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June 27, 2023

What Gen Z Wants from Employee Benefits

Gen Z is the generation succeeding Millennials. According to McKinsey & Company, Gen Zers (also called Zoomers) have been shaped by COVID-19, a shifting financial landscape, climate anxiety, and digital tools. If companies want to attract Gen Z workers, they need to offer the employee benefits that appeal to this generation.

Health Insurance

Pew Research Center says Zoomers were born between 1997 and 2012. In 2023, the oldest Gen Zers are 25. Under the ACA, young adults can stay on their parents’ coverage until age 26. This means many Zoomers are likely still on their parents’ plans, but some are about to age out. When this happens, they’ll be looking for coverage of their own. In addition, some Zoomers may not have coverage through their parents and may already need their own health plans.

Since Zoomers are young and often don’t have children yet, many of them are looking for affordable plans with low premiums. Benefits Pro points out that it’s also crucial to educate Zoomers on their plans. For example, they may not know how to access preventative care without incurring out-of-pocket costs. Employers should give Zoomers the information they need to make the most of their coverage.

Mental Healthcare

Gen Zers have been vocal about their mental health needs. According to the American Psychological Association (APA), 91% of Gen Z adults report experiencing at least one physical or emotional symptom caused by stress. An APA Stress in America survey found that Zoomers are more likely to report poor mental health and to seek treatment compared to older generations.

Harvard Business Review says 81% of Zoomers have left jobs for mental health reasons. SHRM found that 61% of Zoomers would strongly consider leaving their current job if a new job offered significantly better health benefits. If employers want to appeal to Gen Z talent, they need to create an employee benefits package that supports mental health.

Telehealth Options

Gen Zers have grown up surrounded by digital options. They buy groceries, socialize, and even access healthcare online.

A report from the Healthcare Information and Management Systems Society found that more than 70% of Generation Z, Millennials, and Generation X prefer telehealth because it’s convenient. Furthermore, after telehealth usage surged during the COVID-19 pandemic, 44% of Millennials and Gen Zers don’t want to return to in-person care.

Financial Support

Zoomers are just starting their careers, and many are managing their finances for the first time. They may need financial wellness benefits to help them master basics like creating and sticking to a budget.

Student loans are a major concern. According to Bankrate, the average Gen Zer has $15,000 in student loan debt, as of March 2022. Since student loan repayments are set to resume in 2023, paying off debt will be a priority for many young workers.

Retirement is far away for Gen Zers, but this doesn’t mean it’s not a concern. This generation has already experienced financial setbacks. As many of them have parents who are struggling to afford retirement, they’re aware of the importance of saving for retirement. According to BlackRock, Gen Zers are saving an average of 14% of their income for retirement.

Voluntary Benefits

Voluntary benefits are a great way to let employees of different generations customize their employee benefits package to meet their needs. Workers can pick the benefits they want and decline those they don’t need. Payroll deductions can cover the premiums.

Gen Zers may be interested in a lot of the same benefits as their older coworkers, including dental, vision, life, disability, and critical illness insurance.

They may also want benefits that have not traditionally been part of a standard employee benefits package, such as pet insurance. Many Gen Zers own pets – and they tend to make their pets a priority. For example, Zillow found that Gen Z pet owners would prioritize pets over partners and kids if buying a home. Given how important pets are to this generation, it makes sense they’re concerned about veterinary care. According to Synchrony, 87% of Gen Z pet parents experience anxiety about pet care costs and younger pet owners are more interested in pet insurance than older generations.

Does Your Employee Benefits Package Appeal to Gen Zers?

If you haven’t updated your employee benefits to meet the needs of younger workers, you might have a hard time attracting Gen Z workers. Heffernan can help you put together a benefits package that meets the needs of all your employees. Learn more.

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