Technology Team Newsletter: Employee Benefits in a Multigenerational WorkplaceAugust 12, 2010
In recent years, there have been many research studies concerning the inherent challenges of managing a multigenerational workplace. A common conclusion in these studies is that it is important for companies in all industries to understand the psychology of its employees from each generation in order to effectively attract, motivate, and retain these individuals to work together, share and transfer knowledge, and stay engaged and productive in the workplace. Whether your technology company employs members spanning four generations, or even just two generations, this article suggests employee benefits that should be considered to best align your company's productivity goals with the needs and attitudes of its multigenerational workers.
Understanding your employees' frame of reference is a first step in recognizing their needs and what will attract, motivate, and retain them to work for your enterprise. There are currently four generations in the workforce (and various combinations of these generations employed by a particular employer):
- The Traditionalists (born 1927-1947), who came of age during the era of the Great Depression and World War II, tend to follow the chain of command and respect authority. This group is industrious and knows how to make due.
- The Baby Boomers (born 1947-1965) grew up in a time of more liberalism and experimentation, social activism, and self-determination. This group is known for a strong work ethic and success-oriented goals; work/life balance was not necessarily desired or even possible for Baby Boomers.
- The Generation X-ers (born 1965-1981) were raised during a time of changing traditional values and often in single parent homes or homes with two working parents. Frequently left to their own devices and known as the "latch-key kids," Gen X-ers are fiercely independent, entrepreneurial, and value efficiency in the workplace and a work-life balance. This group includes the future leaders of most organizations.
- The Generation Y-ers or "Millenials" (born 1981-1999) have been characterized as a group who has grown in a time of fast-paced changes in the world and technology. This generation is accustomed to receiving feedback (often from "helicopter parents"), desires mentoring, has the highest preference for using technology in the workplace to complete tasks and communicate (including skyping, texting, and working remotely), and tends to have an aversion to in-person meetings and office face-time.
Given the varied times and perspectives among these generations, it is no surprise that the dynamic in the workplace is changing. Multigenerational workers bring different life experiences and frames of reference to the workplace that influence how they perceive management and authority, their approach to their job, and their own tenure with an employer. Yet, despite their differences, most workers join an organization, and stay with an employer, for the same reasons regardless of their age: challenge/interest level of work, compensation, and benefits.
In order to successfully grow a technology company today and stay competitive, it is important that, after evaluating the make-up of your workforce, you consider the types of employee benefit programs within your budget that could be the most relevant and valuable to your employees. Benefits that appeal to a multigenerational workforce include:
1. Retirement Plans
As a result, the 401(k) plan remains a highly popular retirement savings offering for most companies and a valued benefit by their employees. This plan allows for pre-tax deferrals of compensation and portability of accounts to a new employer's qualified plan or an IRA. Popular trends in this area include automatic enrollment, provision of investment advice and education, and annuity distribution options, as well as employer-provided access to retirement planning or financial planning services (which are desired by workers in all generations). In addition, the government is continuing to work on legislation that may mandate automatic payroll deduction IRAs, which may, at the very least, require employers that do not sponsor 401k plans to make their payroll system an available conduit for their employees to save their own pay.
2. Health Plans
American workers have grown accustomed to obtaining health and welfare benefits at work, such as medical, dental, and vision coverage. With health reform legislation, however, many companies are evaluating their options to determine whether they wish to continue to provide group health plans and the downside of not doing so. With the majority of Americans mandated to have health coverage under the new law, the employer-provided health plan remains an attractive option. In addition, expansion of wellness programs may be desirable under the new legislation and promotion of a wellness culture at work can help improve productivity and the long-term health of workers. Cafeteria plans and reimbursement accounts are also attractive ways for employees to pay for certain benefits on a pre-tax basis. Employers need to evaluate their current programs (including any retiree plans) and overall future compliance obligations under the new law.
Various types of insurance programs appeal to multigenerational workers. While employers have traditionally provided access to group life insurance and disability benefits, employees today desire many different types of assistance, including access to auto and home policies, pet insurance, and the ever-growing area of long-term care insurance (which is becoming critical to pay for nursing home care, which could otherwise devour retirement savings). As our lives become more complicated, today's workers value the assistance their employer can provide in helping to streamline access to a wide array of insurance programs and discount rates.
Incentive compensation can be designed in several ways, including as annual or long-term performance-based bonuses or as various types of equity awards. When designing incentives for a multigenerational workforce, keep in mind that your Gen-X and Gen-Y workers may be more incentivized by the realization of awards in the short term (i.e., annual bonus programs) as opposed to long-term periods spanning three to five years.
5. On-Ramp and Off-Ramp Programs
Child care and elder care are often heavy burdens for working Americans, especially for those who are simultaneously juggling both types of care while still working. Programs that are designed to allow employees to take necessary leaves and then transition back into the workplace through an On-Ramp Program are becoming increasingly more necessary. Similarly, for Traditionalists and Baby Boomers who simply want to transition into retirement slowly, an Off-Ramp Program may provide a smoother transition for the employee as well as the employer. Such programs may aid a company's efforts in transferring skills and knowledge between the generations by allowing these workers to design alternative work arrangements that benefit both the employer and employee.
Consider offering other employee benefits that are creative and designed to meet your corporate culture, such as tuition assistance, access to mortgage services, adoption assistance, training/mentoring programs, on-site day care, college savings programs, and technology allowances.
It is not easy to manage and balance the needs of multigenerational workers. However, thoughtful planning will enable any company to motivate and reward its diverse workforce with valuable benefits that will keep the workers happy and the company's productivity goals on target.
MICHELLE CAPEZZA is a Member of the Firm in the New York Office, where she practices in the area of Employee Benefits and Executive Compensation. As a member of the Technology Team, she counsels both public and private technology-based companies on a variety of benefits and compensation matters. If you have any questions regarding the issues discussed in this article, or would like to discuss other benefits-related issues, please contact Michelle at [email protected] or call her direct dial number: 212-351-4774.
News from the Technology Team
On August 24, 2010, Michelle Capezza will commence the Fall Term as an adjunct faculty member of Seton Hall University School of Law, where she will teach a course entitled "Corporate Transactional Skills."
What is the Technology Team?
The Technology Team is a multidisciplinary team of lawyers at Epstein, Becker & Green, P.C., who have dedicated themselves to serving the needs of technology companies—public and private, large and small. The Technology Team's members all have extensive experience representing technology companies—such as software companies, electronic device manufacturers, medical device producers, and wireless telecommunications companies—and bring their diverse skills and collective understanding of the needs of technology companies to the task of helping these clients solve a variety of matters and problems.
Working in a coordinated manner, the Technology Team is able to efficiently provide comprehensive legal services, across a broad spectrum of matters, including entity formation, securities, debt financing, acquisitions/divestitures, regulatory issues, employee benefits and executive compensation, labor and employment law, intellectual property, and commercial litigation. And because the members work as a team, they can tailor the type and level of legal services to the particular needs of the client in a cost- efficient manner.
Located in various offices across the Firm, the Technology Team's members can address their clients' needs across the country, whether the matter involves litigation or simply the need to understand how businesses operate in different locations. Team members routinely collaborate with each other and with other attorneys inside and outside the Firm, when necessary, in order to provide clients with effective and efficient legal services.