Gen Z Is Made for Employee Benefits
by Lauren Canfield, Vice President, Corporate Actuary and Chief Risk Officer at The Standard
Generation Z’s forward-thinking approach to finances makes this cohort a natural fit for employee benefits. The Standard’s research on Gen Zers’ relationship to benefits shows they possess a future-oriented outlook toward finances, valuing saving, financial literacy and traditional benefits like life insurance. We also found that HR leaders and managers have perspectives on Gen Z that don’t always align with Gen Z’s own goals and preferences.
Despite an expectation that young people prefer to live in the moment than to shore up their future, it shouldn’t surprise us that this isn’t true for Gen Z. Multiple recessions have now had a significant impact on their formative years. Their Gen X parents didn’t benefit from the historic economic expansion that assisted many baby boomers. So Gen Z is less likely to have grown up with a strong sense of financial security.
A Game Changer for Voluntary
Gen Z’s hunger for financial security could make voluntary benefits a game changer for the industry, but this also requires HR decision-makers to adjust their view of Gen Z.
Although many HR leaders believe Gen Zers want newer, less typical offerings that appeal to their current lifestyle, they should ensure these young workers can access the conventional benefits that offer the financial security they are looking for, such as life insurance, disability income protection and supplemental indemnity products. Providing financial literacy resources — including education on money management — will also help their Gen Z employees make confident choices about electing voluntary coverages.
PFML Points to Opportunities to Build Loyalty
Another interesting data point from the research is that Gen Zers rank paid family and medical leave second on their list of top five benefits. Leveraging your carrier’s absence management experience may help you communicate with Gen Z employees on the leave programs you offer. Doing so will increase participation in these programs and loyalty to your organization.
Use Your Carrier to Communicate
When communicating about benefits like paid leave with Gen Z employees, there’s another reason to leverage your carrier. Our research indicates that Gen Zers expect workplace benefits providers to play an active role in addressing social issues, more so than banks, credit card companies or fashion brands. Gen Z’s elevated expectations for benefits providers indicate greater trust and willingness to look to carriers as an advisor and force for good than we may have seen in previous generations.
The events that occurred during Gen Zers’ early years have primed them to grasp the power of employee benefits. My advice to businesses is to leverage that mindset in recruiting and onboarding. You will have new, younger employees, often with minimal knowledge of how benefits work. But if they’re already thinking about planning and saving, it’s not hard to grasp the “what’s in it for me” of employee benefits. Just make sure you’re not simply listing features with no connection to what Gen Z cares about. If you’re looking for help, talk to your carrier. They’re experts in explaining the “benefit of benefits.”
The Takeaway
Overall, our research on Gen Z is good news for an organization’s benefits budget. The findings suggest less need to innovate extensively or to bring on too many disparate niche benefits. For this generation, you can really double down on what is critical to anyone's financial stability and demonstrate the value of your core benefits package to your employees.
Lauren Canfield is vice president, corporate actuary and chief risk officer for StanCorp Financial Group, Inc., Standard Insurance Company and The Standard Life Insurance Company of New York. Canfield is responsible for enterprise risk management, asset liability management and economic capital management.