Understanding the Shift Towards Non-Traditional Benefits

Gone are the days when a standard benefits package of medical coverage and a 401(k) option was enough to keep employees satisfied. Today's workforce is looking for something more. They’re looking for a benefits package that not only provides financial security but also enhances their quality of life, supports their health, and meets their unique personal needs.

Non-traditional (and often overlooked) benefits like pet insurance, wellness programs, and identity theft protection reflect the broader well-being that today's workforce deeply values. Companies that adapt their benefits packages to the needs of their employees are seen as innovative leaders, while those that do not risk falling behind.

Employees want and need more, and companies that deliver are gaining a competitive edge. By offering a holistic approach to well-being, companies can attract top talent and build loyal, engaged teams.

Non-Traditional Benefit Preferences Are Shifting — Overall and Generationally

We recently completed research on benefit enrollment trends over the past three years. That research showed shifting benefit preferences across the board:

• Pet Insurance — A Cross-Generational Favorite: Enrollment in pet insurance has increased by 15% across all generations. Boomers, in particular, have shown a surprising rise in interest, with engagement rates at 49%, while Gen Z follows closely at 47%. This shows that pets are considered integral family members, regardless of age.
• Identity Theft Protection — Gen Z Leads the Way: Enrollment in identity theft protection has increased by 20%, largely due to Gen Z's proactive stance on digital safety. Gen Z's enrollment rate stands at 30%, highlighting their heightened awareness of digital security risks.
• Wellness Programs — Universal Appeal for Well-being: Wellness programs continue to appeal broadly across all generations. Boomers have a participation rate of 76%, while Gen Z's participation is at 66%. This emphasizes the universal desire for a well-rounded approach to health and well-being.
• Legal Insurance — Low Utilization but High Potential: Legal insurance remains relatively underutilized at 11% to 18% across generations, but it provides significant value by helping employees navigate legal challenges. Increasing awareness and education could boost enrollment, particularly among employees facing legal complexities.
• Financial Wellness Programs — Broad Appeal: Financial wellness benefits, including student loan assistance and financial planning resources, are increasingly sought after. Enrollment in these programs has risen by 18%, particularly among younger employees who face significant financial pressures from ballooning costs.

Non-traditional benefits resonate differently across generations, but clear trends are showing their growing importance for all.

Stand Out as an Employer: The Branding Power of Non-Traditional Benefits

In today's job market, candidates aren’t just looking for a paycheck. They want a workplace that meets their needs across the board and values them as a person, not just an employee. Offering non-traditional benefits can boost a company's brand by attracting diverse, talented employees by demonstrating an understanding of their true needs and a willingness to invest in their total well-being, personally and professionally.

According to research from LinkedIn, 60% of job seekers rank benefits and compensation as their top priority when it comes to searching for a new job.

Employees want more than financial security, though. They want benefits that align with their personal values and lifestyle. Companies that effectively integrate these benefits into their branding and employee value proposition are often seen as more progressive, caring, and employee-focused.

Embracing non-traditional benefits fosters employee loyalty, reduces turnover, and builds a cohesive team. In a rapidly evolving job market, companies that invest in their people — not just their roles — stand out. By offering personalized benefits that meet diverse needs, companies can strengthen their brand and be seen as an employer of choice.

Actionable Steps for Employers: Enhancing Engagement with Non-Traditional Benefits

Even if an organization is already offering non-traditional benefits, it might not be getting the full advantage. Many times these benefits are seen as an afterthought in benefits communications. To truly leverage their power, employers must take specific actions that make these offerings meaningful and accessible.

Communicating Their Value — Non-traditional benefits often need clearer communication to ensure employees understand their value. Employers should consider targeted campaigns that emphasize how these benefits meet modern needs and support total well-being. Whether it's protecting digital identities or offering peace of mind through pet insurance, clear messaging is crucial.

Customizing Benefits for Life Stages — Providing a range of non-traditional benefits allows employees to choose what's most relevant to their lives. Flexible offerings that cater to different life stages — from promoting legal insurance to employees looking to purchase a house next year to financial planning tools for those thinking about retirement — can help boost overall satisfaction and engagement.

Education and Awareness: Closing the Knowledge Gap — Many non-traditional benefits are underutilized simply because employees don't know enough about them. Employers can increase engagement by offering educational workshops, real-life examples, employee testimonials, and clear communication about how these benefits can make a difference.

By focusing on these strategies, employers can create a culture where employees feel informed, supported, and valued. Engaging employees with non-traditional benefits requires making those perks understandable and accessible throughout the year and not just during annual open enrollment.

Rethink Benefits for the Modern Workforce

Non-traditional benefits are no longer just nice-to-haves. They are now essential components of a competitive benefits package.

These types of benefits demonstrate a company's commitment to supporting its employees' holistic needs, going beyond traditional offerings like healthcare and retirement plans. Employees are looking for benefits that make a meaningful impact on their lives, whether it’s pet insurance, mental health support, or flexible work arrangements.

To stay ahead, companies need to understand what their employees truly value. Offering benefits that go beyond the basics and resonate across generations isn't just a nice thing to do; it’s the right thing to do. It can be the difference between keeping great talent and losing it. Invest in all of the benefits that matter, and your people will invest in you. That's how you build a winning culture.