If you read nothing else, read this…
- Different generations value, and are motivated by, different rewards and benefits, at least in the non-core benefits space.
- There is a risk of over-generalising if employees are pigeon-holed into generational groups.
- Personalised rewards and flexible benefit schemes can help accommodate different needs.
According to the Hays UK salary & recruiting trends 2015 guide, career development is the most important factor for those in generation Y, who were born between 1980 and the mid-1990s, also known as millennials, when it comes to choosing a role (see box). But they’re also attracted by the idea of public recognition, says Sue Honore, associate research consultant at Ashridge Business School. “They like to know their ideas will be listened to and acted upon, and to be part of wider communities where they have a visible influence,” she says.
From a benefits perspective, this group tends to be more motivated by lifestyle products such as gym membership or discount shopping schemes, says Ed Smithson, head of flex, shareplan and communications at Buck Consultants at Xerox. “It’s very much here and now and they’re enjoying living,” he says. “When employees are straight out of school and have no dependents, they think they’ll live forever and never get ill so benefits such as life assurance are neither here nor there.”
Health considerations
But this doesn’t mean health is not important to this group. James Freeston, marketing director at Axa PPP Healthcare, says nearly three-quarters expect their employer to encourage them to be physically and mentally active, compared with just over half of baby boomers, those born between 1946 and 1964. “In a similar vein, 53% of millennials expect their employer to offer health and wellbeing support free of charge, compared with just a third of baby boomers,” he says.
Financial motivation
For those in generation X, born between 1965 and 1980, more traditional financial benefits are more important, says Smithson. As employees go through the mid-life stage where children are at home, they perhaps want more life assurance and protections around their employment. “But then children leave home and [their] focus on protection tails off a bit and it all becomes about making sure [they’ve] saved enough into [their] pension,” he adds.
Those in the baby boomer generation, meanwhile, tend to place a higher emphasis on work-life balance, with 74% of over-55s saying this is a key priority, according to Managing the Expections and Keeping Motivation Amongst the Diverse Workforce, 2015, a study by NGA Human Resources. Annual leave and job security are also important, according to the aforementioned Hays research.
One approach for all generations
Yet while there may be certain characteristics of particular age groups, that does not mean employers should look to totally segment their motivation approach and benefits offerings. Martha How, reward partner at Aon Employee Benefits, is currently looking into this very issue, through a combination of research surveys and focus groups. “There’s a lot of hype about segmenting workforces and offering different things to different segments with reference to their generation, and in our opinion that’s a bit crude and not necessarily helpful for employers,” she says.
Early indications from her studies suggest core employer-funded benefits such as life assurance, pensions and private medical insurance are valued equally highly by employees of all ages, with any differentiation more likely to be among voluntary benefits. Gym membership, for instance, is more popular with younger staff. “Employers shouldn’t formulate conclusions about the rest of the world; they need to understand how their own demographic works,” she adds.
Employers should also avoid assuming younger employees are not interested in financial products. Roger Sanders, managing director of independent financial advisor Lighthouse Group, says: “We have seen workers in their early 20s becoming increasingly interested in long-term planning, regardless of their current situations. Most employees, irrespective of age, value benefits that protect their financial situation and that of their family, such as life insurance and critical illness cover.”
It is a similar story with health screening. Peter Blencowe, managing director of Bluecrest Wellness, says the emphasis should be on tailoring any service rather than restricting it. “For younger age groups, the most relevant tests are those that help highlight risks of developing conditions in the future rather than their existence now,” he says.
This can include cancer and heart disease.
Employee choice
Personalised reward schemes can help motivate individual employees without having to generalise about generations. Iain McMath, chief executive officer of Sodexo Benefits and Rewards Services, says: “Simple and cost-effective incentive schemes should appeal to an entire workforce, regardless of age and demographics. For a scheme to have a positive effect, it is essential that staff are given the option to tailor their reward to their personal goals and interests.”
This kind of scheme will only become more important as older generations stay working for longer and younger ones start entering the workplace. Derek Irvine, vice president of client strategy and consulting at Globoforce, explains: “In most cases, it is no longer offering purely financial rewards for a job well done but rather including other forms of reward and recognition that will motivate and energise.
“When it is made explicitly clear to the next generation of employees how they are adding value to their organisation, and they are rewarded in a way that they appreciate, they have a much greater reason to be engaged with their work and strive for greater achievements.”
Case study: Gibbs S3 takes a personal approach to staff motivation
With a broad age range of employees across different job roles, IT recruitment firm Gibbs S3 takes a personalised approach to rewarding those who outperform expectations.
Ameera Mohammed, director of resourcing and operations, says: “We want to make sure that it’s inclusive of everyone but we’re very mindful of the different generations.”
In practice, this means giving individuals a choice as to how they want to be rewarded. “One of our younger guys who did exceptionally well for us was an avid football supporter so we offered him tickets to his favourite team and an overnight stay in a hotel,” she says. “But our compliance team, which is very different in age, wouldn’t necessarily want that, so we’d look at what would suit them. [For example,] we had one person who was a bit older who wanted an overnight spa stay.”
But while looking to cater for individual tastes, the business is reluctant to put in place a more formal policy based around the ages of employees. “What motivates one person of a certain age might still interest someone who is younger or older,” explains Mohammed. “What we don’t want to do is to be ageist.”
BOX 3: Hays research graphs - see word doc in subs folder. Can we redraw this?
Viewpoint: Multi-generational motivation needs flexibility
I have been involved in a number of pieces of work focused on the engagement needs of a diverse workforce, and in each case the answer is the same: different people are motivated by different things, and a one-size-fits-all offer will score in some aspects while missing in others.
So what are the things to avoid when dealing with a multi-generational workforce? Well, the more rigid and inflexible the employment offer, the less likely employers are to be able to meet the motivational needs of different groups, that’s for sure. In fact, they run the risk of negatively impacting one group to engage another. Talent approaches that are underpinned by assumptions rooted in historical career models will have less and less traction as employers try to reconcile different career expectations. But in accommodating difference, they must try to avoid creating silos between generations.
Employers must also beware of focusing too much on what some generations need, and less upon what they can give. For example, how can they offer older employees more diversity of contribution as opposed to assuming that they should just be ‘left in role until retirement’.
First, HR must apply segmentation approaches to actively identify what motivates different generations and what they can contribute at any stage in their careers.
Secondly, HR must develop a more flexible and joined-up suite of employee offers that go way beyond the financial. There is a balance to be achieved here between the ability to personalise and simple practicality and cost-effectiveness.
Lastly, it must recognise that it is line managers who must act as the broker between this employee value proposition and the individual needs of its employees, and put more effort into equipping them with the skills and confidence to do so. Those organisations that are able to see every employee as an asset, understand what motivates them and execute the employer deal well will, ultimately, be better placed to get the best from a multi-generational workforce.
Professor Nick Kemsley is co-director of the Centre for HR Excellence, Henley Business School
