Staying ahead of emerging benefit trends and employee expectations
The workplace is in a state of flux. Recent years have seen the emergence of new ways of working, supported by a proliferation of technology and software designed to enable a more digital future.
At the same time, the workforce is changing, marked by the arrival of younger generations with fresh ideas, needs and expectations that will come to shape recruitment and retention strategies in the coming decades.
To appeal to this future workforce, employers need to understand who those employees are and what is important to them.
New workforce, new values
Millennials (born 1981-1996) are set to dominate the global workforce. According to figures from Deloitte, the cohort will represent 75% of the global workforce by 2025 and the next generation – Generation Z (born 1997-2012) – are hot on their heels.
With new generations come new experiences and different priorities. More so than the baby boomers they’re replacing, millennials and Gen Z have been hit hard by the cost-of-living crisis, are more likely to suffer financial stress and anxiety, and may lack awareness of financial products like savings, ISAs, and pensions.
At the same time, these generations are showing to be more mindful of the world and their impact on it. Although pay will remain a priority, this will be weighed against environmental and social concerns, and how closely an employer aligns with their values.
Post-pandemic, the opportunity for remote or hybrid work will also be central to reducing geographical barriers and providing greater working flexibility.
By contrast, employers who aren’t aligned with these trends may find an increased readiness among their employees to move on in search of pastures new.
Wellbeing is key
When preparing for the workforce of tomorrow, one of the most significant factors is wellbeing. More than a measure of physical health, the term also encompasses an employee’s mental and financial health and a recognition of the fact that each is interconnected.
According to a 2022 Deloitte study, 46% of Gen Zs and 38% of millennials describe themselves as stressed all or most of the time. Long-term finances were the most frequently cited cause of stress, followed by day-to-day finances and family health and welfare.
In addition, 45% of both cohorts also reported that they feel burned out due to the intensity of their workload while 22% believed that their employer wasn’t treating employee burnout seriously.
Burnout is costly. Not only does employee happiness suffer, but so do employers – with poor mental health costing between £1,205 and £1,560 per employee per year. This figure includes the whole workforce, not just employees who are ill.
Engagement and communication
As hybrid and remote work increases in volume, employers will need to find better ways to engage and communicate with employees.
Defining ‘engagement’ is not easy. The term generally refers to an employee’s involvement and enthusiasm for their workplace.
Nevertheless, failure to engage employees has significant consequences – including reducing productivity and increasing absenteeism. According to the Gallup Organisation, just 21% of employees are engaged at work, at a cost of $7.8 trillion to the global economy.
When employees are not engaged, it can also affect their more engaged colleagues who, for instance, may lose morale, alter their behaviour, or be driven away from the company altogether. For employers, this means increased time and spend on recruitment and training.
Employers must respond
As the workplace evolves and competition for talent remains high, it is vital that employers stay ahead of the curve when it comes to supporting employees. They need to know who those employees are, understand their values, and tailor benefits packages accordingly.
Flexibility and work-life balance are a major priority and for many employees have become an expectation. Opportunities for career development as well as the chance to make a difference and feel valued will also be key to maintaining wellbeing and keeping employees engaged.
Crucially, however, employers need to realise that, for their employees, it’s no longer about offering as many benefits as you can afford. Rather, it is necessary to approach benefits through a more holistic lens, focused on the type of employer you want to be.
Once a strategy has been identified, it needs to be aligned to a company’s core values, driven from the top down, and instilled within the fabric of an organisation. It’s this, as well as the financial reward, that will make up your employee value proposition and allow you to attract the talent of the future.
In partnership with Lockton People Solutions
Lockton provides creative people solutions that make life better, for your business and your people.