Benefits are a critical and challenging component in building a successful small business. However, they are also costly, confusing and often come with compliance challenges that can trip up even the most organized small business owner. In addition, today small business owners face another hurdle when it comes to benefit planning: generational differences.

Today’s workforce is radically heterogeneous, where the typical small business includes employees from the Baby Boomer generation, Generation X, the Millennials and, now, Gen Z as well. With a broad range of ages and life stages among your employees, it’s essential that your benefit strategy matches the needs of each group effectively.

Benefit Priorities for Boomers

Members of the Baby Boom generation (born between the end of World War II and 1965) are now between their mid-fifties and their early seventies. At this point, Boomers have a number of priorities and concerns. Paramount is healthcare, as more than 90% of Boomers insist that their employer provide access to comprehensive health insurance coverage. For aging Boomers, this needs to include vision and dental as well as medical, and often Boomers are sensitive to the size of an insurer’s network as they may see a variety of specialists or have built long-term relationships with specific physicians or other providers.

Also essential to this generation is flexibility and stability in retirement options such as 401(K) plans or pensions. Another option that will appeal to Boomers is wellness programs such as discounts on gym memberships or alternative therapies (like chiropractic and massage).

Finally, Boomers very much worry about stability in their workplace as unemployment at this age can be particularly brutal. While job stability is not technically a benefit, you can create stronger infrastructure around Boomer employees by creating continuing education initiatives for older employees to learn new techniques and technologies, or creating a mentoring program so that younger employees can learn from their more experienced colleagues, and vice-versa.

Benefit Priorities for Gen X

While many Boomers will already be past the years of taking care of children in the home, Gen X employees (born between 1966 and 1976) are typically right in the middle of this phase of life, ranging anywhere between having little ones in the home to sending their eldest off to college. This means that, in addition to healthcare coverage that is comprehensive and family-friendly, Gen Xers worry about family-friendly workplace policies and easy access to childcare. They are also thinking about and planning for retirement (as well as college funds), so investment and retirement programs are highly valued.

Another factor impacting Gen X is the increasing crisis of needing to take care of aging parents. As the Boomer generation benefits from dramatic advances in healthcare and advancing life expectancy, the task of caring for these long-term aging elders falls to Gen X. More than 5.6 million Gen X adults in the U.S. are living with their aging parents in the home, and millions more are having to take considerable time for caregiving and support to their aging and increasingly infirm parents. This means that Gen X employees highly value work flexibility and the option of working remotely at least part-time to allow them to address these needs without creating undue friction at work.

Benefit Priorities for Millennials

This generation (born between 1977 and 1994) is the largest generational cohort since the Baby Boomers, which means there are twice as many Millennials as there are Gen Xers. In addition, the press has placed a high degree of emphasis on reporting about this generation, which has led to as much misinformation as legitimate information and understanding about this group’s needs and preferences in the workplace.

From a benefit perspective, it’s important to start by noting that comprehensive health insurance remains priority one with this generation, just as it is with their predecessors. Since the Millennials often graduate into the marketplace with a high burden of student loans and other debts, they are attracted to employers who offer opportunities to ameliorate some of this burden. These include programs that allow for subsidized continuing education or employer assistance with paying off student loans.

Millennials are particularly interested in employer-match initiatives in areas such as retirement, transit benefits and other programs. They are also much less likely to drive regularly or own a personal car than their Baby Boomer and Gen X predecessors, making them ideal candidates for transportation benefit programs such as TransitCheck or SmartBenefits, as well as bikeshare memberships and rideshare discounts.

In addition, this generation prefers flexible working. This may not necessarily be about remote working (as was noted with Gen X), but may have more to do with flexible work hours, easy movement between teams and positions within the company, clearly defined paths for upward mobility, and relaxed dress codes.

Benefit Priorities for Gen Z

And now we arrive at Generation Z, the newest cohort to enter the workforce. Born between 1992 and 2012, this generation is early in its development and growth, making it particularly tricky for employers to estimate the needs and expectations of members of this group. What we do know is that Gen Z has come of age during a time of unprecedented diversity and the omnipresence of mobile technology. Statistically, this generation tends to lean liberal when it comes to their collective sense that things such as healthcare and a living wage should be universal rights.

As a result, you can expect Gen Z members to seek a diverse work environment, one that uses and harnesses cutting-edge technology, and one where the employer shares this generation’s core values and expresses this through benefits that are accessible to all employees. A full-time Gen Z employee may be as concerned about the lack of benefits being afforded to their part-time colleagues as they may be worried about their own benefits. In other words, they are more likely to look to at how an employer treats the entire group when assessing how the employer will treat them individually. They also expect a highly democratic and participatory culture at work, which can be addressed proactively by creating options and opportunities for employee input and selection.

Putting It All Together

Obviously, a small business owner cannot afford to tailor benefits to fully meet the needs and expectations of every generation precisely, and no small business has an unlimited budget to provide everything that each cohort has shown a preference for.

However, every small business should look at its employee mix today and the one it expects to have over the coming 3-5 years as a baseline for benefit planning. In addition, it may be possible to bundle strategies or solutions so that they benefit more than one generation (for example, offering flexible working that would appeal to Gen X while also relaxing the office dress code and encouraging a wider range of in-office work hours that would appeal to Millennials).

In short, effective benefit strategies are designed with the attraction and retention of employees in mind, and this begins by considering each generation’s real-world needs and building from there. Take the time to craft a benefit strategy that uniquely meets the needs of the employees in your business.