Should benefits packages be tailored to different generations?
October 2, 2008 by Sam NarisiPosted in: Attracting talent, Entry level recruiting, Executive recruiting, In This Week's E-Newsletter, Latest News & Views
It’s often said that employees in different age groups want different things. Does that mean companies should change their compensation packages accordingly?
Most employers aren’t doing so — 56% of companies don’t consider generational differences when planning compensation strategies, according to a recent study by World at Work. And only 3% are actively executing a plan that takes all generations into account.
Is that a bad thing? On one hand, with benefits such as health care and retirement plans, older employees may have significantly different wants and needs than their younger counterparts.
But on the other hand, all employees are different and may have varying preferences no matter what generation they’re in.
What about at your company? Do you offer different packages to attract workers in different age groups? Has it worked? Let us know by leaving a comment below.
Tags: benefits, compensation, generations
October 3rd, 2008 at 2:54 pm
We don’t. We just try to offer the best benefits we can over a broad spectrum, hoping people can pick those that most meet their needs. We do supply company-paid life insurance and long and short term disability insurance for all employees at no cost to them, but the other benefits are optional, even if the company contributes toward the premium if they opt in.
October 3rd, 2008 at 3:02 pm
We don’t either. In fact I think it would be incredibly time comsuming to even try to. Most HR departments are shorthanded, adding more plans and items for each age group would just make more of a work load.
October 16th, 2008 at 5:26 pm
It seems to me that focusing on generational differences and trying to tailor benefits to each generation is just opening up a company to a discrimination claim. It’s better to just offer the best plans the company can afford and allow the employess to choose those that suit their needs.
October 21st, 2008 at 12:59 pm
I agree with KO - when you designate benefits per class or group, you can definitely open yourself up to discrimiation claims - AKA, disparate impact. Also, when you have a health plan that ends up being just for one generation, you will run into HUGE differences in premiums as well. For example, insurance companies consider older participants to be more likely to be or get ill. So, if the employer made a plan “suited” for the Baby Boomer generation, it is likely that mostly Baby Boomers will make up that subgroup for that particular plan. Premiums will skyrocket in anticipation of risk/usage for that plan. So, because of the demographic of the Baby Boomer group, they are going to see an enormous jump in premiums, that were otherwise balanced in a larger group - made up of the entire population of the employe’s eligible employees.
In short, THIS IS NOT A GOOD IDEA!