Much has been said about “job-hopping Millennials” and how they “prefer” to work as freelancers. More young people than ever before are categorized as contractors. In 2018, that figure was about 47%. Future studies are almost sure to find the number has continued to increase.
But it’s a mistake to assume this trend represents a preference on younger workers’ part. As we watch the number of freelancers rise, it’s important to remember freelancing can be a survival response to the loss of steady employment prospects – a challenge only exacerbated by 2020’s upheavals.
Millennials are now the largest generation in the workforce. The eldest among them are nearing 40.
And the dynamics of the workplace are not new to them. They know full well what has been lost between their grandparents’ generation and their own: Job security, benefits once thought fundamental to planning for the future, and an employer-employee relationship that isn’t solely transactional.
The Millennial employee experience has been thrown into stark contrast with the norms of the past by COVID-19. Although there are finally some optimistic signs, the same generation that saw its career launch derailed by the Great Recession faces loss of income during prime earnings years.
Where do employee benefits fit into the picture? The answer is simple: Wellness.
Financial And Personal Wellness Are Slipping Out Of Reach For Millennials – And It Matters For Employers
Seemingly just as soon as Gallup was touting the highest employee engagement figures ever, those figures have been reversed: In July 2020, Gallup reported a historic drop in U.S. employee engagement: From 38% engaged to 31%.
Although many of the factors driving this drop are external to the workplace, employers can’t afford to sit idly by. Employee stress negatively affects productivity. Although employee turnover is likely to be depressed until vaccination increases, burnout is a constant threat under such fraught circumstances.
PwC’s 9th Annual Employee Financial Wellness Survey shines a spotlight on the problem, indicating finances are the top cause of stress and a major distraction from work. More employees cite finances as their #1 stressor than all other potential answers combined. Millennials are more likely than others to feel this stress.
Nor is this the only stressor making a substantial difference. Health concerns are also common.
Employee benefits professionals have good reason to be shocked by the research. Studies show that Millennial workers tend to be in worse health than their elders were at a similar point in life. Depression, high cholesterol, and high blood pressure are just a few concerns they are dealing with earlier.
Even the most seasoned employee benefits expert might conclude that cash incentives are the best way to address the many facets of these problems. But employee benefits can have dollar-for-dollar effects on wellness far beyond what individuals can attain alone.
Blast From The Past: Younger Employees Look To Employers To Get Involved
Employee benefits and other well-being investments signal that leaders truly care about their employees. As external pressures spiral beyond what most individuals are prepared to manage, the employer’s role in wellness can harken back to an earlier era of long-term loyalty.
The timing may be perfect for Millennials, who have seen throughout their lives that “no man is an island.”
What new employee benefits innovations are meeting these needs?
These ideas are in vogue among employee benefits thought leaders:
1. Early Pay Access
Early pay access allows workers to tap funds they’ve already earned between paydays and get an accelerated payout. This is great for emergency spending that might otherwise require the use of credit. It also helps lower-paid workers avoid traps such as payday loans, which prey on funding gaps and delays.
2. 529 Savings
A 529 is a tax-advantaged savings plan especially for future education costs. It makes sense for Millennials, many of whom are now part of the so-called “sandwich generation” taking care of elderly parents and growing kids at the same time. This may reduce the prevalence of student loan debts that last for decades.
3. Paid Time Off Conversion
Among employee benefits, paid time off (PTO) often gets a bad rap. Many Americans avoid using PTO for fear of being seen as slackers. While getting more employees to use PTO is a laudable goal, simplified PTO conversion ensures they get value – in the form of cash or other benefits – instead of letting that time disappear.
4. Performance-Based Pay Incentives
Performance-based pay doesn’t end with occasional commissions or crunch-time bonuses. Instead, employee benefits professionals are discovering the wisdom of adding a few percentage points to annual raises based on performance – which also makes it easier to focus on implementing annual performance evaluation feedback!
5. Retirement Savings
With traditional entitlement programs like Social Security on the ropes, retirement savings are poised to become an even more critical part of long-term life planning. The earlier savings start, the better. Employers who take an active role in retirement create tangible reasons for employees to stick around for years to come.
The Latest Figures On Employee Benefits Expenses For 2021 Confirm Wellness Drives Strategic Spending
Innovation is crucial to success in 2021 and beyond. No matter what businesses do, certain employee benefits categories are poised to increase: Rather than standing still, enterprises should embrace the change and look for new ways to get ROI on their personnel investments.
Here’s where experts expect employee benefits spend to grow most:
1. Mental Health Care
In a world characterized by so much uncertainty, anxiety and depression are sure to follow. In the past, it has been hard to talk about these things and even harder to get help – but the stigma is starting to erode. That’s especially true now that telehealth makes the process even more private.
2. Help For Working Parents
With a record number of women leaving the workforce, families all over the country face strain trying to balance childcare and careers. The best way for employers to divert parents from a working hiatus that may be permanent is to focus on employee benefits that lift the burden, especially where childcare is concerned.
3. Disability Claims
One of the biggest dangers of the pandemic is “long COVID,” in which former COVID patients exhibit symptoms for months at a time. This syndrome remains a mystery, but it’s very likely to result in a greater number of disability claims in the future. Specialty medications may be necessary, too.
The Employee Benefits Enigma For Younger Workers Always Points Back To Health Insurance
There are many things for today’s younger workers to worry about, but much of their anxiety comes back to healthcare. Long after the public health crisis is over, it will continue to influence workers’ cost-benefit analyses about their employment options. That’s true not just for Millennials, but future Gen Z workers.
If you are an entrepreneur or 1099 contractor whose earnings exempt you from an ACA subsidy, don’t leave your healthcare to chance. Contact us to learn about ACA health insurance alternatives.