The workforce has shifted dramatically over the last few years with Boomers retiring and Gen Z making their entrance. By 2025, employers will profoundly feel the presence of Gen Z, estimated to represent 27% of the workforce.
While Gen Z’s workforce numbers are still relatively low, their impact is already felt as they prioritize wellbeing and push for a wider scope of employee benefits. In fact, between 2021 and 2022, Aon found the availability of voluntary benefits from employers increased 41%.
Not only are the dynamics of different generations at play, but employers also face a shrinking talent pool. Since the start of the pandemic, an estimated 2.6 million workers have left their jobs.
Svenja Gudell, chief economist at Indeed noted, “It is a fundamental error to think that as COVID-19 recedes, hiring difficulties will evaporate. Deep-seated and long-term supply dynamics will continue to be a major force that creates a persistent gap between employer demand for new hires and the supply of candidates.”
The culmination of these two factors will have real implications for employers, namely a fight to attract and retain talent.
Investing in people means investing in what they prioritize. Bolstering benefits and deepening other initiatives like professional development and diversity, equity, and inclusion (DEI) will help employers attract, engage, and retain top talent.
As generations shift and the talent pool shrinks, here are five key priorities for employers:
“CEOs who have the belief that employees are all going to come back into the office someday are laboring under a delusion…the cat is out of the bag and not going back in,” says Josh Bersin, HR Industry Analyst.
Our data shows a similar sentiment with 97% of our Solvers reporting that they can be very productive working remotely. However, with a recent push to return to the office, some employers have a long way to go bridging the flexibility gap. Our 2022 State of Workplace Empathy study shows that 94% of employees view flexible work hours as empathetic, but the option is only offered at 38% of organizations.
While all demographics may look at their benefits differently, most share a need for their benefits to work harder for them—especially at this time of record inflation when many employees are living paycheck to paycheck. According to MetLife, 75% of employees surveyed say more choices in their benefits would reduce their stress and improve their financial wellness.
While offering more robust benefits is critical, decision-support tools are critical to helping employees optimize their benefits. For the 2023 plan year, 60% of employees who used the MyChoice Recommendation Engine elected a high-deductible health plan (HDHP) paired with a health savings account (HSA). Without decision support, only 20% of employees enrolled in an HDHP and a cost-savings vehicle like an HSA.
Consumers have come to expect real-time answers and continuous digital experiences. As consumers of benefits, employees are no different. Employees expect their benefits technology experience to be at their fingertips and on their own terms. Case in point, our virtual benefits assistant, Sofia, took more than 2.1 million chats in 2022, 30% of which were after hours or on weekends.
Likewise, for plan year 2023, 89% of employees enrolled themselves in benefits via the web or the MyChoice Mobile App. Unsurprisingly, intuitive technology is especially important to Gen Z: 50% said personalized technology, such as smart benefits tools and HR chatbots, make an organization more empathetic.
Due to a labor shortage, skills development and learning are high on the list of priorities for employers. It’s predicted that people will need to work across multiple roles and projects while employers invest in deeper skills tailored to career growth experiences.
With the generational shift, empathy is not a nice-to-have but a hard skill that is imperative to fostering a culture that’s both a talent magnet and differentiator. On that note, empathetic leadership should be a focus area for many companies. Our empathy study shows only 39% of Gen Z view their CEO as empathetic, suggesting an opportunity for employers to strengthen empathy through training initiatives.
Younger generations expect a deeper set of diversity and social responsibility initiatives, including formalized strategies for DEI and environmental, social, and corporate governance (ESG). Interestingly, 76% of millennials said they’d leave their employer if DEI initiatives were not offered. Companies have had several years now to recognize the importance of DEI and formalize their strategies or risk losing the ability to compete for talent.
These are just a few of the initiatives employers should prioritize in order to adapt and create competitive advantage. Consider these priorities and prepare for a future where employees’ needs and values are diverse, and talent is scarce.
Each generation of workers and type of industry requires unique approaches to organizational culture, employee benefits, and the overall experience.