The labor market has undergone a significant shift in the past few decades. In the midst of a turbulent market, low unemployment, and the remaining tailwinds of the Great Resignation, more employers are asking themselves what they can do to support their employees.
For Generation Z, the youngest generation just entering the workforce, those needs include benefits – not just having them, but having customized options and understanding how to maximize their benefits.
This generation, which was born 1995 or later, is just finishing education and entering the workforce for the first time. They experienced radically different circumstances than the previous generations – especially with the COVID-19 pandemic and the subsequent shift in the labor market – and they have different needs and criteria for job searches.
They’re competitive, in demand, and discerning. To attract top talent in this budding workforce, employers need to provide attractive benefits and educate employees on why they’re better than competitors.
Health insurance is a given, but Gen Z is also looking for other benefits that will enhance their lives, such as tuition reimbursement, income protection, flexible schedules, and other benefits. They understand what’s out there, but that doesn’t mean they understand their options, how benefits work, and how the decisions they make now affect their current situation and their future.
Employers can be a crucial step in bridging that gap. You can help your employees understand why your benefits are competitive and show them how to make the most of what’s available. In return, you’ll have employees that are maximizing your investment into their benefits, satisfied with their jobs, and loyal to your employer brand.
What Makes Gen Z Different?
Gen Z includes members that were born between 1995 and 2012. The eldest among them are just a few years into their careers, while the youngest are just now entering the workforce. They are the most ethnically and racially diverse generation in the US to this point and digital natives.
Millennials and Gen Z have a lot in common, but their experiences in the workforce are quite different. The former were entering the workforce before or during the Great Recession, experiencing job instability and a setback on their career paths.
Gen Z, on the other hand, had a more promising career start amid a booming economy – until the COVID-19 pandemic hit. One advantage they have, however, is that they are familiar with the gig economy and different online opportunities, so they’re not afraid to rely on multiple income sources to make ends meet.
So, what does Gen Z expect from a workplace?
It’s impossible to generalize or summarize an entire generation with sweeping statements, especially when there’s a big gap between the oldest and youngest and a few major events in between, but there are some consistencies across these individuals:
They appreciate a company’s true mission and transparency, rather than platitude or performative expressions.
- They want to know that the work they do matters.
- They want learning and growth opportunities that will help their careers.
- They want to be part of a company with a strong, positive culture.
When it comes to benefits, things get more complex. Gen Z automatically expects health and retirement benefits, which most companies offer. They also want flexibility and options that will help them move forward in life, such as financial education, wealth and income protection, and tuition reimbursement.
Here are some ways that you, as an employer, can help Gen Z employees make the most of their benefits.
Help Them Navigate the Complexities of Health Insurance
Health insurance is the most important of employee benefits, but it’s pretty new to most Gen Z employees. Before they enter the workforce, these candidates have been relying on their parents’ health plans and may not be aware of all the different options they have for health insurance – nor how those choices impact their financial situation.
High school and college don’t prepare young adults for choosing benefits or making decisions based on major life changes, such as getting married or having kids. With health insurance, what works for a single person is drastically different from the needs of a family with young children.
In addition, health insurance plans use a lot of complex jargon and carry fine print that employees need to pay attention to when making the right decision for their individual needs.
As an employer, you can demystify health insurance by educating employees on the key aspects of healthcare plans:
Monthly Premiums
Gen Z employees should be educated on the share of health insurance premiums and how that premium is split between them and the employer. They also need to understand how choosing the deductible and coinsurance affect their monthly premium. It may be tempting for them to choose the lowest monthly premium, not realizing that they have an exorbitant deductible or a high coinsurance percentage to pay.
Deductibles
Deductibles are a big consideration with a healthcare plan. Employees have to understand how deductibles work and how choosing their deductible amount can affect the monthly premium and their out-of-pocket expenses when they need medical care. This is especially important for employees who are insuring an entire family.
Copays
Copays are part of virtually every insurance plan. Generally, the higher the upfront premium, the lower the copay. Some copays only go into effect after the deductible is met, while others are required for specific services before the deductible comes into play. These are important distinctions that employees need to fully understand to make an informed decision.
In-Network vs. Out-of-Network
Most health insurance plans have a network with insurer contracts that are negotiated for better rates with different healthcare providers. Any enrollees who seek healthcare services outside of their network may have much higher costs for their care. With some plans, an out-of-network provider may mean insurance won’t pay anything, which could become an issue with specialists, different locations, or other circumstances.
Show the Value of Tax-Advantaged Accounts
If you have health savings accounts (HSAs) or flexible spending accounts (FSAs) for your employees, educate them on the value they offer. Otherwise, your employees may not understand why these accounts are so helpful or the advantages, such as taking a health savings account with them if they take a different job.
Essential Services
The Affordable Care Act (ACA) requires health insurance plans cover 10 essential services:
- Ambulatory patient services
- Emergency services
- Hospitalization
- Pregnancy, maternity, and newborn care
- Mental health and substance use disorder treatments
- Rehabilitative and habilitative services and devices
- Prescription drugs
- Preventive and wellness services
- Pediatric services
- Laboratory services
Plans must also offer birth control coverage and breastfeeding coverage.
Employees need to understand what these services are and how they affect their healthcare plan to make an informed decision.
Show the Value of Wealth and Income-Protection Benefits
Like benefits, the American education system doesn’t include a lot of practical financial education for general studies. Unless a student takes courses in accounting or finance, they’re missing out on vital life skills to make sound financial decisions as they enter the workforce.
Benefits education programs can help employees understand the wealth and income-protection benefits that are available to them and how they can take steps now to secure their financial future.
Cover the Guidelines Tuition Reimbursement or Continuing Education
Tuition reimbursement or other education benefits are appealing to job candidates. If you offer benefits for education, make sure your employees understand what options are available to them and the conditions for taking advantage of them.
For example, if your tuition reimbursement only pays for education within a certain field of study or up to a certain amount, employees need to know what they’re financially responsible for. Satisfactory academic progress is another common requirement of tuition reimbursement.
Tips for Educating Gen Z on Benefits
There’s a lot of information to cover, but here are some tips to make benefits education stick with your Gen Z employees.
Offer Customizable Plans
Employees have different needs and circumstances that can impact their decisions for benefits. Instead of choosing a cookie-cutter plan that only dissatisfy employees and waste money, offer customizable benefits plans that employees can adjust for their own needs.
Educate Them on Their Options
Employees need to know what options are available to choose the right benefits. Otherwise, they may just pick whatever is in front of them, missing the true value of the benefits packages you offer.
In addition, a new graduate may not understand why choosing the right health insurance plan or contributing to a retirement plan is a good move while they’re young to secure their financial future as they near retirement.
You can use tools like workshops or forums with questions and answers, archived resources, and enrollment meetings to educate employees. Having a mix of different options allows all employees to access the information they need.
Talk About Benefits Outside of Open Enrollment
Benefits conversations tend to take place around open enrollment, but they shouldn’t be limited to this period. Schedule time to discuss benefits throughout the year and around major life changes, such as starting a family. Any big changes in an employee’s life can lead to changes in their benefits plan.
Educate Your Gen Z Employees
If you want to attract the right Gen Z talent, retain them, and keep them loyal to your company, benefits education is a great start to ensure they make sound decisions to protect themselves now and in the future.
Author Bio
Frank Mengert continues to find success by spotting opportunities where others see nothing. As the founder and CEO of ebm, a leading provider of employee benefits solutions. Frank has built the business by bridging the gap between insurance and technology driven solutions for brokers, consultants, carriers, and employers nationwide.
The post The Importance of Educating Gen Z on Employee Benefits to Retain Top Talent appeared first on Global Trade Magazine.
