This article is the fourth of a six-part series on employee engagement and retention, which we refer to as “stickiness.” Younger generations make up an increasingly large share of the modern workforce, and companies must respond in order to acquire and retain top talent. This article will look at one of the most critical factors for any job seeker—compensation and benefits.
As employers fight to attract and retain talent in the modern workplace, they must continually evaluate the expectations and desires of high-potential prospects, particularly those of millennials and generation Z (gen Z). Gen Z is projected to compose 20% of the workforce by 2020, so understanding the benefits that drive their career choices is indispensable for attracting tomorrow’s talent.
Today, the desires of millennial and gen Z are shifting when it comes to employee benefits. Employee benefits traditionally have been defined as non-salary compensation packages, including components such as a 401k, health insurance, and more. However, millennial and gen Z expectations are causing a broader definition of employee benefits to emerge, reflecting their unique values and desires.
Contrary to popular belief, this new perspective on employee benefits is not limited to pingpong tables, healthy snacks, and free lunches. Millennials came of age during the 2008 recession, and gen Z has seen the limited wage growth faced by their older peers. While flashy perks may grab a recruit’s attention, millennials and gen Z are looking for job perks and benefits that enable their financial security and professional growth.
The following four principles reveal the benefits that will compel these workers to stay with an employer for the long haul.
1. Provide Competitive Baseline Pay
“Cool” perks are not sufficient incentives for employees to stay at a company. In a recent Jobvite survey, 61% of employees said the desire for higher pay was the most influential reason in deciding to leave their current job. In fact, gen Z is the most monetarily driven generation, with 70% citing pay as their top work motivator (compared to 60.3% of other generations). For employers to remain competitive they must make sure their compensation structure meets the appetite of ambitious young employees.
2. Train and Educate For Long-Term Success
When approaching training and development, companies should adopt the mindset of a university. Universities understand that quality of instruction, reputation, and post-grad performance are keys to establishing their reputation (although a good football team and warm weather don’t hurt either). The same goes for companies. If they focus on educating and training their employees, then employees who leave will likely serve as company “alumni” and brand ambassadors who promote their former employer to future recruits.
Gen Z, the future “students,” have proven to be enthusiastic learners. They have grown accustomed to having a proliferation of information at their fingertips. They are also natural problem solvers who are used to figuring things out for themselves through online guides and tutorials, such as YouTube channels. This new approach to learning combined with the need to add skills and credentials to thrive in a competitive environment means they will expect employers to provide them with similar types of development opportunities and training collateral.
3. Foster Trust Through Increased Flexibility
Digital connection is second nature to millennials and gen Z, with many being online constantly. This continuous remote connection via online tools creates a sense in younger generations that they can work from anywhere and be successful. Location does not dictate the level of connection or involvement they feel toward an organization. The rise in social media, software as a service applications, and remote conferencing toolshas created an environment where millennials and gen Z feel they are a part of something even if they are thousands of miles away.
Understandably, millennials are prioritizing the flexibility to work where they want and when they want. Deloitte’s study on millennials found that 75% of millennials would like to start working from home, work more frequently from home, or work partially from a location where they feel most productive. The same goes for gen Z. As an innovative and entrepreneurial generation, they crave flexibility and thrive when they are given autonomy. Ultimately, the provision of work flexibility not only allows for increased autonomy, but also boosts workplace morale through conveying a message of trust in a company’s employees.
4. Care for Their Health & Wellbeing
Employees’ desire for health care plans that include greater employer contributions is not unique or novel. However, the value placed on health care benefits by younger generations is surprising. The combination of rising health care costs and the practical mindsets of gen Z have resulted in a strong emphasis on health benefits when evaluating employers. According to Monster’s Multi-Generational Survey, strong health insurance coverage is listed as gen Z’s top “must have” when looking for their first job, with 70% rating it as their top priority.
Create the Benefits Package Your Employees Really Want
Remember these four benefit principles the next time your company is considering installing a new pingpong table. When evaluating which employee benefits will make the greatest impact, consider the following questions:
What benefits do our employees value?
Are new or improved benefits worth their cost to implement and maintain?
What are some non-cash-based benefits that would increase company stickiness?
What operational or strategic barriers exist to trying creative solutions?
Despite their relative youth and various generational stereotypes, millennials and gen Z carefully consider the value of their salaries, benefits, and perks when making career choices. These generations will make up 66% of the workforce by the year 2020, so focusing on the benefits they value will be critical to employee retention and growth.
Interested in learning more about how to implement impactful workplace benefits? Curious how Credera strives to provide valuable perks to employees? Reach out to us here to find out more! Or find the rest of the series here:
Part 1: Introduction and Trends
Part 2: People and Culture
Part 3: Vision and Mission
Part 5: Purpose
Part 6: Professional Development