By Michelle Nguyen
Brace yourselves for a new era filled with travel pictures, social media hashtags, and avocados on toast! Generation Y, aka the millennial generation, has joined the workforce and will take over 75 percent of it by 2025. They bring a shift in lifestyles, attitudes, and values, particularly when it comes to what they look for in an ideal job package. It is, therefore, extremely important for employers to note these changes when crafting a compensation and benefits package that attracts and keeps these young talents for a long time. According to a study of employee benefits trends by MetLife, 60 percent of companies have differentiated their employee benefits packages by generation. It is not safe to assume that millennials prefer the same benefits that their parents do. One difference between Gen X and Gen Y workplace attitudes is, actually, prioritization of employee benefits.
Millennials are perhaps misunderstood by their parents’ generation to be a lazy bunch who enjoy partying, traveling, and job hopping over workplace stability and delayed gratification. According to a 2007 survey by Michigan State University, Generation X job recruiters expected millennials to place a heavier weight on factors like prestige and salary than on factors like job security and benefits in career choice. However, millennials’ answers to that same survey revealed just the opposite. This finding is consistent with the results of a 2006 survey by the National Association of Colleges and Employers. Overall, it seems that millennials are more risk-averse than the older generation assumes and value “job stability” and “a good benefits package” the most in considering job options.
So why is it that many millennials do not stick with a certain job for more than three years? Many factors may be at play, such as desire to experience different company atmospheres and functional roles before settling down, or desire for personal growth and finding the right fit. Perhaps internet media overload is killing their attention spans and feeding their restlessness. On the other hand, it turns out that more than half of the millennial workers actually do stay put in their work life. According to a MetLife Study, 63 percent of millennials chose to stay with their employers, saying that a good benefits package was the key reason. Moreover, the degree of loyalty to an employer may be influenced by the extent to which a millennial feels the company is looking out for his best interest. Millennials tend to consult with their parents, more so than other generations, on matters such as career choice. They are used to trusting their parents to take care of them and provide them with safety and security. Therefore, they probably look for that same sense of protection with an employer. According to MetLife, 49 percent of millennials claim they stress less about health and personal finance because of job benefits. If they feel secure in this way, chances are they will not make a sudden move to switch companies. So, it seems obvious that companies should take the time to develop some good employee benefits.
What kind of employee benefits would interest millennials, in particular? Well research finds that they desire perks like paid time off, a flexible schedule, and surprisingly enough, a promising retirement plan. Yes, even though they are still enjoying life in their 20s, millennials are looking out for their future and thinking ahead to retirement. They especially want a retirement plan that minimizes financial risk. In fact, studies show that millennials who take part in employee stock ownership plans (ESOPs) enjoy this type of financial security, as they claim a higher income and attain more wealth overall. Further, 52 percent of employees of companies with ESOPs say they have work flexibility (compared to only 34 percent of workers in non-employee-owned companies), which is another attractive benefit for millennials. The boosted sense of ownership and empowerment that millennials get from ESOPs is not a bad bonus, either. After all, this is a generation that is focused on self-expression in the form of personal brand and strives for control over as much as possible in life happiness.
Further, employees whose work becomes part of their own personal brand will be proud to talk about the company on nights out with friends, dinner with family, and even in pictures on social media. By providing this sense of work fulfillment, employee ownership can start a positive feedback loop with happy workers who promote and grow their company every day.
Michelle Nguyen, Rady MBA 2018 Candidate