How Workforce Demographics Are Shaping Benefits for Employees

With unemployment continuing to decline since 2010, employers are reviewing their benefits for employees to ensure they remain competitive and don’t lose top talent to competitors. As the workplace evolves, employers face the challenge of accommodating a more diverse environment—both in terms of workforce demographics and cultural backgrounds. In California especially, the number of foreign-born workers is growing, making diversity a critical consideration.

It’s important to recognize that group benefits are not a one-size-fits-all package. Millennials have different needs than Baby Boomers, who are working longer to maximize their Social Security benefits. To retain a multigenerational, multicultural workforce, companies must adapt.

Below are ways employers are redesigning their benefits offerings to better serve today’s evolving employee demographics.

Benefits for Employees by Generation

Generation Y (Millennials)

According to the U.S. Bureau of Labor Statistics, by 2030, Millennials (born between 1981 and 1996) are expected to make up 75% of the workforce. Since Millennials tend to be healthier than their Gen X and Baby Boomer peers, they are often satisfied with high deductible health plans (HDHPs).

Employers offering HDHPs are finding that Millennials also value Health Savings Accounts (HSAs). HSAs allow them to pay only for the benefits they need while saving money in a tax-advantaged account for future medical expenses.

Another increasingly popular offering is Student Loan Repayment programs, which address the financial burden many Millennials face. Companies across industries are adding this life-changing perk to attract and retain younger employees.

Work-life balance is also a major concern. With the average workweek increasing from 40 to 47 hours, Millennials are seeking:

• A stimulating company culture

• Social engagement and team-building opportunities

• Wellness programs promoting healthy behaviors

• Perks such as on-site yoga or gym membership subsidies

These types of benefits for employees help foster loyalty and increase retention among younger generations.

Generation X and Baby Boomers

Gen X and Baby Boomers (born between 1946 and 1980) are typically focused on supporting their families and saving for retirement. This demographic places a high value on benefits that offer income protection and financial stability.

Popular benefit offerings include:

• Employer-matched or defined contribution retirement plans

• Traditional 401(k) plans

• Financial wellness programs and educational workshops

• Long- and short-term disability insurance

• Long-term care, accident, cancer, hospital, and critical illness insurance

These plans help provide financial support during unexpected life events and are often easier and more affordable to obtain through a group plan.

Group life insurance is commonly included in a comprehensive benefit package and may be subsidized by the employer up to a certain face value. Employees can often purchase additional Voluntary Term Life Insurance for themselves and their dependents at group rates.

Enrollment in life insurance through work is typically high due to:

• Lower costs

• Easier qualification than individual plans

• Convenient payroll deductions

Employers can also ask their broker whether the group life insurance policy includes access to a Will and Legal Document Center, an online portal that helps employees create estate planning documents and access legal resources.

Cultural Diversity and Cross-Border Considerations

As workforce demographics in California continue to evolve, cultural and linguistic diversity are becoming even more important in benefit planning.

For employees who live in Mexico or are primarily Spanish-speaking, it’s essential to provide benefits information in Spanish. Many individuals skip enrolling in benefits simply because they don’t understand what is being offered.

Employers can address this by:

• Providing benefits materials and enrollment forms in Spanish

• Coordinating a Spanish-speaking enroller for Open Enrollment meetings

If a significant portion of your workforce lives in Mexico, you might also consider offering a cross-border group medical and/or dental plan. Carriers such as MediExcel and SIMNSA have seen increased popularity. Other providers, including Health Net, are now offering similar cross-border plans tailored for California employers.

These plans offer:

• Affordable medical coverage in Mexico

• Emergency coverage in the U.S.

• ACA compliance

• Accessibility for binational employees

Tailor Your Benefits Strategy to Workforce Demographics

Not every employee values the same perks, so if your company has a diverse workforce, it’s essential to survey employees to understand what benefits matter most to them.

Work with your broker to evaluate how your current offerings align with your shifting workforce demographics, and how to keep your benefits for employees competitive and relevant.