Take-up of perks offered through flexible benefits schemes remains low among younger workers, forcing employers to consider the lifestyle needs of Generation Y, according to research published by consultancy Mercer.
Employees in their twenties are much less likely to participate in a flexible benefits scheme compared to older colleagues. The participation rate for this age group is on average 47% compared to older groups (staff aged in their thirties to fifties) where the rate varies between 67% and 70%. This is primarily because the main focus of many products included in flex schemes is on risk-based or lifestyle benefits, which are more relevant to the needs of employees with dependants.
Mercer’s analysis shows that take-up for partner life assurance is just 5% for employees in their twenties, but this rises to 15% for people aged in their 30s. Critical illness insurance similarly rises from 13% to 22% respectively and personal accident insurance from 12% to 17%.
Tony Morgan, a principal at Mercer, said: “Employers need to think more about the needs of generation Y in making benefit provision for their employees. Considering their lifestyle needs, more should be done to support them in meeting the financial burdens they face, in particular, the need to pay off student loans and secure their first homes.”
He added that green benefits are an area for continuing development in response to the new generation’s environmental awareness and conscience.
The survey, which was based on the benefit selections made by over 66,000 employees in 20 organisations representing a range of sectors and locations, showed the main differences in take-up were according to age and income; differences based on gender were less pronounced.
However, there was a significant difference between men and women when it comes to the popularity of buying and selling holiday. 19% of women purchase extra days’ holiday and this is the most popular benefit to be traded up by this group. By contrast, this benefit is less popular with men (11%). Men are also more likely to sell their holidays (9% compared to 3% of women).