, account owners can use them like a 401(k).
Flexible Spending Accounts (FSAs) and Health Reimbursement Arrangements (HRAs), which have similar tax benefits and eligible healthcare expenses as an HSA, are also worth considering.
Though they have decades before they can retire, Millennials are concerned with their financial security once they leave the workforce. Therefore, a 401(k) with employer match is another key benefit for many.
Something else that is top of mind is that many in this group have already started families or will soon. Given their family needs, a highly popular financial perk is a Dependent Care Assistance Plan (DCAP). With young children in daycare, preschool or before-and-after school care, many could use this tax-advantaged account to cover the costs of childcare and save money.
Finally, while most are out of college now, continuing education and tuition assistance programs are important. The average Millennial student loan balance is $34,504. Continuing education courses, which give them the opportunity for career growth, could be attractive as well.
Engaging Millennials with their benefits
The most effective strategy for reaching this group is through digital communications. Gen Y often avoids in-person communications such as phone calls and face-to-face meetings, so benefits fairs or meetings are not appealing to them.
With an emphasis on less fluff, short, to-the-point communication pieces with interesting visuals are key. Delivering benefits information by email, social media, websites, and text message should be part of the core strategy for this group.
Millennials represent a key demographic in the workplace. Though they desire many of the same benefits as their older coworkers, they are drastically different in communications styles. More mobile and tech driven, this group is the hard-dividing line between the traditional print and face-to-face engagement (which is preferred by Boomers and accepted by Gen X) and a modern, tech-focused delivery.
For more information on benefits and engagement, download DataPath’s free whitepaper “Effective Benefits Strategies for a Multi-generational Workforce.”
DataPath, Inc. creates administrative solutions for Flexible Spending Accounts, Health Savings Accounts, and other tax-advantaged healthcare benefit accounts.