Understanding and defining the needs of different workforce generations is one of the biggest trends in reward strategy and has been for the past few years.
This is no surprise when Generation Y, the children of the late 80s and 90s, are set to make up more than 50% of the workforce by 2020. Their needs are different. They want a more flexible work schedule and crave recognition. As the age range within the workforce widens and demographics continue to shift, it creates increasingly diverse employee requirements. It’s clear that business’ long-term reward strategy will have to change in order to engage and cater to the needs of a multi-generational workforce.
But can you really decipher an employee’s needs from the year they were born in? The answer is of course no. It is not enough to group merely by generation when there are numerous factors that will influence individuals’ benefits preferences, including their gender, location and hobbies. By analysing our clients’ benefits take-up data, we can see that everybody actually wants a bit of everything – and at different times, irrespective of generation. Increasingly, you need to provide benefits that really mean something to employees as individuals.
By working closely with providers we have noticed three tactics the market has taken to move towards a more personalised benefits offering:
1. Respond to expectations – When it comes to finance, health and protection - a certain level of cover is simply expected. But people do not expect lifestyle benefits or discount schemes, employees only want the means to pick and choose what suits them. This is why we’re seeing increasing interest among clients in transitioning towards a spending account system. This allows employees to spend their benefits funding on the things that matter most to them – providing the ultimate level of flexibility and the level of personalisation they require.
2. Modernise communications – Effective and timely communications are crucial to delivering an engaging benefits package. But how do you strike the balance between making employees aware of your offering, and spamming them with unwanted e-mails? Client data has shown us that people engage with personalised recommendations. So this is a great place to start. Alert your employees to benefits that are relevant to their situation whilst increasing engagement and uptake of benefits. Developing a continuous communications strategy that engages all members of the workforce can help employees to feel the full value of the benefits available to them, no matter what their age.
3. Conversation is key – A new development we are seeing through several of our clients is the use of a recommendation system that uses a consultative online conversation approach to understand each employee’s individual & lifestyle goals, and priorities. Such software offers employees a number of highly personalised and bespoke options to select from. A portal will then intuitively provide information based on that conversation.
These trends show employees are calling for a benefits programme that is customised to each individual, regardless of generation. Companies need to take steps to meet these new expectations for the workforce of tomorrow. Personalisation is the only way to answer this call in an engaging and meaningful way. And technology seems to be the enabler, allowing companies to adopt measures that are easy to use and make benefits efficient to administer whilst delivering a truly personalised benefits mix.
This article was written by Jack Curzon, Head of Scheme Design at Thomsons Online Benefits.