Benefits packages currently on offer to employees are not fit for purpose and are missing the mark in particular for younger workers, latest research shows.
The report from Barclays Corporate & Employer Solutions - Talking About My Generation: Exploring the Benefits Engagement Challenge, authored by Liverpool University director of employability and educational opportunities Paul Redmond - finds there are now up to five different generations in the workplace and considers how relevant current benefits packages are to younger employees in today's multigenerational workforce.
However it says employee benefits have been designed almost exclusively by the Baby Boomer generation - many of whom are soon to retire and who make up just 30% of the workforce - and finds that nearly nine out of 10 (87%) employees from the younger Generation X and Generation Y are left dissatisfied by their employers' benefits offerings, believing that they are not sufficiently flexible to meet their financial and personal needs.
Presenting at the Pension and Benefits Show in June, Barclays revealed it was introducing a benefits proposition targeting and supporting the range of generations in work.
The report reveals "significant" shortcomings in how the priorities, needs and desires of employees from different generations are being addressed by employers.
It says company pension schemes (available to 67% of respondents), on-going training and personal development (60%), holiday flexibility (52%) and flexibility around working hours (45%) are among the most commonly available benefits to employees.
But a snapshot of what employees want revealed a disparity between expectation and reality - especially among the younger generations.
Almost two-thirds (65%) of Generation Y employees said that they would value financial education or guidance in the workplace, but 83% of all employees surveyed confirmed that this was not available to them.
At the same time, almost half (42%) of Generation Y employees said that they would value help with a mortgage deposit and a quarter (25%) would value access to a personal banker through work, although this was available to just 4% of all respondents.
Redmond explains: "The existence of a multi-generational workforce has significant implications for today's employers. From our research and focus groups we discovered hugely different lifestyle priorities and financial concerns among these different generational groups as well as different requirements when it comes to benefits.
"We found that there is great demand among all generational groups for flexibility and tailoring of packages but significantly, the research highlighted the fact that traditional benefits packages are not meeting the expectations and lifestyle needs of the younger generations in particular."
He adds: "The result is a growing gulf in the traditional psychological contract - the unspoken relationship between employers and employees - which is having a profound effect on today's workplace."
The report also shows that more than one in 10 Generation X and Generation Y employees (15% and 12% respectively) have considered moving to an employer offering better benefits packages in the last 12 months.
Furthermore, the report finds evidence that benefits act as a driver for attracting talent, as 61% of all employees claim that the availability of a comprehensive benefits package is a key factor when looking for a new job.
Of particular concern for employers who are not reviewing or adapting their benefits packages is the fact that current statistics suggest that 59% of workers are either contemplating changing jobs or are in the process of submitting applications - the highest figures yet recorded.
Barclays Corporate & Employer Solutions Katharine Photiou says she is concerned for employers who might be resistant to change.
She says: "Employers are faced with a situation in which they must adapt to survive. Most stark from the research is the fact that the expectations of the younger generations in today's workforce are not being met by the benefits currently on offer - an area of growing frustration for this group.
"With Generation Y employees having fewer financial commitments and being much more open to moving jobs than previous generations, employers should take note - they risk losing top talent as the best employees from younger generations look elsewhere for employers that better understand their lifestyle and benefit needs.
"With every day that passes, and with Generation Z beginning to enter the workplace, the situation is only set to deteriorate. For HR professionals, focusing their benefits strategy to better meet the needs of the younger generations while developing and promoting top talent - the future leaders and managers - must be a crucial imperative."
The report also includes a toolkit designed for HR professionals who are looking for ways to boost employee engagement by providing a more generationally-appropriate benefits package, as well as tips for how best to communicate with a multigenerational workforce.
