- Key insight: Discover how flexible benefit allocation boosts usage, satisfaction and employee loyalty.
- What's at stake: Rigid benefits risk lower engagement and higher turnover among younger cohorts.
- Supporting data: 61% of Gen Z and 57% of millennials favor flexible benefits.
- Source: Bullets generated by AI with editorial review
The benefits your company offers may be great, but are they actually what employees want?
Over half of employees — especially millennials and Gen Z — want more say over where their benefit dollars go, according to a
"It ties into the concept of how important personalization is in the benefit space," says Laine Thomas Conway, Alight's VP of delivery enablement and engagement. "Employees want to be able to direct those [benefit dollars] to healthcare savings, wellness programs, lifestyle perks — not just the major benefit programs."
The study's data gives
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Crafting an a la carte approach
Along with higher interest among younger employees (61% of Gen Z and 57% of millennials compared to 43% of Gen X and 38% of baby boomers), the study showed that men were more likely to be open to flexible benefits, as were respondents with an income over $65,000 and those who felt they had a good understanding of their offerings. Thomas Conway notes that benefit leaders can factor in this demographic data and gather employee feedback to gauge whether a transition to this setup would be well received.
Communication and guidance are also key to making this type of benefits approach work, explains Thomas Conway. Notably, around half of employee respondents who said they would like more control also wanted help from their employers when it came to selecting offerings, but many find their current volume of benefits and HR messaging overwhelming. Adopting more tailored and efficient communication tactics, such as AI-generated suggestions and reminders aimed at specific demographics, combined with human support for more detailed information, are good ways to help people make smart choices.
"If you're going to pursue this, one, you have to have a workforce that is a good fit," Thomas Conways says. "Two, you have to make sure there's a really good benefits understanding, because otherwise you're probably not going to have the desired impact for yourself or for your people. And then three, it doesn't mean you're off the hook for providing them guidance, support and tools."
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An evolution in employee experience
As employees look for increased support from their employer, benefits are a top way to deliver. Having more say into how benefit dollars are allocated means employees can select offerings that assist them in areas that matter most, whether that's physical or mental health, financial wellness, or other areas, says Thomas Conway.
"That personalization is the evolution of looking beyond, do you simply have a spouse and kids, to saying, 'What's important to you?'" she says. "Well-being is such a personal thing: For example, maybe now you're a 28-year-old, and then in three years, you might be married and getting ready to have kids. That allowance would be used very differently than as a single person with independence."
Adopting a more personalized approach to benefits allows employers to demonstrate that they acknowledge the diverse needs of their workforce and respond in an impactful way, thus driving loyalty, satisfaction and retention, Thomas Conway says.
"We want to meet employees where you are and help them in the moments that matter most," she says. "This type of benefits program really brings that to life."
