How to Avoid the Great Resignation of Gen Z Employees

A ManpowerGroup survey in 2020 indicated that Gen Z makes up 24% of the workforce[1], and according to a recent LinkedIn survey, nearly 65% of Gen Z job seekers have either switched industries or are considering to do so[2]. This daunting statistic tells us that employers not only need to retain tenured workers, but attract the younger quarter of the workforce as well. The question during this Great Resignation then becomes: What actions can employers take to evolve with the changing demographics of the workforce, and appeal to a younger employee population?

Some employer considerations have included flexible work schedules, the option of a hybrid working environment and pay increases. Yet, there is another section of a job listing that catches the eyes of Gen Z applicants that an employer can control: employee benefits.

Benefit Needs of Gen Z Workers

Employee Education
Members of the workforce born in 1997 and after have most likely relied on their parents’ employee benefit plans their entire lives. Therefore, employers must prioritize the education and communication of how their benefit offerings work to their younger workers. This includes a discussion of health insurance concepts like deductibles, copays, coinsurance and premiums as well as basic elements of defined contribution plans such as contributions, matching, and investments. Outside of open enrollment meetings, employers need to find ways to answer the questions and meet the needs of a very curious generation of employees in hybrid work settings.

Technology
Gen Z workers are the first class of talent entering the workforce that has spent the majority of their lives with access to smartphones, laptops and social media. If employers have the ability to provide mobile apps and online portals that are tied to benefits, younger employees will find these benefits more useful and attractive. Having the ability to monitor and materialize one’s employee benefits through technology will encourage the younger portion of the workforce to enroll, participate and appreciate an employer’s benefit offerings. Other ways to incorporate technology to increase awareness of benefits include recorded employee education webinars and the ability to virtually meet a benefits professional such as a financial planner.

Financial Wellness
In a 2021 annual survey of 401(k) participants conducted by Schwab, 44% of Gen Z workers claimed that financial stress impacted their workplace performance[3]. Providing a financial wellness benefit that bridges the gap between a rising young employee population and their financial goals such as retirement, savings and more is crucial for employers during the Great Resignation to differentiate themselves and improve their benefit offerings. Financial wellness benefits should incorporate communication, technology and personalization for employees to understand their specific financial situations and be confident in hitting their goals. In a world where social security confidence is low and plan sponsors are putting the responsibility on participants to control their own retirement outcomes, young employees need to be aware of the importance of saving early with professional guidance. 

Lifestyle Spending Accounts (LSAs)
A grave concern of Gen Z workers is being able to pay off student loans and current tuition costs from graduate programs while working. Employers are getting around to utilizing spending accounts such as FSAs, HSAs, and HRAs that have pre-tax advantages outlined by the IRS to offset healthcare costs for employees. However, Lifestyle Spending Accounts allow for employers to put money aside for employees on a post-tax basis. This employee benefit allows for vast flexibility and creativity for employers to reward workers for encouraging wellness and healthy behaviors. LSAs can be used for fitness costs, financial wellness, tuition costs and more. LSAs can be a great way for an employer to help Gen Z pay for tuition and other things that matter most to them, which is a priority when searching for a job.

An employer can get creative and unique with their benefits package to avoid the effects of the Great Resignation that the workforce is facing right now. If you would like to learn more about how Sentinel Group is partnering with employers to implement these strategies and more, Contact us.