More than half (55 per cent) of 18 to 34 year olds believe a good benefits package is the most important thing they look for when searching for a job, Zest’s new report, Responding to the cost of living crisis, has found.
In comparison, two in five (42 per cent) of the general workforce said employee benefits were a priority, according to the survey of 2,000 UK employees and 500 HR decision makers.
The research revealed a mismatch between the benefits offered and what workers wanted – private medical insurance was top of the list for employees, with 32 per cent saying they wanted it, but it was provided by just 26 per cent of businesses.
A quarter (25 per cent) of employees wanted their employer to contribute to their energy costs at home, a benefit that does not appear in the top five most offered by employers as listed by Zest’s report.
Also appearing in the top five were increased pension contributions (30 per cent), workplace saving schemes (21 per cent) and discounts on high street shops and brands (21 per cent).
Steve Herbert, HR commentator, told People Management: “While low pay is a problem for all ages, it is perhaps most felt by those at the start of their working careers, so it is no surprise that younger workers have been more appreciative of employee benefits that have provided practical – or even financial – support during the cost of living crisis.”
The report found that two thirds (67 per cent) of younger employees would move to another company if offered a better benefits package, compared to 37 per cent of those over 55.
“We know that the workforce of the future will be more diverse than it is today and so any organisation that wishes to future-proof its talent supply will be working to get under the surface of how best to enable employees to feel supported and thrive,” said Dan Lucy, director of HR research and consulting at the Institute for Employment Studies.
“It is important to remember, though, that this is not all about young people. One third of the workforce is over 50 and failing to consider this group would be a major risk for having the capability to deliver against business objectives.”
Emily Gillmore, consulting director at Gallagher, told People Management: “The workforce is as broad as it has ever been in terms of generational span and therefore ensuring that organisations do not approach benefits with a ‘one size fits all’ mentality is crucial.”
Gillmore said younger workers were looking for “relevant and personal” benefits, adding: “They want flexibility of choice and design and will be turned off by blanket policies designed to catch all.”
The research also found that 45 per cent of employees felt their benefits package was inadequate, while more than half (56 per cent) said they did not use their benefits because they were not relevant.
A further 65 per cent said they would use their benefits package more if it was tailored to their needs.
The report comes amid widespread talent shortages, with the report finding that 42 per cent of businesses were struggling to attract the right applicants.
However, despite the dissatisfaction of employees, half (48 per cent) of businesses said they had increased their investment in their benefits package in the past 12 months.
Fourteen per cent of 18 to 24 year olds said the benefits package offered by their employer provided a lifeline during the cost of living crisis.
“Companies need to ensure they are aligning benefits provision to employee needs, although this can be difficult to achieve for a diverse workforce with multifaceted challenges,” said Clare Dare, head of healthcare, risk and technology at PIB Employee Benefits.
“One solution is to invest in voluntary benefits that can sit alongside traditional core benefits such as life assurance and pension, as this then gives employees the ability to choose the benefits that most fit their needs while allowing employers to manage costs.”
She also recommended that employers provide both reactive and proactive support: “Reactive support could be a one-off payment or implementing a discounts portal, whereas proactive support focuses on financial education and money management.”
Matt Russell, CEO of Zest, said: “In order to boost engagement and deliver great value for money, employers need to ensure that the benefits on offer are relevant to their workforce, personalised to what they need and communicated clearly at the right time to those most likely to use a specific option.”
Herbert agreed that making employees aware of the benefits on offer to them was vital. He said: “Employers need to invest time and resources to promote and explain the workings of every aspect of the benefits package to ensure that such benefits are understood, used and appreciated.
“This simple measure can make a significant difference in both recruitment and retention, and this would represent a significant plus during an ongoing skills shortage in the UK.”