How do millennials make benefits enrollment decisions?
What exactly do millennials want from their benefits? And how do they go about deciding which benefits to choose? The results of a new study may surprise you.
Millennials are a hot topic among employers, and for good reason — they’re the largest age group in today’s workforce. The oldest millennials are now in their mid-30s, working their way into management and leadership positions, while the youngest are graduating college and entering the workforce. For the next several decades, this generation’s habits, behaviors and expectations will influence how you recruit and retain the best employees.
A key aspect to employee recruitment and retention is the benefits package. So, what exactly do millennials want from their benefits? And how do they go about deciding which benefits to choose? In October 2017, ARAG® commissioned Russell Research to study millennials’ perceptions and buying habits when it comes to employer benefits. Researchers collected data from 1,000 online interviews with millennials and members of older generations. Additionally, researchers conducted 100 in-depth interviews with millennials to gain more detail and personal insights into their legal insurance purchasing behaviors. The results of the study may surprise you.
How millennials select benefits
When it comes to the benefits enrollment process, millennials take a meticulous approach. In fact, millennials review every single one of their benefit options to see what is available to them. As they review their options, millennials carefully evaluate need and cost, and they “read the fine print.”
Millennials evaluate available benefits using a three-step process:
- “What essential benefits do I need?” Millennials talk about prioritizing medical benefits over everything else, followed closely by dental benefits.
- “Of the remaining non-essential options, which ones am I interested in?” Millennials want benefits that feel personalized and useful.
- “Based on my budget, which of these benefits that I want can I afford?” Millennials are more cost-conscious than other generations when it comes to benefits. While 50 percent of millennials consider their budget when selecting benefits, only 42 percent of older generations do.
Millennials and legal insurance
Based on their financial focus and careful evaluation during the benefits process, you might think millennials are unlikely to select a voluntary benefit like legal insurance. In fact, the study revealed they are more likely (41 percent) to purchase legal insurance compared to older generations (30 percent).
Why the disparity? One reason may be fear of an impending legal issue. Of the millennials surveyed, 35 percent believed they would likely experience a legal issue in the next year, while only 26 percent of other generations felt a legal problem was on the horizon. Fear is a powerful motivator for millennials, an anxious generation who has come of age during a time of rising education costs, growing debt and increasing economic uncertainty.
When millennials surveyed were asked why they would be interested in purchasing legal insurance, two common themes emerged:
Peace of mind: Millennials understand that uncertainty and risk go hand in hand. For these individuals, having legal insurance is worth the expense because “anything can happen” and they want to be protected even though they understand they may never need to use it.
Hedge against future expenses: Millennials understand the potentially high cost of legal help and would instead pay for insurance as part of their benefits package rather than have to pay out-of-pocket for legal help in the future.
What millennials want to know when deciding to purchase legal insurance
Beyond their likelihood to buy legal insurance, millennials were also asked to share what information they expect to receive when deciding whether to purchase legal insurance. Some key things that should be communicated are:
- Comprehensive coverage details: Millennials want to know the specific legal matters covered by their plan. They want as much detail as possible about all coverages.
- Clear outline of services provided: Does the legal plan provide phone advice? In-office consultations? Representation? Online resources? Millennials want to know it all so they can see what they are getting for their money.
- Potential cost savings: Millennials appreciate plan materials that show how much they can save. They preferred visuals that compare costs.
When it comes to employer benefits, millennials are protection-minded. They scrutinize their options, weighing needs and costs. And they are more likely than other generations to purchase legal insurance. If employers want to offer a benefits package that’s competitive, they’ll need to continue offering innovative offerings that provide real value to millennials.