2 strategies that help Gen Z understand their benefits better

Gen Z may be the most tech-savvy generation in the workforce, but when it comes to understanding their benefits, many are still lost in translation.

Thirty-percent of Gen Z employees don't enroll in employee-paid benefits because they don't understand them, according to research from financial investment management and insurance company Principal Financial Group. Another 50% admit they use social media like TikTok and Instagram to learn about benefits — bypassing their HR and benefit leaders entirely. 

"For quite some time, there's been conversation anticipating what the impact of having five generations in the workforce will look like, and we're now seeing it come to fruition," says Kara Hoogensen, SVP and head of workplace benefits at Principal Financial Group. "Gen Z's perspective is shaped by their experiences; they're the first digitally-native generation, and it has impacted how they view and learn about benefits."

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But young employees need and want more than social media for guidance. In fact, 83% desire extensive enrollment information, which can help them better understand options and overcome perceived obstacles. For example, financial factors such as inflation and student loan payments may keep Gen Z from enrolling in benefits like healthcare and retirement, but benefit leaders can work with them to find options within their budget, Hoogensen says. 

"Benefit leaders have a critical role in facilitating access to information so they can make informed choices," Hoogensen says. "They have a responsibility to further tactics or considerations around the timing of benefit information or how and when it's provided."

Investing in a digital-first strategy

Traditional enrollment education, which has often been limited to long guide books and quick overviews, won't work on younger talent. To truly reach that demographic, organizations will have to invest in technology for a new approach. For example, 85% of Gen Z workers value peer-based recommendations, according to the survey's findings. Younger employees also want continuous, year-round learning experiences  as opposed to a single educational resource right before enrollment. Digital tools that provide real-world insights as well as up-to-date information employees can access at any time from smart devices could boost engagement and utilization. 

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"Gen Z is already very comfortable with more progressive concepts like mobile enrollment,"  Hoogensen says. "Combining that with a continuous, transparent and personalized communication approach throughout the year will ensure that Gen Z are reminded of the benefits available to them and how to access them." 

Incentivizing young talent with benefits that matter

Newer generations also have different benefit needs, and catering to these could vastly improve employees' willingness to learn about and access them, Hoogensen says. Mental health and financial wellness, for instance, have proven to be big priorities for Gen Z. By adding more comprehensive benefits to the areas employees are most interested in, young employees are more likely to get involved with connected offerings. 

"Making sure there are avenues for Gen Z to access mental health resources is important," says Hoogensen. "Having something like an EAP focused on mental health offered alongside group life insurance or group short-term or long-term disability insurance could be particularly meaningful." 

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While there are significant drawbacks to employees relying on social media platforms to inform themselves about their health plans and benefit packages, such as misinformation and further confusion, it can work in leaders' favor if they're proactive, Hoogensen says.

"Platforms like Tiktok and Instagram are ultimately getting information in the hands of people that need it," she says. "That means there's more opportunity for leaders to start conversations in the workplace and make a difference."