From medical journals to anthologies of poetry, much has been written about the unique struggles people face at each stage of life. An employee who’s an empty nester has a life and concerns that look very different from their colleague who’s in the throes of raising young children. Both employees are valuable, both expect to be supported by their employer, and each has a different idea of what that support should look like.

There are currently four generations in the workforce: Boomers, Gen X, Millennials, and Gen Z. Each generation has challenges unique to their stage of life and the market forces that were at play while they were achieving higher education, entering the working world, raising their children, taking care of their aging parents, and planning for retirement. Each generation also has a different relationship to work and the level of support they expect from their employers.

In this post, we’ll draw from recent research to cover what the four generations want, why they want it, and how they interact with the healthcare system, so that employers can meet these expectations with impactful benefits.

The four generations in the workforce

Marketers are constantly referencing the different generations but rarely does anyone define who belongs to these groups. Here are the age parameters for each generation:

• Boomers: Employees born between the years of 1946 and 1964 are considered Boomers. They make up approximately 15% of the workforce. 

• Gen X: Employees born between 1965 and 1980 are considered Gen X. They make up 31% of the workforce. 

• Millennials: Employees born between 1981 and 1996 are considered Millennials. They make up the largest share of the workforce at 36%.

• Gen Z: Employees born between 1997 and 2012 are considered Gen Z. They make up 18% of the workforce.

What do the different generations want and why?

To understand what the different generations want and why they want it, you have to first understand the cultural and market forces that were at play when they “came of age”. For example, it was relatively affordable for both Boomers and Gen X’ers to go to college. But Millennials and Gen Z experienced much higher tuition costs and fiercer competition to get into schools. A similar contrast, Boomers didn’t experience the same challenges when it came to childcare that Gen X’ers and Millennials now face.

The challenges workers face have changed. Employers need to meet those changes with tangible solutions that meet employees where they are and address their diverse needs. 

What boomers want and why they want it

Boomers want stability. In a sense, they’ve always wanted stability. Boomers stay at a job for an average of 8 years and 3 months. They are motivated by the position and prestige they’ve worked toward, loyalty to the company, and a sense of duty. They believe achievement comes after paying one's dues. As this generation approaches retirement, they are seeking stability more than ever.

From their employer, Boomers want help achieving as much financial stability as possible before they retire. They want multiple ways to save, they want help in that saving, and they want job security.

From their benefits, Boomers want simple plans that are easy to understand. They want to know what their expenses are going to be, and they want an expansion of menopause care and preventative screenings that will contribute to more positive health outcomes later.

What Gen X’ers want and why they want it

Above-all Gen X’ers want balance. They are in the throes of raising families and caring for aging parents while trying to maximize their most lucrative working years. When they entered the workforce, they were the most educated generation, and they have seen technology create and kill jobs in rapid succession. This has led them to be resourceful employees as well as adept at reinvention. Gen X’ers stay at a company for 5 years and 2 months on average.

From their employer, Gen X’ers value the freedom to manage their multiple roles. They are motivated by pursuing their personal and professional interests over company interests and diversity in the workplace, and they are quick to leave if their needs are unmet. 

From their benefits, Gen X’ers want help with their caregiving duties and expenses. They want comprehensive medical insurance and retirement benefits. They want help achieving financial stability and planning for the future.

What Millennials want and why they want it

Millennials also crave work-life balance. They have young children, some are starting to take on caretaking responsibilities of aging parents, and they are trying to develop their careers. They were just entering the workforce during the Great Recession and had a front-row seat to technological advancements inventing new jobs. They were also the first generation for whom going to college did not guarantee a good job and the ability to purchase a house. In fact, going to college likely set them back financially due to high student loan debt and borrowing costs. Not surprising, this generation reports high levels of anxiety and burnout.

Millennials stay at a job for an average 2 years and 9 months. From their employers, Millennials want flexibility, they want mentorship and career development, and unique work experiences. They favor diversity and inclusion in the workplace. They see student debt as an impediment to financial stability and they want their employers to lighten the load. They want employers to show they’re invested in their employees’ wellbeing through company policies and benefits. From their benefits, Millennials want mental health benefits, caregiving benefits, lower pharmaceutical costs and lower out-of-pocket costs. In fact, Millennials pay the highest out-of-pocket costs of any other generation.

What Gen Z’ers want and why they want it

The youngest generation in the workforce has lived through some of the most "disruptive" times since World War II. They’ve seen fast moving technological changes that have made previously safe jobs irrelevant. They’ve witnessed major social changes, a global pandemic, rapidly evolving climate chaos, and challenges to established institutions. 

It’s no wonder they are experiencing the highest levels of anxiety and work-related burnout of the generations, and they have the lowest trust of authority and the lowest levels of engagement in work. They also spend the shortest amount of time at any company (just over 2 years on average). What is perhaps counter-intuitive to this behavior is that Gen Z’ers are actually more risk averse than Gen X’ers or Millennials.

From employers, Gen Z’ers want transparency and stability. They want their personal wellbeing to not only be considered by their employer, but supported. They value independence, creativity, and diversity among their co-workers, and are anxious about the future. Of the generations, they expect the most support from their employers, especially in the form of mental health. 

From their benefits, Gen Z’ers want robust mental health benefits. In fact, providing these is proving essential to keeping this generation motivated and engaged. They also need help paying for high out-of-pocket healthcare costs and student loan debt.

How do the four generations utilize the healthcare system?

How the different generations utilize the healthcare system reflects where they are in life and the amount of financial resources they have. They will benefit from different levels of coverage and fringe benefits that can help alleviate some of the pain points they feel when accessing medical care. Statistics from a recent report provide helpful context as you consider how to meet employee needs.

• 1 in 3 employees struggle to afford their prescriptions. 

• 1 in 4 employees must dip into savings to cover the costs. 

• 38% of Americans have put off medical treatment at some point in the last 12 months due to cost.

How Boomers utilize the healthcare system

Boomers have the highest rates of having (and utilizing) primary care providers. They enjoy the lowest copays and have fewer unexpected medical visits, but medical costs represent  10.6% of their overall spend. If they don’t have access to low-cost preventative care, they may hold off on seeking care until they’re eligible for Medicare. This can lead to delayed diagnosis of issues and worse health outcomes (and more expensive medical treatment and higher costs for the whole healthcare system). 

How Gen X’ers utilize the healthcare system

Gen X’ers have a traditional approach to overall healthcare and are more willing to engage with a primary care provider than the younger generations. Twenty-three percent of Gen X members reported that they were willing to visit a retail clinic or utilize telehealth services. Approximately 6.7% of their income on health costs, but are experiencing worse health outcomes than Boomers were at their age including higher rates of morbidity due to mental health issues, substance abuse, and worsening mortality from heart disease. 

How Millennials utilize the healthcare system

Millennials are feeling the squeeze of high healthcare costs. They pay the highest out-of-pocket costs of any of the generations, they feel the high cost of prescriptions more acutely than any other generation and 74% have canceled healthcare appointments due to high costs (versus 13% of Boomers who did). Along with Gen Z, Millennials also have the highest rates of urgent care and ER visits and the lowest utilization of primary care. 

How Gen Z’ers utilize the healthcare system

Along with their Millennial counterparts, Gen Z’ers have the lowest rates of maintaining a primary care provider relationship and preventative care visits. They have the highest rates of urgent care and avoidable ER visits, and 56% report they have canceled healthcare appointments due to high costs. They also suffer from high prescription costs.

Which benefits can be most impactful for each generation?

For a benefit to be impactful it must meet a real employee need in a way that is easy for the employee to access. Companies might need to get creative in how they meet these needs and think critically about trends among their workforce and how to get in front of any issues they see before they worsen. 

The most impactful benefits for Boomers

Benefits that help set Boomers up for success in retirement are going to be the most impactful. These include:

• Retirement savings benefits. Employers can increase their contributions to employees’ accounts to help them feel more supported and improve their financial health heading into retirement.

• Expanded preventative care screenings. To ensure Boomer employees maintain their physical and mental health during their final working years and retirement, employers can offer health plans that include coverage for menopause and other preventative care screenings like bone density and diabetes screenings.

• Health Savings Accounts (HSAs). These accounts function as a traditional retirement account once the account holder turns 65 with the added benefit that distributions for healthcare costs remain tax-free. All other distributions are taxed at the appropriate tax rate. This provides Boomers with an additional retirement savings vehicle and a way to help keep health costs low when they’re on a fixed income. 

• Group Coverage Health Reimbursement Accounts (HRAs). These employer-funded accounts support employees’ out-of-pocket costs and provide an incentive for Boomer employees to seek the preventative care they need to enter retirement in good health. 

• Lifestyle Spending Accounts (LSAs). These post-tax, employer-funded accounts can be used to support financial wellness expenses like seeing a financial advisor. This can help ensure Boomers receive the appropriate advice they need to enter retirement in good financial health.

The most impactful benefits for Gen X’ers

Gen X is currently the “sandwich” generation (although many older Millennial employees are also experiencing this), and needs help juggling their responsibilities. They need mental health support and help managing substance abuse issues. Benefits that would be impactful for this generation include:

• Flexible work schedules. Allowing this generation to adjust their working hours to manage their family responsibilities will not only help employees to feel happier and healthier, it will lead to increased productivity because employees won’t spend working hours dealing with caretaking issues.

• Expanded mental health benefits and addiction support. This generation is experiencing high levels of substance abuse and lower mental health than Boomers did at the same age. Health insurance plans that enable Gen X employees to receive low-cost mental health and addiction support can help ensure they get the help they need to be productive workers and healthy members of their communities.

• Healthcare or General Purpose Flexible Spending Accounts (FSAs). These accounts allow employees to deposit pre-tax money to pay for everyday health expenses. This can help lower employees’ costs because they can save up to 37% (depending on their tax bracket) on expenses and it can help ensure they get the treatment they need because they have the money set aside for it.

• Dependent Care FSAs. These accounts allow employees to save pre-tax money to pay for child and adult day care expenses that allow the employee to work. Since the savings are pre-tax, it helps reduce the cost of necessary care, and this can lower financial strain and stress for this generation as well as help ensure that more employees stay in the workforce.

• HSAs. Like with FSAs, HSA contributions are also pre-tax but unlike FSAs, account balances roll over from year-to-year which allows employees to build up a healthcare safety net. Employees can also invest their contributions which allows them to build their savings faster. Employees can use their HSA contributions to pay for qualified medical expenses for themselves, their spouse, or any dependent, regardless of whether the other person is covered by the employee’s health plan. This can help ensure employees have a way to pay for their family’s health costs.

• Group Coverage HRAs. Since these accounts are employer-funded, they allow companies to provide direct financial support of employees’ out-of-pocket health costs. This can reduce employees’ financial strain and stress and ensure their families are getting the health treatment they need.

• Retirement savings accounts. Gen X is focused on the future and should be in the process of building their retirement nest egg. Employers can increase their match and contributions to employees’ accounts to help them feel more financially secure and supported.

• Commuter Benefits. Americans spend an average of 19% of their income on their commute to work. By offering a pre-tax commuter benefit account, employers can help their employees save up to 37% (depending on their tax bracket) on this expense. Employers can also offer an employer-funded, post-tax commuter benefit that reimburses for expenses like bike repair, taxi and rideshare services, gas, meals out, and more.

• LSAs. LSAs can be structured to support the types of expenses employers believe will be the most beneficial to their employee base. That could mean supporting employees’ hobbies, physical fitness, caregiving responsibilities, and more. By supporting employees’ lives outside of work, employers can help ensure they are making employees’ lives “net better”.

The most impactful benefits for Millennials

Millennials are suffering from high rates of anxiety, depression and burnout. They feel the financial squeeze of student loan debt and high costs everywhere including for healthcare. The most impactful benefits for Millennials will center around accessible and robust healthcare and lowering their financial burden. These are the most impactful benefits for Millennials:

• Flexible work schedules. Millennials want freedom and flexibility. Providing them with flexible work schedules gives them the freedom they need to attend to their personal lives as well as their professional one.

• Robust mental health benefits. These will help to support Millennial employees’ mental health so they can be productive workers and healthy members of their communities.

• High Deductible Health Plans (HDHPs). HDHPs have the lowest monthly premiums of the traditional health plans and can help lower the cost of accessing needed care for Millennials. HDHPs cover preventative care 100% before the deductible is met, which can help encourage Millennial employees to establish a relationship with a primary care provider and get regular checkups so they don’t end up with expensive urgent care or emergency room visits.

• HSAs. HSAs are paired with HDHPs and can help employees save money to cover their deductible and other out-of-pocket costs. By having the money saved (pre-tax), employees are more likely to seek medical care because they have a way to pay for it. HSAs can also be used to pay for prescriptions, the high cost of which affect Millennials acutely.

• Student loan repayment benefits. Millennials’ net worth is reported to be 20% lower than Gen X’ers and Boomers had at the same age, and student loan debt plays a big part in that. By offering student loan debt repayment benefits, employers can help lower employees’ financial stress and improve their overall wellness.

• Dependent Care FSAs. Child care costs are more expensive now than they were before the pandemic, at the same time, there are fewer child care resources available. Millennials are in the throes of raising young families and child care costs are a large source of financial stress. Dependent care FSAs give employees a much needed break on those costs.

• Retirement benefits. By offering retirement benefits and increasing employer matches and contributions, employers can help alleviate the financial stress Millennials feel about the future.

• Commuter benefits. Commuter benefits support employees’ financial wellness by lowering the cost they pay to commute either directly via employer-funded, post-tax account), or indirectly via pre-tax, employee-funded benefits.

• LSAs. LSAs that support employees’ mental health by reimbursing for hobbies, wellness retreats, and other personal costs can go a long way toward making Millennial employees feel taken care of.

The most impactful benefits for Gen Z

Gen Z’ers are experiencing the highest levels of anxiety and burnout of the generations and are primarily focused on mental health and overall wellness. Benefits that address these issues will be the most impactful for this generation of workers. Impactful benefits include:

• Health plans with robust mental health coverage. Coverage should include both clinical and non-clinical forms of therapy to support the care Gen Z’ers need and want.

• HDHPs. Since Gen Z’ers have low rates of primary care provider relationships and tend to seek care only when it’s dire (i.e. urgent care and preventable ER visits), a health plan that covers preventative care 100% before the deductible is met can encourage this generation to get regular checkups. 

• HSAs. By providing a way for employees to save for qualified medical expenses, and by depositing employer contributions, companies can further ensure their youngest employees remain healthy because they have access to money to pay for the care they need.

• Student loan repayment benefits. This is the generation that just left school and is likely to have the highest student debt balance. Student loan repayment benefits can help them feel less financially squeezed.

• LSAs. LSAs that support Gen Z’ers’ everyday expenses like gym memberships, wellness activities, personal growth classes, healthy food delivery, groceries, and more, can help Gen Z’ers manage their stress and burnout and make them feel supported.

Offer impactful, flexible benefits for all employees with Lively

Lively is your partner in crafting the most impactful benefits package for your unique demographic mix. We offer benefit bundles for easy and economical administration and customization so you can target your employees’ needs. If you’re ready to uplevel your benefits, reach out today.