Employee benefits evolve to attract multi-gen workforce

Listen to this article

As companies vie to recruit and retain talented employees in a competitive job market how important are benefits and what kinds of benefits are most sought after? We spoke to two local leaders in the field to find out.

“I think because the job market has become so competitive benefits are right up there with wages,” said Marc A. Simmons, senior consultant at Simco Services, a Canandaigua firm that streamlines human HR, payroll, employee benefits and risk management. “I think they’re both very important.”

Traditional benefits that Simmons points to as core components employers need to offer to stay in the hiring and retention game are medical, dental, life and disability insurances, as well as some type of retirement plan.

“Health care today is so expensive that if you don’t have insurance you have a lot of out-of-pocket expenses that are unbelievable in cost,” Simmons said.

The 2024 Society for Human Resource Management (SHRM) Employee Benefits Survey underscores this fact, with health care-related benefits remaining the benefit type employers are most likely to select as either “extremely important” or “very important” to their workforces (88%). Retirement savings and planning benefits tied with leave benefits for second at 81%.

Simmons said employees today also look for greater ease in accessing information about their benefits and that there is great growth in the benefits administration and technology space.

“Technologies are really starting to get much more robust than they were five years ago and that’s helping administrators become more streamlined,” Simmons said. “And it’s great for the employee because they can go onto their portals now, look at their pay stub and then two clicks over, they can look at their benefit package.”

Keith Williams, managing partner, strategic consultation, and relationship management at the Consiliarium Group, LLC, a Pittsford-based employee benefits consulting firm, says benefits are a key component to the hiring and retention process today, but that there are general differences in what employees and prospective employees of different generations are looking for.

“Benefits are critical, and they probably are becoming more important, but what a Baby Boomer thinks a benefit is and what a Gen Z thinks a benefit is are two different things,” Williams said. “That’s the very interesting thing about benefits today.”

Williams notes that members of Gen Z (born between 1997 and 2012) now outnumber Baby Boomers (born between 1946 and 1964) in the workforce and that from his experience they have very different views on the importance of different benefits.

Whereas he has seen Baby Boomers and Gen X (born between 1965 and 1980) prioritizing more traditional benefits like health care and disability, he’s found employees from the Gen Z and Millennial (1981-1996) generations more focused on “newer” benefits like workday and location flexibility, mental health and wellness.

“While I think that benefits are critical, when companies are recruiting people in different life cycles it’s important to understand that what’s important to one group may not be to another,” he said. “You really need to look by silo at what’s important to each group and also how you communicate with them, because the way I like to get information is generally different than the way someone who is Gen Z does.”

Marsh McLennan Agency’s 2025 Employee Health & Benefits Trends silos the top aspirations of the four working groups as:

• Boomers (15% of the U.S. workforce): job and health security.

• Gen X (31% of the U.S. workforce): work-life balance.

• Millennials/Gen Y (36% of the U.S. workforce): freedom and flexibility.

• Gen Z (18% of the U.S. workforce): security and stability.

Williams says despite the generational differences, he believes the core benefits remain medical, pension/401K and disability. Beyond those, he says many voluntary benefits are becoming more popular, especially to certain generational groups, such as emergency fund accounts, support around eldercare and pet insurance.

“We’ve always loved pets, but when Covid came around, I think that the importance of pets and the love for pets got a boost because it was therapeutic to have them around and we spent more time with them,” said Williams, who saw a greater interest in pet care insurance come from this time.

Another change that Williams saw came out of the pandemic was greater interest from companies in providing mental health and wellness benefits.

“One of the blessings that came out of Covid was the need to help each other, to lean on each other and reach out to each other,” Williams said. “Virtual tools came about, especially for frontline workers, which have now trickled down to everybody. We’ve seen more telemedicine mental health apps and companies that have made a concerted effort to have mental health days.”

Overall, Williams says the fight for talent in Rochester is real and that benefits — when in touch with the needs and wants of different generations — are a key way for companies to differentiate themselves as they compete for that talent.

“I think one of the greatest things that an employee benefits consultant or an HR person or a business owner needs to realize are the different silos of benefits when you’re recruiting matter,” he said. “There are the core benefits needed for all and then there are the benefits that people in different life cycles want because what’s important to me at the tail end of my career is different than what’s important to someone at the front end.”

Caurie Putnam is a Rochester-area freelance writer.