Shifting Demographics, Emerging Opportunities: Designing Programs For The Workforce Of Today And Tomorrow

Authored By: Joseph De Dominicis | Publish Date: January 9, 2019

Today, we are seeing four generations of employees sharing office space, challenging employers to develop ways to communicate with and support all of them.

Canadian workplaces currently employ four different generations of workers: boomers (born 1946 to 1964), generation X (born 1965 to 1980), millennials/generation Y (born 1981 to 1996) and most recently, post-millennial/generation Z (born in 1997 or later). Not surprisingly, each of these cohorts brings unique aspects to their approach to working and the workplace. The two largest groups, boomers and millennials, could not be more different – yet together, they are the driving forces behind workplace change:

  • Boomers – In 2017, 21.1 per cent of those employed in Canada were age 55 or older.1 With increased longevity and lower morbidity, boomers are working longer and contributing to a robust part-time workforce. With this expanding economic reality comes a need for improved benefits solutions and job flexibility.
  • Millennials – As the largest cohort in the Canadian workforce, millennials will continue to define workplace culture and expectations around employee compensation and benefits. Millennials are also increasingly taking on contract positions, largely driven by the gig economy and expectations that their work lives will be longer than past generations.

These demographic groups are the catalysts for massive disruption in traditional employer-employee relationships and, by extension, pension and benefit programs, now and in the foreseeable future. We expect the shifts to be most evident in the following three areas:

  • Employee Experience – The way an employer delivers HR programs (benefits, pensions, wellness or employee and family assistance) will be increasingly important.
  • Flexibility – One size won’t fit all. Plans will need to address the unique life stages and priorities of different employees.
  • Access – As a result of a growing contract and part-time workforce, we will see the rise of alternative arrangements, government and industry plans begin to complement employer-sponsored plans.

Employee Experience: Prioritizing Seamless User Experience Across Programs

Employees expect workplace programs that are delivered to them in the same way that they receive other information in their daily lives. I recently heard an example of this at a conference that resonated with me: a day in the life of an employee may begin with an alarm from an Apple watch, followed by asking Siri or Alexa to play a weather report and their favourite song. While taking an Uber to work, the employee orders coffee from the Starbucks app, which is ready for pick up on the way to the office. A disconnect then happens when that employee arrives at work and their experience has yet to catch up to the modern world. Programs are often not integrated, need to be accessed across multiple systems, are not mobile first, and the information and tools are generic, not tailored to an employee’s personal circumstances.

If plan information is not delivered in a way that engages employees, it will not matter how strong the programs are or how relevant and important the content is – it will not be seen. As leading organizations review program design, many are less concerned with providing the highest level of benefits and instead focus on providing the absolute best user experience for their employees. Developing a seamless and customized user experience that is delivered in the way that their employees receive information in their daily life is critical moving forward. The trick will be to design and communicate plans that address all generations in the workforce for optimal engagement.

Flexibility: Developing Curated Programs To Address Various Employee Needs

With a multi-generational workplace, employers will need to develop programs that are flexible enough to work for an employee at each stage of life that they may be facing.

Flexibility is particularly important when looking at an employee’s financial health. For example, an emerging trend is integrated programs that allow employees to allocate contributions based on their specific life goals and needs. These flexible designs help employees prioritize and facilitate allocations to financial needs that may change over a life cycle, including retirement savings, health spending accounts, and debts (i.e., mortgages, student loans, and credit cards), effectively allowing each employee to customize their design. However, these types of flexible programs will also require customized education and tools to help employees understand trade-offs and make the right choices for their financial future.

We can look to the broader world of data and technology for help. Think Netflix and the curated content and recommendations each user receives based on their preferences. We are starting to see similar approaches being used to help employees customize their HR programs to individual circumstances and life stages. Using artificial intelligence, avatars, personas, social proofing, and behavioural economics (nudges), education and smart tools can deliver relevant content and recommendations specifically curated for the user, to increase engagement and support the decision-making processes. These tools and techniques will be an integral part of plans and programs of the future.

Access: The Continued Rise Of The Gig Economy

Globally, contract, self-employed, and freelance workers are one of the fastest growing segments of the economy. Studies in the United States put the gig economy at nearly 40 per cent and growing1 – and expectations are that Canada is not far behind. While traditionally an employee might work for one to five employers in their lifetime, a contract or freelance worker could work for many multiples of that or take on seasonal work with the same employers each year. Employers are often being less inclined or unable to support these workers through traditional plans and programs. However, as contract workers become a larger portion of the economy, new and innovative ways to provide support will garner increasing attention.

Employers will continue to look for solutions ranging from providing access to tools and education to including certain contract employees in programs and savings arrangements. Similar to the flexibility discussion above, the focus will be on providing contract employees with smart tools and customized education to help them effectively allocate portions of compensation to benefits, pension, and savings depending on their specific circumstances.

Beyond the traditional single employer sponsored programs, there is a trend towards industry plans and the broadening eligibility for employees within a specific industry to join related jointly sponsored pension plans (JSPPs). While these types of arrangements are not new – trade unions have used multi-employer arrangements for many years – we expect to see these types of plans emerge in non-traditional industries as employees become less connected to a single employer.

Workplace demographics will continue to shift in 2019 and onward. As Canadian employers and employees kick off the new year with a focus on building and sustaining growth, the future of business success with a multi-generational workforce lies in a customizable user experience. Today, more than ever, it is crucial for human resources and pensions and benefits managers to ensure that important information is delivered through the right channels, to the right demographic.

Joseph De Dominicis is vice-president and Ontario retirement solutions leader for Morneau Shepell.


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