Generation Z is beginning to burst into the workplace, and this youngest group of workers is determining benefits to be a deal breaker when it comes to accepting a job offer.
Benefits are so important to Gen Z that 60% of this age group said they would accept a lower starting salary at a job in return for a strong benefits package, a Lincoln Financial Group survey revealed.
The oldest members of Gen Z are taking their initial steps into the world of work and poised to overtake the millennial generation as the largest age group in the workplace.
As more members of Gen Z graduate from school and enter the workforce, benefits carriers are paying attention to what this group wants out of their workplace benefits. The findings show these young adults are serious about benefits.
Nontraditional benefits or perks such as wellness programs or access to an onsite gym may be popular with Gen Z, but benefits such as these aren’t necessarily what this youngest generation considers when choosing an employer. What Gen Z really wants, carriers say, is a strong benefits package that will help them become financially secure.
The finding that 60% of Gen Z would rather have good benefits than a higher starting salary was surprising to Eric Reisenwitz, interim president, group protection, Lincoln Financial Group. Lincoln Financial surveyed Gen Z to learn more about their benefits preferences. But Reisenwitz said that statistic is in line with Gen Z’s need to achieve financial security.
Gen Z saw how the Great Recession hurt their parents’ finances, and they want to shield themselves from the effect of an economic downturn, Reisenwitz said.
“So they are looking for employers who will help them find ways to save money and become more financially stable,” he said. “This generation is thinking more about retirement than workers of other generations did when they were that age.”
Traditional benefits are still top of mind with Gen Z, the Lincoln Financial survey showed.
“Seventy-two percent said health insurance is important to them, and 24% think dental insurance is important,” Reisenwitz said. “But what was surprising to us was that 50% are saying they want their employer to offer life insurance at work. We’re talking about 18- to 23-year-olds, so that is a significant percentage of young adults who want to obtain life insurance through the workplace.”
In particular, Gen Z workers are interested in benefits that will help them manage their student loan debt, the survey showed.
Gen Zers are known for being digital natives who were born into a world where they have access to any kind of information at their fingertips. But this generation is looking to their fellow humans for advice on benefits, Reisenwitz said.
“Interestingly enough, a lot of Gen Zers are looking to their parents for advice. And they’re looking to their benefits counselors or their HR teams at their workplace. But they’re also interested in getting information online through whatever app they have.”
That combination of getting information both online and by having a dialogue with someone they trust will guide Gen Z through the benefits education and selection process, Reisenwitz said.
“We are seeing Gen Z has a high level of interest in wanting to have a dialogue about their benefits options,” he added. “Then once they decide what they want to do, they definitely want to have access to information. They definitely want to be able to do it on their own and find it on their own and get information on their own. But they’re willing to talk and get information the old-fashioned way.”
Gen Z’s benefits needs will evolve as this generation begins to move through the various milestones of adulthood. Benefits brokers need to think about the best way to address those needs, Reisenwitz said.
“Brokers can provide a huge advantage to the employers they serve by providing information on what a 22-year-old coming out of college with $50,000 in student loans is thinking about when they get their first job. And then thinking about what happens five years later when they are buying a house or starting a family or things along those lines.”
Retirement Plans A Must-Have
Gen Zers consider a number of factors when looking at a prospective employer, MetLife research revealed. More than salary or benefits, Gen Zers want to be proud of where they work.
These young adults are looking to their employers to help relieve their financial stress and protect them from financial setbacks, MetLife’s report “Meet Gen Z: The New Face Of Work” said.
More than half (54%) of Gen Zers said finances are their top source of stress, as compared with 42% of the total population. Two-thirds of Gen Zers said they believe their employers should help them with their financial well-being and say nontraditional benefits would help reduce their stress.
Retirement plans are a must-have employee benefit, according to 55% of Gen Zers. Voluntary benefits such as accident insurance, critical illness insurance, hospital indemnity insurance and cancer insurance were cited by Gen Zers as valuable to their financial security.
These benefits all tie in to Gen Z’s quest for financial peace of mind, said Bradd Chignoli, MetLife senior vice president for group benefits.
“The top thing we learned in our survey is that Gen Z is really focused on financial protection,” he said. “That’s not surprising when you consider Gen Z has a significant amount of student debt. This survey told us that Gen Z wants nontraditional benefits that would help them reduce debt.”
That means the traditional medical, retirement, dental insurance are important to them, Chignoli said. But Gen Zers also are interested in benefits such as telecommuting and unlimited paid time off as well as voluntary benefits such as critical illness or accident insurance or legal insurance. Those benefits help people control unexpected expenses so that their financials remain stable.
Another characteristic of Gen Z is that they are flexible and always on the move, so the way they access information on benefits must be flexible as well, the MetLife study showed.
Gen Zers still appreciate traditional channels such as handbooks, company and provider websites and in-person sessions to engage with and learn about their benefits. But they also want to engage with their benefits and employers on mobile apps and social media.
That desire for flexibility as Gen Z continues to evolve as a workforce is key to benefits brokers and their employer clients to create the best benefits packages for that generation, Chignoli said.
“It’s about helping their employer clients understand how best to create employee benefits packages, how to make it easy to access information on how the benefits programs can help Gen Z in their personal lives, and how they can make benefits relevant today and tomorrow for themselves and their growing families.”