Over the past several years, the workplace has included more generations than ever before, evolving from what was typically a two-generation workforce to having five different generations contributing their skills and abilities. Organizations with employees from multiple generations are faced with a variety of operational challenges related to managing the employee experience for a diverse workforce. The ways in which they attract and retain employees, as well as manage the employee experience must all address an expanse of generational needs.
A mere six percent of respondents in a Deloitte Survey report that they feel their leaders are “equipped to lead a multigenerational workforce effectively.” Yet, 70 percent of organizations said leading multigenerational workforces is important or very important for their success over the next 12–18 months, yet only 10 percent say they are very ready to address this trend.
Referred to as the “Readiness Gap,” this disparity highlights the need for companies to prioritize understanding the complexity managing a multigenerational workforce brings.
This gap also signals that the traditional approach of simply relying on workers’ ages and generational data to inform talent management and benefits strategies may be insufficient. With a multigenerational workforce, it is important to first understand the compensation and benefit preferences of each generation, and to structure a compensation package that addresses these preferences.
According to Kimberly Abel-Lanier, author of 8 Ways to Motivate the Five-Generation Workforce, “the multigenerational workforce requires flexible leadership, policies and programs.” “Today’s leaders must familiarize themselves with the perspectives, needs and influences of each generation.”
While there are differences in what each generation tends to prioritize, they also share common concerns. The distinction is the needs behind those concerns. As a leading generational expert states, “The longer I study generations in the workplace, the more similarities I find in what people want out of work. Those fundamentals—meaning, purpose, good leaders, professional growth—don’t change. What changes is how each generation expresses these needs and what expectations we have about our employers’ fulfillment of them.”
What are the Top Benefits for Each Generation?
After studying the characteristics of the five working generations, Larry and Meagan Johnson, workplace training experts and authors of Generations, Inc.: From Boomers to Linksters--Managing the Friction Between Generations at Work, identified the societal influences that impacted each generation, the distinct traits that each generation possesses. These factors also impact each generation's work style, motivators and what they consider to be the benefits that are most important to them.
Traditionalists—born before 1946
Influenced by the Great Depression, Traditionalists are motivated by money but also want to be respected. This group typically prefers milestone recognitions, values flexible schedules, promotions and considers long-term care insurance, catch-up retirement funding as important benefits.
Baby Boomers—born between 1946 and 1964
Also referred to as the “Woodstock Generation” and influenced by the Vietnam War, Boomers tend to question authority, be well-educated, possess excellent teamwork skills, and thrive on adrenaline-charged assignments. Perks like prestigious job titles, and recognition such as the size of one’s office sze and parking spaces are also important to Boomers. Around 10,000 Boomers turn 65 years old each day, making benefits such as 401(k) matching funds, sabbaticals, and catch-up retirement funding of significant importance to this group.
Generation X—born between 1965 and 1976
Dubbed the “Me Generation” or “The Latchkey Generation” as a result of being products of divorced parents, Gen Xers are independent, family-focused, hardworking, and socially responsible. They value benefits such as flexible schedules, telecommuting, and believe promotions should be based on competence and not by rank, age, or seniority.
Generation Y—born between 1977 and 1997
Generation Y, commonly referred to as Millennials, are heavily influenced by technology and therefore are a tech savvy group that prefers utilizing digital devices, internet and social media for communication. This group prefers flexible workplaces, time off, and continuous learning opportunities. Culture is very important to them, as is working with organizations that align with their personal values and beliefs.
Generation Z—born after 1997
The Facebook generation, or “Linksters” as coined by the Johnsons, is influenced by a media-saturated world. Linksters tend to be motivated by meaningful work. According to Abel-Lanier, “They want exciting projects they can be passionate about.” This group is more motivated by social rewards, mentorship, and constant feedback than money. Members of this generation also expect workplace flexibility and diversity.
How to Manage Multigenerational Needs?
With an understanding of the different generations and their varying preferences for compensation and benefits, how does an organization approach developing a program that addresses these differences yet is suitable for the entire workforce? Taking the following steps when planning and administering benefits packages can help ensure that the needs of a multigenerational workforce are considered.
Step 1 - Gather information. When beginning the planning process, start by seeking input from employees about the type of benefits they want, where they see room for improvement in the current options, and if there is any confusion or issues with accessing benefits. Receiving feedback can take the form of conducting a workforce survey or focus groups. An integrated HCM system can also facilitate the feedback process with online questionnaires. Be sure to include open-ended questions to give employees the opportunity to expand on their ideas and shape the strategy for future benefits offerings.
Step 2 – Get creative. Based on input from employees, don’t be afraid to think outside the box and consider benefits beyond core offerings of health care and retirement. Offering a variety of voluntary benefits, ranging from child care, caregiver leave, to student debt assistance, legal insurance, tuition reimbursement, ID theft prevention, and even pet insurance, will demonstrate an awareness of the different priorities and give employees the ability to choose benefits that address their individual needs.
For example, at LinkedIn, the Perk Up! Program acknowledges that employees know what they need more than the company does, so it provides them a predetermined quarterly budget to use on a selection of benefits.
Step 3 - Prepare to adapt. A good compensation and benefits program should be flexible and adaptable to unforeseen events. As the global pandemic illustrates, a sudden change may occur that significantly impacts what employees need from their benefits program. As a result of Covid-19, many organizations are in the process evaluating and adapting their existing packages accordingly.
In a survey conducted by Mercer, there were several benefit plan changes identified as the most common as a result of Covid-19. Some of these include expanding virtual or telehealth programs, enhancing mental health support, and increasing cost-sharing for plan expenses such as deductibles, premiums or co-payments.
Step 4 - Communicate and evaluate. Ensuring that all employees are provided information pertaining to their compensation and benefits program, and enabling them to easily enroll is crucial for success. An HCM can help streamline enrollment and evaluate what is working and what’s not, based on the coverage elections employees choose. Providing an online open enrollment and benefits administration platform gives your workforce access to the specific benefits information they need exactly when they need it. A recent survey showed the number one request from all employees was more technology.
Understanding the diverse traits of a multigenerational workforce is an important component to sustainable talent management. Following the steps for implementing a compensation and benefits program that addresses these needs can lead to success in recruiting, retention and engagement among all generations.
Contact a SyncHR solutions expert to learn more about how an HCM can help your HR team and the larger organization adapt to and administer the benefits plans your multigenerational workforce wants.