Younger workers driving demand for greater benefit flexibility, challenging employer value propositions
Two-thirds of US workers (66%) report satisfaction with current health coverage available to them, yet concern about the future affordability of those benefits is rising dramatically. Only 41% see health care as affordable five years from now vs. 62% today according to Mercer’s latest data from the Inside Employees’ Minds™ Survey, conducted among more than 3,000 US workers representing a cross-section of the overall national workforce.
The new survey from Mercer, a global consulting leader in advancing health, wealth and careers, and a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), also shows strong satisfaction with retirement benefits (60%) – which ranks second to pay in importance to employees. But notable is employees’ rising concern about the cost of health care in retirement; 32% today — up from 24% five years ago — say saving for health care expenses in retirement is a top priority.
“Employees of all types continue to value benefits, with 9 in 10 saying they are just as important as getting paid,” said Gillian Printon, senior partner in Mercer’s Health & Benefits business. “This is remarkable despite a marked shift toward greater cost sharing with employees and a perception that benefits are less robust today than in the past. Combined with younger generations seeking more flexible offerings, this study suggests we have an increasingly benefit-savvy working population that is accepting shared accountability but with grave concerns over affordability in just a few short years.”
While base pay is the most highly valued reward element by workers of all ages (see Figure 1), only 55% say they are satisfied with it — a figure that remains steady from prior years. Also remaining steady are low marks on pay for performance measures including a sense of meritocracy (see Figure 2). Bonus/incentive pay ranks fourth in importance overall, but it is only deemed as satisfactory to 42% of workers.
Younger workers value flexibility, advancement
Workers ages 34 and younger are demanding more flexibility in the benefits delivered by employers, with 70% of that group saying they would like to reduce the value of some benefits while increasing the value of others (see Figure 3.) They also rank retirement benefits ahead of low health care costs, but place career opportunities as second in importance behind base pay, compared to eighth in importance for the overall workforce. Younger workers also are more satisfied (53%) with their career opportunities compared to the overall workforce (45%).
“The multi-generational workforce of today is forcing employers to carefully assess the health, wealth and career elements that make up their overall rewards strategy,” said Ilene Siscovick, partner in Mercer’s Talent business. “With 63% of all employees saying benefits are a major factor in choosing to work where they do, employers need to rethink and reshape their value propositions in a way that reflects the evolving workforce composition.”
To learn more about Mercer’s Inside Employees’ Minds research, please click here.
Mercer is a global consulting leader in talent, health, retirement and investments. Mercer helps clients around the world advance the health, wealth and careers of their most vital asset – their people. Mercer’s more than 20,000 employees are based in 43 countries and the firm operates in over 140 countries. Mercer is a wholly owned subsidiary of Marsh & McLennan Companies (NYSE: MMC), a global professional services firm offering clients advice and solutions in the areas of risk, strategy and people. With 57,000 employees worldwide and annual revenue exceeding $13 billion, Marsh & McLennan Companies is also the parent company of Marsh, a leader in insurance broking and risk management; Guy Carpenter, a leader in providing risk and reinsurance intermediary services; and Oliver Wyman, a leader in management consulting. For more information, visit www.mercer.com. Follow Mercer on Twitter @Mercer.
Figure 1 – Who Values What: Most Valued Elements of the Employment ‘Deal’ – By Age
Source: Mercer’s Inside Employees’ Minds Survey™2015
Figure 2: Steady but Low Marks on Pay and Performance
Source: Mercer’s Inside Employees’ Minds Survey™ 2011 and 2015
Figure 3: Fans of Flexibility
Source: Mercer’s 2015 Inside Employees’ Minds Survey™