Future benefits planning must meet the needs of all generations

Predicting the future is virtually an impossible task. However, compensation and benefits professionals will be expected to do just that in order to help their organisations win the global battle for talent in the future. Gaining insight and understanding into demographic and social trends such as the ageing population, globalisation and advances in technology is key.

The mid-1990s saw a dramatic decline in birth rates which will result in the need for an extra 1.5m people by 2020 if the economy grows at the rate of 2% per annum, according to the City and Guilds report The Ageing Workforce. Some employers already depend on migrant workers to meet shortfalls in their workforce and are providing benefits designed to attract them, such as English language lessons. But, it will become harder to tap into this labour pool as the economies of immigrants’ countries of origin improve, and pay and benefits prompt these workers to consider repatriation.

A shortage of younger workers will mean that employers will also have to work harder to attract and retain the so-called tech-savvy, Generation Y, who have grown up working in the isolation of their bedrooms, producing films for youtube.com. This generation sees no need to travel to the office and expects to work flexible hours from home. It will also expect instant rewards, valuing cash above pension contributions – perhaps in the mistaken belief that their retirement will be as comfortable as for those who are in receipt of a final salary pension, or that the state will pick up the tab.

Thought will also have to be given to making the benefits packages and working environment more appealing to talented older workers, so they feel motivated enough to stay on. The recruitment of those who have retired or who have given up work to have children will also be key. Childcare and eldercare support, flexible working opportunities and training will play a part here.

The solution to the war for talent appears to be simple – a pay and benefits package that meets the needs of workers of all ages whatever their lifestyle. Putting this into practice, however, could prove more difficult.