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Different Employee Ages, Different Benefit Needs. What's an Employer to Do?

You already know the workforce is more age-diverse than ever. And it’s no surprise that generations working in every industry have different preferences about their benefits.

What’s less clear is how Generation Z will affect employee benefits as this age group enters the workforce. No matter how you look at it, employers will need more flexible benefits packages to keep everyone happy.

Looking at a Long Haul

This chart projects how age demographics may shift within the workforce through 2029. While there are a few shifts in the number of workers from each age group, the real takeaway is that a range of generations will continue to make up the workforce. Offering benefits that don’t address the differing needs of different age groups isn’t a sound benefits strategy now — and it won’t be in the future.


Numeric Change in the Civilian Labor Force by Age Group, Projected 2019-2029

Age GroupNumeric Change,
Level, 2019Level, Projected 2029
16- to 24-year-olds-1,619,00021,091,00019,472,000
25- to 34-year-olds-346,00037,191,00036,845,000
35- to 44-year-olds4,463,00034,057,00038,520,000
45- to 54-year-olds475,00032,931,00033,406,000
55- to 64-year-olds-816,00027,603,00026,787,000
65- to 74-year-olds3,996,0008,700,00012,696,000
75-year-olds and older1,841,0001,964,0003,805,000

Note: The civilian labor force excludes active duty members of the U.S. Armed Forces and people who are confined to, or living in, institutions or facilities such as jails, detention centers and skilled nursing homes.

Source: U.S. Bureau of Labor Statistics, Employment Projections program.

Understanding Drivers and Preferences

Offering a benefits package that employees across generations perceive as fitting their needs means understanding each group’s different motivations and priorities.

One study reports that six out of 10 employees say a complete benefits package is crucial when they assess a job offer. At the same time, 85% believe their benefits package doesn’t provide the support and flexibility they require to meet their current and future financial needs.1

What do all these folks want? Research from the Purdue Global University reveals basic differences in what drives each age cohort:

  • Company loyalty and duty motivate Baby Boomers.
  • Work-life balance and personal/professional interests matter to Generation X.
  • Responsibility, manager quality and unique work experiences drive Millennials.
  • Personalization, individuality and creativity inspire Generation Z.

A Closer Look at Each Generation

Baby Boomers are getting ready for retirement and their post-work health care needs. The Society for Human Resource Management says these benefits are most in line with the needs of this age group:1

  • Retirement planning or investment advice offered online, in a group setting or as one-to-one support
  • Long term care insurance for themselves or family members
  • Lifetime income solutions such as in-plan annuities and help for retirees to buy an out-of-plan annuity with in-plan assets
  • Low-cost, quality health care, paid sick days, 401(k) matching contributions and a dental plan

Generation X is feeling the impact of family responsibilities and financial stress. SHRM reports that Gen-Xers support an average of 2.2 children who are roughly 13 years old. Many will keep supporting these dependents until they reach age 26. Gen-X employees also insure their spouses at a rate of 48%, which is higher than their younger co-workers.

People in this age group are more likely than younger employees to have chronic health problems like high blood pressure, diabetes and musculoskeletal disorders. Stress often makes these conditions worse.2

Generation X tends to prefer:1,2

  • Supplemental insurance, like critical illness, hospital indemnity and accident that may help cover costs linked to hospital stays or serious illnesses for employees or their family members
  • Low-cost, quality health care, bonuses, work from home days, paid sick days and flexible schedules
  • Full-service employee assistance programs
  • Wellness programs

Millennials have less interest in — and know less about — their workplace benefits than their older colleagues. These gaps in interest and knowledge may be making it harder for companies to retain younger workers.

The oldest Millennials started their careers during the post 9/11 recession, trying to find work during a job recovery. Millennials were hit again by the Great Recession in 2008 and most recently, a pandemic-driven recession. Their parents and the government paid for fewer of their college costs, so they also face high student debt loads.3

Millennials are looking for:1,2

  • Low-cost, quality health care
  • Paid sick days
  • Work from home days
  • Flexible schedules

Generation Z is a financially cautious group. For most, the Great Recession was a defining moment in their childhood. They saw adults in their lives lose their jobs.

Gen Zs are hard-working and individualistic, thriving most working on their own rather than in groups. At the same time, they want their employer to meet all their work-related needs — including behavioral health support. This age group prioritizes personal and career development. Finally, they’re digital natives who expect online access to medical advice and prescriptions.4

Generation Z is interested in:4

  • Telemedicine programs or virtual mental health counseling via a mobile phone
  • Financial counseling sessions, loan payment aid or tuition reimbursement
  • Comprehensive health insurance
  • Vision, dental, maternity and wellbeing benefits
  • Training and development programs
  • Employee assistance programs

One Key to the Multigenerational Puzzle: Voluntary Benefits

How can you help clients devise a successful benefits strategy for all these age groups? They should focus on flexibility, so employees have some opportunity to personalize their benefits.

A great start is the option to buy Voluntary coverage. These flexible options have grown in popularity over the past decade.

Employees’ top three choices have been critical illness, accident and hospital indemnity plans. Demand for accidental death and dismemberment, short term disability and term life insurance has also increased steadily.5

Of course, there are differences in which Voluntary plans each generation wants. Dental appeals to Millennials who value it for themselves and their children. Baby Boomers are interested in long term disability plans.

A complete package that provides flexibility across generations will include all these Voluntary offerings. And don’t forget about what employees value most in these products: portability, flexibility and coverage for spouses and dependents.5

Don’t Forget About Research

Employers will also need to do their research. The first step is finding out what’s in a competitor’s benefits package. This will set a benchmark to help your clients confirm they’re offering equal or better benefits than their competition.

Employee surveys are a useful research tool to reveal what employees value in a benefits package. A survey may show they want less expensive benefits than your clients expect. While some insurance comes with a higher price tag, other options might not cost as much. Remote work, flexible schedules and volunteer time are all less pricey ways to attract younger workers.6

Provide Ongoing Benefits Education

A sound benefits strategy requires an educational component, especially when it comes to Voluntary insurance. Workers need regular communication to understand why Voluntary benefits matter and which ones are right for them.5

Encourage your clients to provide year-round support for financial literacy that goes beyond annual enrollment materials.5 A good way to boost awareness is to offer online, mobile, easy 24/7 access to benefit information with a tool like Navigator Mobile.

Keep Employment Laws in Mind

Personalizing benefits is a smart strategy. But make sure your clients do it in a way that doesn’t violate the law. Understanding Equal Employment Opportunity Commission rules and guidelines is critical.

It’s fine for employers to provide different benefits to different workers, but not in a way that’s biased against factors like age, gender or race. Many companies offer tiered benefits packages linked to employee grade levels. These packages offer a variation in benefits and still operate within the law. Your clients should also have their attorney review any changes they make to their benefits policies to be certain they’re in line with EEOC regulations.6

Make Partnership a Priority

Pick the right partner carrier. We saved this one for last, but it may be the most important factor in creating a benefits package that works for more than one age group.

Solid financials and a high A.M. Best rating are important. You’ll also want to look for proven benefits experience and a strong service model. The right carrier can make a real difference in working with you on a strategic approach. That’s the best way to deliver a strategy that works for your clients now and can adapt for the future.

Bringing It All Together

What does it take to craft a successful multigenerational benefits strategy? Understanding each age group, a flexible approach, research, education, understanding employment law and a good partner.

Starting with the last one may be the easiest, most effective way to bring it all together.

Interested in learning about our approach to Voluntary benefits? Check out how we do Voluntary.


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