The way we work—and the benefits employees value most—is shifting. As younger generations take center stage in the workforce, traditional benefits alone aren’t enough to meet evolving needs. Employees are juggling work, life, and caregiving responsibilities in new ways, which means companies need to rethink their approach to benefits. By integrating family care benefits with existing offerings, organizations can create a more supportive, holistic benefits program that enhances employee well-being, reduces financial stress, and improves retention.
A look at the numbers
It’s official. For the first time, Gen Z employees (born 1997-2012) outnumber Boomers (born 1946-1964) in the workforce.
Combined, Gen Z and their Millennial counterparts (born 1981-1996) now make up 54% of the U.S. workforce, creating a noticeable shift in how employees approach work and what they expect from their employers.
The demographic shift extends beyond generational population totals. Younger-generation employees are less likely to live as part of a traditional nuclear family, and more likely to have “sandwich” caregiving responsibilities for both children and aging parents.
According to the latest U.S. Census, nearly one-third (30%) of American families with kids under 18 are single-parent households. It’s a number that has tripled since 1965, with the proportion of single-dad households also growing steadily over time.
Overall, 73% of the U.S. workforce reports having caregiving responsibilities. 3 in 4 employee caregivers say they spend 10 or more hours per week caring for children, seniors, special needs children and adults, or pets.
The new employee benefits mix
As organizations adapt their benefits strategies to a changing workforce, they’re discovering a powerful multiplier effect: When innovative benefits focused on caregiving are integrated with traditional offerings, there’s a positive impact on talent acquisition, satisfaction, and loyalty.
However, the positive boost doesn’t result from just offering more employee benefits. Instead, the impact is driven by the integration of family care benefits and other standard benefit offerings like health insurance, paid time off (PTO), and retirement plans.
Today, effective employee benefits programs mix traditional benefits with motivational benefits that closely align with challenges faced by the organization’s employee population. Examples of motivational benefits include legal plans, pet insurance, wellness plans, and commuter discounts. The motivational benefits category also includes a range of family care benefits that support challenges tied to child care, senior care, special needs care, pet care, and self-care.
Family care benefits–supporting challenges tied to child care, senior care, special needs care, pet care, and self-care–can amplify core employee benefits like PTO.
When employees have access to care benefits like Backup Care or resources that simplify the search for caregivers, they’re able to optimize their PTO for rest and relaxation, not caregiving emergencies. The impact is tangible. A study by the Harvard Business School found that access to caregiver planning, administrative, and support services reduced employee absenteeism by up to 50%.
Employees prioritize work-life flexibility
Workplace flexibility tops the list of considerations when employees make employment decisions, outranking mainstays like healthcare options and retirement plans. As more companies implement return-to-office strategies, offering workplace flexibility to accommodate the demands of day-to-day life becomes even more important.
Depending on the industry and role, flexibility can take the form of flexible schedules, work arrangements, remote or hybrid jobs, and paid leave benefits. 25% of employers now offer paid caregiver leave for employees outside of PTO days or FMLA, with another 22% considering adding the benefit in the next two years.
Beyond offering benefits to support work-life flexibility, companies must “walk the talk” by creating a workplace culture of care that enables employees to confidently flex their workday to accommodate appointments or care schedules.
Family care benefits relieve financial stress
7 in 10 Americans report feeling financially stressed and estimate that they spend up to 3 hours per day worrying about their finances at work. Employers recognize the issue, with 75% saying that their employees’ financial stress negatively affects the company’s operations.
Traditional employee benefits, including medical, disability, and accident insurance, are designed to help alleviate the financial burden of rising healthcare costs and unexpected expenses. However, they don’t address ongoing budget concerns related to child care, senior care, or pet care.
Caregiving responsibilities play a significant role in how employees assess their financial well-being.
Child care costs continue to place a significant financial burden on families, with parents spending an average of 22% of their household income on child care alone, according to our annual Cost of Care Report. The financial strain doesn’t stop there—caregiving expenses extend beyond children, with families allocating an additional 18% of their income to care for aging loved ones, pets, and household needs.
To afford these rising costs, one-third of parents (33%) said they had to dip into their savings, and 20% went into debt.
The escalating cost of senior care is another major stressor, with families now dedicating more than three times the inflation rate toward caregiving expenses. Among the “sandwich generation,” comprised of Gen X and older Millennials with senior parents and children under age 18, 87% report having caregiving responsibilities for an aging relative and minor children. Nearly half (47%) of these sandwich-generation caregivers say they have faced situations when their household was unable to meet essential expenses due to caregiving costs.
These financial realities make family care benefits a key consideration as employees weigh decisions to seek a new job or stay with their current employer. Last year’s Future of Benefits report shows that 1 in 5 employees have left a job because their employer didn’t offer family care benefits, and 21% of employees say they would switch jobs to gain access to senior care benefits.
Along with access to caregiving support and vetted caregiver options, care spending accounts can be a valuable addition to an employee benefits program. These flexible accounts give employees a financial resource for both planned and unplanned caregiving needs. Employers can define the types of expenses covered, including child care, senior care, pet care, and self-care, based on their employee population’s needs. Employees are interested. Nearly one-third of employees rank these types of cash subsidies for caregiving as the top family care benefit they don’t currently have but would definitely use if available.
Extending the effect of family care benefits
As employers explore options to optimize their benefits programs and meet the evolving needs of Gen Z and Millennial employees, many are considering family care benefits. These benefits go beyond traditional offerings, helping employees manage caregiving responsibilities, reduce financial stress, and improve work-life balance.
In addition to being highly valued by employees, family care benefits effectively complement other workplace benefits, including:
- Expert care support provides employees with guidance and resources to help them navigate life’s big or small challenges–whether it’s help managing care for an aging parent or researching gluten-free bakeries in their area.
- Discount programs offer savings on everyday expenses like travel, financial services, wellness programs, and household essentials, helping employees reduce financial stress.
- House care support connects employees with trusted professionals for services like housekeeping or organization, freeing up time for personal and professional priorities.
- Pet care services help employees find pet sitters, dog walkers, and other pet care solutions, ensuring they can work without worrying about their furry family members.
Modernize your benefits strategy today
From traditional core benefits to outside-the-box solutions, today’s workforce expects benefits that work together to support their real lives. By thoughtfully integrating family care benefits with existing offerings, organizations can deliver meaningful solutions—and amplify their impact.
As employers explore options to optimize their benefits programs and meet the evolving needs of Gen Z and Millennial employees, many are considering family care benefits. In addition to being highly valued by Gen Z and Millennial employees as a tool to improve work-life balance and reduce financial stress, care benefits effectively complement other benefits available through the workplace.
To explore care benefit solutions and how they fit in your strategic benefits program, request a meeting with the Care for Business team today.
