Just as the gaps between the generations are ever more apparent when it comes to embracing new technologies, work/life balance and social interaction, so too are the differences in levels of insurance coverage and expectations about benefits at work. When it comes to designing and communicating benefits, one size does not fit all. And yet, 67 percent of companies do not tailor their benefit communications to different levels or life stages, according to the 2014 Aflac WorkForces Report (AWR).
In designing benefits programs for the generations, it is imperative to take a holistic look at each age cohort, including varying education levels, experiences, life factors and even personality characteristics. Each of these aspects plays a role in what options are best suited to a generation, and more importantly, that appeal to those workers enough to drive participation and enrollment.
The younger generations, particularly those workers currently 34 years of age and under collectively known as the Millennial generation (or Gen Y), are not only an important market to consider — and the future of the workforce — but also a demographic that requires a deeper understanding among agents, brokers and HR professionals. Learning their needs, mindset and buying preferences is critical to converting Millennials from the naïve and free-spirited uninsured to the knowledgeable and protected insured.
The Millennial mindset
Gen Y workers are in a period of transition. They are reaching adulthood and facing the challenges and opportunities that come with personal and economic autonomy. They are typically finishing their education, entering the workforce and making choices about living arrangements, marriage and lifestyle. According to the Bureau of Labor Statistics’ 2011 Consumer Expenditure Survey, households headed by 18- to 24-year-olds spend five times more annually on entertainment and dining out than out-of-pocket spending on health care. The single members of Gen Y are also more likely to rent a home and spend more money on education and alcohol than other cohorts, while spending a smaller share on transportation, personal insurance and pensions than their married counterparts.
Gen Y workers are a bit more skeptical of corporate life compared to other age cohorts, having seen their parents lose jobs and experiencing difficulties in their own job search and entry into the workforce. Nonetheless, they are very capable of staying with their employer for the long haul if given access to the choices and flexibility they expect. For this group in particular, it is critical that HR decision-makers and employers provide immediate access to work/life balance opportunities and a range of benefit options. Absent of these, Gen Y workers will not hesitate to jump ship at the next best job opening. According to the AWR, more than half (60 percent) are at least somewhat likely to look for a new job in the next 12 months, the most likely of all generations.
A portrait of insurance coverage
Findings from the 2014 Aflac WorkForces Report shed further light on the youngest working generation in terms of their understanding of risk, mindset on benefits and buying behaviors.
Younger workers are relatively unfamiliar with the ins and outs of benefits administration, enrollment and the importance of enrollment. In fact, according to the AWR, Gen Y workers are the least engaged, informed and educated about most aspects of benefits among all age cohorts. And nearly two-in-ten Millennials (17 percent) work for an employer that does not offer insurance benefits.
According to the Aflac survey, Millennials are enrolled in the following insurance benefits:
- Major Medical/Health Insurance: 79 percent
- Dental insurance: 69 percent
- Life insurance: 54 percent
- Vision Insurance: 51 percent
- Disability Insurance: 33 percent
- Voluntary Benefits: 16 percent
- 401(k): 61 percent
- Flexible Spending Plan: 20 percent
- Employee Assistance Program (EAP): 11 percent
Millennials believe benefits influence aspects of job satisfaction and loyalty far more than their other generation counterparts. For example, 34 percent believe an overall benefits package is extremely important to their job satisfaction, compared to 30 percent overall. Nearly one-quarter (24 percent) of Gen Y workers believe an overall benefits package is extremely important to their loyalty. And 64 percent believe an overall benefits package is extremely/very important to their work productivity — more so than any other generation.
While this generation clearly sees the value in a robust benefits package, Millennials are one of the least likely generations to consider purchasing voluntary insurance, perhaps due to lack of knowledge or perceived need. Just over half (53 percent) say they are not at all/not very likely to purchase voluntary insurance benefit options if their employer offered them. Also influencing the lack of interest in benefits is a general sense of invincibility among younger workers. The Aflac survey finds that nearly all Gen Y employees feel they are not at all likely to experience serious medical events.