This article was first published in San Francisco Business Times.
Millennials are reshaping the workforce, so is it any surprise their priorities are also redefining employee benefit programs?
Unlike employees in years past, highly-motivated, highly-educated millennials are looking for more than just a 401(k) contribution, medical and dental insurance, and paid-time off.
They’re actually looking for employee benefits that help them with challenges previous generations never encountered, like the crushing burden of student debt. And, they want their employers to offer a broader range of health and wellness benefits to support their active lifestyles.
Why millennials matter so much
For employers, satisfying the changing priorities of millennials is critical. In 2016, millennials – those between those ages 21 to 36 last year – became the largest generation in the workforce, according to Pew Research. Today, one in three workers is a millennial. By 2025, 75 percent of the workforce will be millennials.
In today’s increasingly tight labor market, particularly in urban centers like the San Francisco Bay Area where technology firms have set a very high bar, benefit programs that address millennial concerns can make all the difference in successful recruiting.
In our work with large and small firms across every industry segment, we have partnered with employee benefits program managers to suggest innovative benefits that align with millennial lifestyles.
Student loan debt
According to a study commissioned by Gradifi, a provider of student loan debt repayment programs for employers, 90 percent of those with outstanding student loan debt said a student loan repayment benefit would positively impact their decision to accept a job offer, to recommend an employer or to stay at their current employer.
Eight in 10 people with student loan debt said it is a significant source of stress. Fifty-eight percent of those with outstanding student loan debt said they prefer their employer help them pay down their student debt rather than make additional contributions to their retirement savings.
Employers who make direct contributions to pay down an employee’s student loans can get out of debt much faster. For a loan of $26,500 – the median amount borrowed for a bachelor’s degree – a $100 per month employer contribution would save over $10,000 in principal and interest over 10 years for a loan with a 4 percent interest rate. The loan would be paid off three years earlier as a result.
Many millennials are putting careers ahead of everything else, but when they turn to starting a family, they are looking to their employers to help.
As a result, benefits such as fertility treatments are an increasingly common offering. Carrot, for example, provides fertility benefits through a direct reimbursement model as a workplace benefit. Employees receive an allotted amount to spend on fertility treatments – egg freezing, IVF, IUI.
Another popular benefit is adoption assistance. Because the process can be so difficult and expensive, employers are offering direct reimbursement programs for qualifying expenses. Some of the expenses include adoption fees, court costs, attorney fees, traveling expenses and other expenses incurred in the legal adoption of a child.
Health and wellness
Wellness is another key priority, and employers have responded by expanding their offerings. Because millennials tend to work long hours and are always connected, managing stress and work-life balance are critical.
As a result, we’ve seen a growing number of employer provide on-site medical clinics for health check-ups or flu shots, telemedicine offerings, free same-day prescription delivery, onsite therapists and massages, and spaces where employees can take a mental break – sleep pods, relaxation rooms, and game and arcade rooms
In terms of making life easier, more employers are providing on-site or pick-up laundry service, free meals, healthy snacks, and grocery delivery services. Progressive employers realize that healthier and refreshed employees are more productive.
Millennials will continue to redefine the business world for the foreseeable future. To compete and win in today’s marketplace for talent, a benefits package that speaks to the concerns of millennials can be a clear competitive advantage.
Learn how Marsh & McLennan Agency can help you put together an employee benefits program to differentiate your company and attract and retain talent.