Meet the needs of a changing workforce

When asked to rate their current benefits package, most employees feel it is satisfactory and largely meets their needs (Figure 7); however, few are actively engaged with their benefits programs and promote the merits of their benefits package. For most employees, the report card for benefits reads, “OK, but could do better.”

Figure 7. Employee views on their benefits deal

This is especially true for lower paid employees, who view their benefits plans more negatively than those earning higher salaries. Today’s benefits appeal most to the highly paid, but even among those workers are not found to be truly engaging.

This matters for employers. Promoters (those who are fully engaged with their employer’s benefits package) are twice as likely as detractors and approximately 1.5 times as likely as passives to regard their benefits packages as an important reason to stay with their employer.

What can employers do to address this gap? To better understand what benefits employees want, we asked them to select their preferred benefits allocation from a budget of 100 units (Figure 8).
Three key results emerge:

1. Employees want to focus their benefits spend on their core retirement, health and protection benefits.
2. Employees desire a broader benefits deal, with significant portions allocated to nontraditional benefits or to more generous paid time off
3. Employees’ wants and needs vary significantly: One in 10 would prefer half their budget spent on wealth (retirement and financial wellbeing), but another one in 10 would prefer 5% or less.

Figure 8. Benefits preferences vary greatly across employees

With such a wide dispersion of views across employees on their preferred mix of benefits, one-size benefits plans cannot hope to please all of the people all of the time. Employers looking to gain more value on their benefits spend will need to focus on providing more choice and flexibility, allowing employees to select the options that best meet their needs.

The case for choice and flexibility is also evident when we compare how employees feel about their benefits when different levels of choice and flexibility are offered.

Those with full flexibility (a benefits fund from which to make benefits choices as well as the option to purchase voluntary benefits) are markedly more likely to say that their benefits package meets their needs than those who are offered no choice in benefits. Clearly there is value for employers in offering greater choice (Figure 9).

Figure 9. The role of benefits choice

Finally, we asked employees which workplace perks they would most favor, if their employer were to offer them (Figures 10a and 10b). The differences are varied:

• Support around financial wellbeing is the most popular option in all regions (except Latin America) and across all generations.
• Wellness perks are the second most popular option in North America, particularly for baby boomers, but they are less popular in other regions and for other generations.
• Perks supporting education are more popular in Asia and Latin America and with young employees.
• Family benefits are more popular in Asia and in Europe, Middle East and Africa (EMEA), as well as among Gen X and Gen Y.

Taken together, three lessons are key for employers wanting to redesign benefits packages:

1. 01

   Protect and enhance core benefits;

2. 02

   Provide a wide range of benefits options, including nontraditional benefits;

3. 03

   Provide employees the flexibility to meet their own individual needs.

Figure 10a. Preferences for workplace perks by region

Figure 10b. Preferences for workplace perks by generation