How to tailor employee benefits across different generations – Part one

Organisations have experienced significant transformation in recent years, driven in part by the arrival of Gen Z in the workplace. Leaders and HR teams today are managing four distinct generations – each shaped by different world events, cultural shifts, and economic realities. As a result, their expectations of employers and employee benefits vary significantly.

In this article – the first of a two-part series – we’ll explore who these generations are, their core life experiences, and key influences, to help inform your benefits strategy and better attract, retain, and engage all types of talent. 

Understand all your employees

Many generalisations are made about different age groups. While some are accurate, many are stereotypes. To create a benefit package that reflects the needs of all talent, no matter their age or life experience, employers need to have a basic understanding of each generation and their different challenges.

Below is a summary of the different generations in today’s UK workforce, with data from Legal & General on the percentage of the working population each generation takes up:

Baby Boomers (1946–1964)

Percentage in workforce: About 15% (many retired, but some remain in part-time or advisory positions)
Formative experiences: Economic expansion, civil rights movements, cold war, swinging sixties
Aspirations: Job security, family unit
Tech approach: Adapted as early IT adopters
Career mindset: Career defined by employer
Communication style: Face-to-face, phone, comfortable with email

Generation X (1965–1980)

Percentage in workforce: 36%
Formative experiences: End of Cold War, Thatcherism, early mobile technology, rising levels of divorce
Aspirations: Work-life balance, financial independence
Tech approach: Digital immigrants
Career mindset: Loyal to profession, not as loyal to employer as previous generations
Communication style: Email, text, better adapted to hybrid working platforms

Millennials / Generation Y (1981–1996)

Percentage in workforce: 37%
Formative experiences: 9/11, rise of the internet, globalisation, 2008 financial crash
Aspirations: Flexibility, purpose-driven work, currently the primary generation starting young families
Tech approach: Digital natives
Career mindset: Project-based; value growth and culture, increased focus on working with organisations rather than for profit companies
Communication style: Online and mobile messaging

Generation Z (1997–2012)

Percentage in workforce: 12% (growing rapidly, likely already much higher than this)
Formative experiences: Climate crisis, COVID-19 pandemic, hybrid learning, AI revolution
Aspirations: Security, inclusion, personal growth, increased focus on employer morality e.g. sustainability
Tech approach: Tech-integrated lives, fluid with AI and automation
Career mindset: Purpose-led multitaskers; value autonomy, more fluid with career choices, far less loyalty to employers in comparison to traditional generations
Communication style: Video, messaging, platforms like Teams which assist hybrid working

What does this mean for HR?

The surging emergence of Gen Z in the workplace has made it clearer than ever that there is no one-size-fits-all solution to benefit offerings. Baby boomers and Gen X came from a more economically secure age, whereas Millennials and Gen Z have faced more economic turbulence, unaffordable housing, rising debt and have grown up in an interconnected, digital world. This has significantly reshaped younger generations’ perspectives on society – for example, influencing their views on the affordability of starting a family or increasing their awareness of issues like global warming. This has led to a greater diversity of what talent expects from employers, and traditional benefits alone are no longer enough.

Key considerations:

• Attraction: Gen Z and Millennials expect personalised career paths, clear social values, and flexible working environments. They’re more likely to evaluate benefits holistically, from mental health support to DEI initiatives, hybrid working and sustainability.
• Retention: Traditional benefits alone are no longer enough. Younger generations typically see two to four years at one organisation as normal. To retain top talent, your benefits need to stand out. To do this, personalisation is key, providing an array of benefits that resonate with each employee, supporting their financial stability, and in an ideal world, help them want to stay.
• Engagement: One of the most disengaged groups of employees are those who feel unheard. Cross-generational engagement strategies, including regular feedback, reduces this risk and promotes recognition. Gen Z especially values transparency and being part of the conversation.

Moving forward

In today’s competitive talent market, traditional benefits (often built by and for baby boomers) are seen as the bare minimum. Without significantly expanding your package, many risk disengaging talent and losing out to competitors with better offers.  To stand out, employers must design packages which are inclusive, flexible, and personalised. Rising living costs, environmental concerns, and the AI transformation are shaping the needs of younger workers, and employers must adapt with these changes.

So, what should a modern benefits strategy look like, and how can it give you a competitive advantage? We explore this in part two.