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EXCLUSIVE Talking about my generation

Author : Nicki Thomson

30 January 2014

Do your employee pay and benefits packages meet the expectations of all generations in your workforce?

In recent days and weeks we have and continue to see several more positive economic signs, says Nicki Thomson, head of business services at Barclays. And whether through optimistic comments from Governor of the Bank of England, Mark Carney, lower unemployment numbers or improving PMI returns, we may at last be seeing evidence of a more sustained recovery.

''Is now the time therefore to take a fresh look at that key component to future business success - your employees?’’ she asks. ''They may have seen pay and benefits cut through the recession but with limited alternative employment have remained loyal or been less inclined to move company. As job prospects improve and mobility opportunities increase, will your key staff find more attractive opportunities elsewhere - just when you need them most?’’

Thomson points out that as employers start to review their reward structures, for the first time in history, today's workplace now contains up to five different generations working alongside each other, with Maturists (born pre-1945), Baby Boomers (born between 1945-1960), Generation X (1961-1980) and Generation Y (1981-1995) now beginning to be joined by Generation Z (born post-1995).

''The vast differences and expectations between each of these groups carry significant implications for HR professionals, especially when it comes to creating and tailoring employee benefits packages. For instance, how do you attract, engage, manage and retain talent across the generations through a benefits package when each has their distinct lifestyle, financial and career priorities and needs?’’

According to Thomson, the generational tension is accompanied by a realisation that a one-size-fits-all employee benefits package is no longer fit for purpose as a talent management tool. ''Our recent report entitled Talking about my Generation: Exploring the Benefits Engagement Challenge, found that the benefits packages currently on offer to employees have been designed almost exclusively by the Baby Boomer generation - many of whom are soon to retire and who make up just 30% of the workforce.’’

As a result, she says, nearly nine out of 10 (87%) employees from Generation X and Generation Y are being left dissatisfied by their employers' benefits offerings, believing they’re not sufficiently flexible to meet their financial and personal needs. The report- based on quantitative and qualitative research among over 1,200 UK employees - found significant shortcomings in how the priorities, needs and desires of the different generations are being met.

The benefits most commonly available to employees were found to be company pension schemes (available to 67% of respondents), on-going training and personal development (60%), holiday flexibility (52%) and flexibility around working hours (45%).

''However, a picture of what employees actually want revealed a disparity between expectation and reality, especially among the younger generations,’’ Thomson continues. ''Almost two-thirds (65%) of Generation Y employees said they would value financial education or guidance in the workplace (second only to pay and rewards), but 83% of employees surveyed confirmed this wasn’t available to them. At the same time, almost half (42%) of Generation Y employees said they would value help with a mortgage deposit and a quarter (25%) would value access to a personal banker through work, although this was available to just 4% of respondents.’’

It is clear, Thomson says, that this expectation gap is having an impact on organisations in hiring and keeping top talent: more than one in 10 Generation X and Generation Y employees (15% and 12% respectively) have considered moving to an employer offering better benefits packages in the past 12 months.

''Furthermore, there is evidence that benefits act as a driver for attracting talent, as 61% of all employees claim that the availability of a comprehensive benefits package is a key factor when looking for a new job. Of particular concern for employers and HR professionals who are not reviewing or adapting their benefits packages is the fact that recent statistics suggest 59% of workers are contemplating changing jobs or are in the process of submitting applications. These are the highest figures yet recorded.’’

As HR professionals are now coming under more pressure than ever before to boost employee engagement and retain top talent, providing a more generationally-appropriate benefits package, as well as finding the best ways to communicate with a multigenerational workforce, could play a very important part in this.

With every day that passes, and with Generation Z beginning to enter the workplace, the current situation is only set to deteriorate. ''As a high level of importance is being placed on employee benefits by the majority of job-seekers, companies who are willing to make their benefits packages more flexible and tailored to the needs of Generations X and Y will be best placed to attract the top talent,’’ says Thomson.

On the other side of the coin, with many of these individuals considering pastures new, companies that are sluggish in realising the need to adapt could face a talent exodus as their brightest young employees find work where they feel they are better rewarded. ''For HR professionals, focusing their benefits strategy to better meet the needs of the younger generations, and developing and promoting these future leaders, is now a crucial imperative.’’

Benefits and reward arrangements carry a cost but so does avoidable employee churn and a distrustful or unloved employee. ''Have you, or indeed should you, recognise the different demands and needs of the different generations within your employees - a challenge for 2014 perhaps!’’

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