How employers can help Gen Z better understand and utilize their benefits

Young workers are still in the dark about their benefits and they need their company's to help in order to change that.

In the next 10 years Gen Z will account for roughly 60 million job seekers in the labor market, according to data from Concordia St. Paul University. If employers want to attract and retain that demographic, it’s in their best interest to help younger workers understand benefit offerings and find ways to bridge the literacy gap.

“We know benefits are complicated — that's across the board for all generations,” says Kim Buckey, vice president of client services at consulting company, DirectPath. “But [Gen Z] doesn’t have as much experience with the process of choosing benefits. They might even still be on their parents' plan.”

Read more: Millennial bosses are making things harder for Gen Z employees

Unlike their Millennial, Gen X and Baby Boomer counterparts — who’ve had decades to grapple with premiums, deductibles, copays and coinsurance — the next few years will be Gen Z’s first time being exposed to complicated terminology and concepts, according to Buckey. Working to explain even the basic concepts of healthcare coverage can go a long way.

“Providers tend to be very focused on their own services and they don’t really help on an individual level,” Buckey says. “They don't know your employer or your personal situation. [Employees] are looking to employers to provide some basic education and some one-on-one support.”

Not only do younger employees not fully understand the benefits at their disposal, but those they do understand aren’t cutting it — 60% of Gen Z workers are unsatisfied with their company’s current benefits and the majority ranked flexibility and annual bonuses higher than medical coverage and PTO, according to a survey conducted by business analytics company Alight Solutions.

“Gen Z is probably the most diverse cohort we've ever had racially, culturally and in sexual orientation,” Buckey says. “Employers need to recognize and respond to that [with their benefits offerings].”

Read more: If you want Gen Z, you’ll have to work for them

Whereas a baby boomer will typically be more focused on financial planning for retirement or life insurance benefits, a millennial with a family might be more focused on a health plan that would cover their children. Gen Z, however, is more likely to use offerings such as short term loans, mental health applications, daily pay features and fitness and weight management services.

The pandemic has caused Gen Z to be more pragmatic with their money. Since March 2020, workers under 25 have experienced furlough rates 73% higher than those aged 25 and older, and were terminated at rates 79% higher, according to data by resource management company Gusto.

“It's important for employers to explain the financial impact of Gen Z’s decisions,” Buckey says. “Choosing a medical plan based on what has the lowest premium is not always the best choice because it doesn't always translate to the least expensive plan over the course of the year.”

Read more: The pandemic is forcing Gen Z to rethink their future

The best solution to ensuring that young employees are made aware of what they have and what they need is to encourage the continuation of the benefit conversation well past employees’ enrollment date, Buckey says. And that might mean adopting new methods that appeal more to their demographic, like using social media or text messages to share important information.

“You really do want benefits communications to be a year-round process,” she says. “Provide something that catches attention, shows what the financial impact is and then directs the employee to where they can get more information if they want it.”