Meeting the needs of the Millennial and Gen Z workforce, combined with addressing current social challenges facing many of these employees, were overarching considerations I chose in ranking discretionary benefits. Employers benefit by this approach through attracting and retaining a talented pool of current and future employees.
Below is a chart showing the ranking of discretionary benefits from most likely to least likely to eliminate. Note that health insurance is not part of this discussion. With the passage of the PPAC Act in 2010, health insurance is a legally required benefit
The four least likely discretionary benefits to eliminate serve the following purpose. First, Paid Time Off. A specific recommendation would be to implement an Unlimited Time Off policy. This would allow greater flexibility for employees to manager their workload versus their time at work, while providing a cost savings to the employer by eliminating the liability in funding PTO accrual accounts and pay-out of unused time when employees depart the company. Investing in Retirement Programs will be continue to be important to the Millennial and Gen Z workforce. Current projections are that Social Security benefits will be fully funded until 2037. After that point, continuing taxes are expected to pay only 76% of scheduled benefits. ( ssa.gov). At that time the oldest Gen Z employees will be only 51 years old. Thus the importance for employers to invest in Retirement Programs to attract the most talented employees. The next two important discretionary benefits to maintain, Family Assistance Programs and Flexible Scheduling, help to address the specific needs of Millennial households, which often times are dual income households. Despite the increased income of dual income Millennial households (Elkins, CNBC, Jan 2019), according the recent GAO reports (gao.gov, Dec 2019) Millennial households have significantly more debt and lower median and average net worth than Generation X households at similar ages. Employers will need to provide these benefits to encourage dual income Millennial household employees to remain in the workforce, or run the risk of not having a large and diverse talent pool to draw from.
Potential behavioral changes that may be required by employees through eliminating or reducing some employer funded discretionary benefits would be the need to purchase life insurance and/or disability insurance on the open market.
