Generation Z is expected to make up 24% of the U.S. labor force this year. And as with baby boomers , Gen Xers and the millennials before them, when it comes to selecting workplace benefits, employers must be mindful of Gen Z’s preferences. Those considerations should include the fact that many of these workers remain covered by their parents ’ health insurance policies until age 26, a potential advantage for some employers.
Coming Of Age
When Gen Zers turn 26 and have to buy their own insurance, it often comes with shock and bewilderment as they may not understand their needs and options. Many of them may be single and in good health, but despite their entry-level wages, they often gravitate to the plans they know. As a result, we see a tendency to buy plans similar to those their parents had, which are more costly than many 26-year-olds need or can afford.
Over the next few years, employers will need to take on the responsibility of educating Gen Z staff as they enter this new phase. Their companies should guide them through this process when it comes to buying the right coverage and how to avoid overspending.
Choosing Their Own Perks
In addition to the new burden of paying for their own insurance, Gen Z is also shouldering student debt at record levels — the total amount reached $1.6 trillion last year, second only to mortgage debt.
To ease the pain, employer benefits represent a meaningful way to provide additional compensation and attract and retain young talent. Employers who listen to their employees’ challenges and respond with a lineup of meaningful benefits have an opportunity to earn their loyalty.
But what is considered “meaningful” today? Gen Z is generally accustomed to choosing their own options (there’s probably an app for that!) and will likely want to curate their perks for themselves. Employers would be wise to implement systems that give employees as much visibility as possible into their benefits choices and the ability to build a program that suits them. Many larger employers already offer dashboards that present a marketplace of benefit options. Now the challenge is whether smaller employers can implement similar systems.
Especially interesting from a generation that seems to crave personal fulfillment, Gen Z also seems to feel a more profound obligation to improving our world. According to a Deloitte study , 47% of Gen Zers surveyed want to make a positive impact on their community. Research findings also seem to show that they prefer to work for impact-driven organizations.
So, paid volunteer time is a perk worth considering to appeal to these younger employees.
Body And Mind
Mental health is a monumental concern for Gen Z. According to Harvard Business Review , 75% of Gen Z employees have left their jobs because of their mental health. Younger workers are more open to talking about and seeking help for these concerns than older generations.
Last year, we saw a burgeoning number of employers begin to offer dedicated mental health programs such as therapy and video counseling, and policies like unlimited or flexible vacation are now on the rise to reduce stress and ward off burnout. Historically, insurance carriers were more reluctant to recognize psychological health as the equivalent of physical health.
These days, enlightened employers are seeking out services that can make a difference in their younger employees’ lives as they manage the first stage of their career. Choice and transparency are key, as is every part of their online lives. Gen Z wants to understand their options and make informed choices. Let’s not forget, this is a generation that is used to doing comparative online research for practically everything. The importance of acknowledging and addressing mental health as an integral element of overall health is critical to this generation as our world becomes more and more reliant on online socializing and less personal.
As with baby boomers and Generation X, generational needs of Generation Z are distinct and unique, and driven by and large by where they are with their lives. Understanding and speaking to those needs will help employers build benefits portfolios that support a diverse and engaged workforce for a long time to come.