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Jennifer Beck

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As the VP, Customer Experience & Insights, Jennifer Beck is responsible for the overall experience of ARAG’s members through the research, analysis, and evaluation of current processes and future trends of both consumer expectations and industry innovations. Beck can be reached at ARAG Legal Insurance, telephone 800-888-4184. Email: jennifer.beck@ARAGlegal.com.

New Research: How Each Generation Views Employer Benefits

As today’s workforce continues to evolve, employers now manage four generations of employees who have differing—and sometimes conflicting—needs. This dynamic prompted ARAG Legal Insurance to learn more about how employees’ generation impacts their views of their benefits, communication preferences and top concerns.

The ARAG Multigenerational Workforce Study 2024 surveyed 2400 full-time employees from across the U.S. and analyzed responses from each of the four generations.

Millennials are by far the largest working generation. But as Boomers continue to retire (albeit more slowly than many expected), Zoomers are rapidly becoming a more prominent force. In fact, Gen Z employees are expected to outnumber Boomers by the end of 2024 and are forecast to represent a third of the workforce by 2030.

As you help your clients review their benefits offering for the coming years, it’d be helpful to keep these generational nuances in mind to stay relevant and more inclusive.

What’s keeping employees up at night—and how can voluntary benefits help
According to ARAG’s research, financial stability was the most pressing issue for all employees while a closely aligned worry about future uncertainties was a top three concern across all generations.

Overall, the primary worries causing respondents to lose sleep are:

  • Financial stability (63 percent)
  • Future uncertainties (45 percent)
  • Work-life balance (39 percent)
  • Experiencing high levels of stress or anxiety (37 percent)
  • Their own health issues (35 percent)

Some distinct generational differences to note include:

  • Younger workers (Gen Z and Millennials) expressed greater concern about their financial stability than their more senior colleagues.
  • In addition to finances, Millennials are the most concerned about job security and navigating complex family matters.
  • Members of Gen Z are most worried about work-life balance and most likely to experience high levels of stress and anxiety.
  • For Gen X and Boomers, health concerns can loom large—their own health and the health of family members.

What does this mean for your clients? Employers should consider investing in or expanding programs that can help alleviate some of this stress, such as financial counseling, retirement planning, student loan repayment plans, LTC solutions or legal insurance. These types of voluntary benefits can help employees prepare for the future and mitigate risk as unforeseen issues arise.

What each generation thinks of their employers’ benefit offering
The good news is: Overall, 76 percent of employees feel some level of financial, emotional or mental support from their employers. Further, the 2024 ARAG study reports that 69 percent of employees are “somewhat to very satisfied” with the benefits program offered by their current employer.

When looking at this stat by generation, we find that older generations are the most pleased with the benefits options; with nearly three-quarters of Gen Xers expressing satisfaction, followed by Boomers (70 percent), Millennials (68 percent) and Gen Z (66 percent).

But what about the more than 30 percent of employees that don’t feel this way? Nearly two-thirds of those employees were dissatisfied because benefit costs were too high and 42 percent thought the options were too limited. Gen X (76 percent) and Millennials (63 percent) were most likely to cite high cost—which makes sense when you consider that these two generations are more likely to have dependents or a family plan for most of their benefits.

How well do employees really understand their benefits
The ARAG 2024 study found that nearly 40 percent of employees are “not at all or only slightly familiar” with non-medical voluntary benefits, such as life insurance, financial wellness and planning programs, LTC, pet insurance and legal plans. But understanding these benefit options can be key to addressing employees’ biggest concerns.

Contributing factors for this disconnect were lack of communication; benefit program complexity (being too hard to understand); and not having enough time to learn about these benefits. On average, employees spend just 23 minutes reviewing information on these voluntary benefit options. Gen Z, the newest entrants to the workforce, spends slightly less time than Boomers, who consider themselves very familiar with their options.

Perhaps it’s no surprise then that nearly two-thirds (64 percent) of Zoomers report seeking advice or opinions from colleagues, friends or family members to support their benefit decision-making.

This speaks to the need to ensure your benefits content is easily accessible, on-demand and easy to understand and share, particularly for employees new to the world of benefits.

Workplace communication preferences are shifting
When your clients are working on creating messaging around their benefits, particularly during open enrollment, keep in mind that most employees (60 percent) need a “moderate” amount of information to decide if they will enroll in a non-medical voluntary benefit.

As employers think through how best to hit that “just right” level of benefits information, their communication plans should also factor in each generation’s preferred methods to receive that information—both where they align and where they differ.

All generations across the workforce have an affinity for receiving open enrollment communications via email.

Older generations still prefer more traditional printed booklets and benefits guides, while younger colleagues heavily favor digital communications, such as digital booklets, videos, texts, and online articles.

And to further illustrate how large the digital divide can be, consider this. For those who had never used AI-based tools to help make benefit selections—given the opportunity, more than half of Gen Z employees would be open to using it while 73 percent of Boomers said they were unwilling to even try.

Looking forward
The bottom line for you and your clients is that employees want to feel supported by their employers in their personal and professional lives—and one impactful way employers can do that is through the benefits that they offer. As more members of Gen Z enter the workforce and more Boomers exit, employers will need to adapt their benefits and communications strategies that support them to resonate with younger generations’ preferences and needs. It’s also a great opportunity for you to help clients communicate more effectively about the value their benefits deliver to employees, regardless of their age or life stage.

The Stress That Stems From Legal Issues

Let’s take a moment to acknowledge that today’s employees have been through some stuff the last few years. They’ve weathered a pandemic and a shakeup in their work arrangements and are now most likely dealing with challenges like heightened financial issues, complex family matters, and an erratic economic outlook.

More and more, employees have been feeling the financial, mental and emotional strains of trying to balance it all—having a job, managing a household and finances while often caring for children as well as aging parents. As a result, their stress levels have climbed sharply. For example, heading into 2023, 37 percent of Americans1 rated their mental health as only fair or poor, up from 31 percent the year prior, and more than 25 percent of adults are anticipating more stress ahead. In addition, a record number of workers reported burnout this year—with women and those under 30 the most stressed.2

When these challenges turn into legal issues, it can send an employee’s stress levels even higher. This anxiety can stem from not knowing who to call, worries about paying expensive attorney fees or uncertainty around how the matter will turn out. Dealing with a legal event can eat into a person’s savings, steal away family and personal time, and linger in the backs of their minds as they try to focus on work.

Study shows the connection to legal matters
An October, 2022, stress research study from ARAG Legal Insurance examined how consumers address the legal issues they face—and the impact on their mental health and wellbeing when dealing with them. We surveyed U.S. consumers who used an attorney but did not have a legal plan, consumers who did not use an attorney or have a legal plan, and consumers with a legal plan, using ARAG members as a point of reference. All respondents were employed full-time.

These study findings provide compelling insights into consumers’ experiences with legal events that may factor into how brokers can help clients mitigate employees’ growing mental health concerns in the coming years.

First, legal issues happen more often than you think
There’s a misconception with most consumers that legal events are rare events. “That would never happen to me.” But they’re far more prevalent than consumers might think. The study found that 85 percent of individuals experienced a legal event in the past three years. These legal events range from bankruptcy to tax issues and adoption to credit card disputes. Understandably, many consumers may feel intimidated and confused over the lengthy legal processes and myriad paperwork involved. The study also showed that “going it alone”—addressing a legal issue without the help of an attorney or legal plan—greatly compounds the stress consumers feel.

The ARAG study findings reinforced what we have seen through Customer Care calls and member satisfaction surveys—that many of the stressful situations employees face day-to-day can quickly become legal issues for them and their families. Additionally, we’ve seen the volume of member interactions to our Customer Care team increase by nearly 10 percent so far in 2023.

The higher the personal stakes, the higher the stress
The study also found that the greater the severity of the legal issue and its potential financial impact, the more pressing it is to hire an attorney to help resolve it. Issues like this also come with higher levels of stress. Eleven of the top 15 legal events for which an attorney is most frequently hired are family-centered, making the outcome more concerning. Many of these issues also rank high on the Holmes and Rahe Stress Scale—like the death of a spouse or close family member, divorce or separation and change of financial state.3

When an attorney was hired, two thirds of respondents said that it had a positive impact on the outcome of their situation. However, when looking at the access to justice gap, those experiencing legal issues—particularly with a large financial impact—may not be able to pay for attorney fees on their own. This is where a legal plan can help with overall well-being.

Legal plans—also referred to as group legal insurance benefits—provide consumers with a set of services designed to protect them against a host of personal legal matters and help avoid costly attorney fees. Comprehensive legal plans work much like health insurance. For an affordable monthly premium, members have access to a network of attorneys and an array of online resources.

Uncertainty drives up stress levels
When navigating a legal problem, uncertainty comes from many places. Not knowing where to start, understanding the options, the potential impacts on work performance, and time and money spent to resolve the situation all weigh on consumers. For example, those working with an attorney but without a legal plan rated their stress levels at least 24 percent higher for each of these factors than those who have a legal plan.

Stress is taking its toll at work
So how does this impact your clients’ employees? Consumers who try to handle a legal situation without benefit of a legal plan or attorney experienced more stress, more time off work, and more negative impact on their mental health. The study revealed:

  • 37 percent said addressing their legal matter had a very negative or somewhat negative impact on their performance at work.
  • Only 41 percent of consumers in this group were able to manage their legal situation without taking time off work compared to 72 percent of those with a legal plan.
  • Consumers without a legal plan spent an average of 2.5 hours more than expected handling their legal matter, while legal plan members spent an average of one hour less than expected.

A broker weighs in on the impact of stress on employees
Jessica DePhillips, Voluntary Benefits principal at Mercer, offered her perspective regarding the increased stress levels on employees—and its probable cause. She notes, “In the most recent Mercer Inside Employee Minds study,4 we found that short-term financial strain, such as covering monthly expenses, is the number one concern at the top of employees’ minds. With nearly two-thirds of the American population living paycheck to paycheck, coupled with facing a potential legal matter, on top of an already strained economy, that is an anxiety-producing recipe for just about anyone.”

DePhillips says, “We know that employees who are dealing with a legal matter are most likely to be dealing with a financial situation as well—and losing productivity at work. And all of that is likely increasing stress and anxiety.”

She added, “A legal program can help employees by putting their mind at ease, providing legal representation as well as savings on legal matters so that employees can get back to the job at hand.”

The implications for business—and brokers
Stress causes around one million employees5 to miss work each day, costing US businesses billions yearly as a result. As stress and anxiety continue to weigh on employees, employers are proactively bolstering employees’ mental health resources, recognizing they’re critical to ensuring employee productivity, satisfaction and retention.

In fact, the majority of US employers plan to increase their investments6 in programs designed to promote better mental health, stress management and resilience. These include enhancements to employee assistance programs, digital health tools and financial wellness resources. Keep in mind that while these can be valuable resources, on their own they may not go far enough to address the more pressing legal issues that can arise.

For example, in working with clients, DePhillips discovered that a common misconception from employers is that their employees have legal services under their EAP program. She adds, “While many offer some type of legal assistance, their EAP does not provide an attorney to represent the employee in a legal matter or provide full coverage for legal work, such as creating a will, setting up a trust, buying or selling a home, and estate planning.”

I touched base with Brian Billings, director of Client Management at ARAG, who provided insight on ways you can help clients build a more holistic support system to address employees’ mental, physical and financial wellness:

  • Keep your eyes and ears open. Employee feedback is your most valuable source—and often an early warning—for understanding where stress is coming from. Ask if your clients can share any employee survey data, as well as input from employee resource groups who often represent and advocate for different communities and interests within the workforce’s population.
  • Encourage employees to take full advantage of their benefits. Work with carriers to help you offer your clients ongoing benefit communication for their employees so they’re more informed—and ultimately appreciate—all the services and nuances of their compensation package offers.
  • Help clients offer benefits that directly address mental wellness. When employees feel their employer supports their mental, physical and financial wellness, they’re apt to feel valued, more likely to remain at their job, and able to achieve the work/life integration they need to be their best.

In fact, APA’s 2022 Work and Well-Being Survey7 showed that more than 80 percent agreed that how employers support mental health will be an important consideration for them when they look for future work. This study also confirmed that employee expectations related to mental health support are shifting, with seven in ten workers reporting that they believe their employers are more concerned about employees’ mental health than in the past.

That’s a good sign, and an opportunity for your clients to answer the call by providing empathetic, responsive benefits.

Reference:

  1. https://www.psychiatry.org/news-room/news-releases/americans-anticipate-higher-stress-at-the-start-of.
  2. https://futureforum.com/research/future-forum-pulse-winter-2022-2023-snapshot/.
  3. https://www.verywellmind.com/what-is-the-holmes-and-rahe-stress-scale-6455916.
  4. https://www.mercer.us/content/dam/mercer/attachments/private/us-2022-inside-employees-minds-report.pdf.
  5. https://www.zippia.com/advice/workplace-stress-statistics/.
  6. https://www.wellable.co/blog/2023-employee-wellness-industry-report/#:~:text=Wellable%27s%20survey%20found%20that%20the,their%20investments%20in%20these%20areas.
  7. https://www.apa.org/pubs/reports/work-well-being/2022-mental-health-support.