In the words of Jessie J (well almost!) its not about the money when it comes to employee benefits, certainly not when we want to think about retaining Generation Y talent and beyond. An HBR article (How Gen Y & Boomers will reshape your agenda -2009) talks about a ‘rewards remix being both challenging and liberating’ which is good news for the overall budget but requires some creative thinking in terms of the overall benefits package. OK, I am not sure that we need to go as far as trying ‘to make the world dance’ but providing the access to health and leisure facilities and opportunities to ‘give something back’ may not be so far off the mark! It seems that organisations would benefit from thinking a little more creatively and systemically if they want to leverage the best value from their benefits packages. 

Flexibility is likely to continue to be the most important driver for Generation Y as they move into their 30s. With the increasing likelihood of having two full time workers in the family, flexibility to manage childcare becomes paramount.

However, few organisations have developed the skills and technologies to manage a flexible workforce. Increasing numbers may provide ‘ flexible benefits’ in the form of holiday buy-back or choose your own healthcare package. However, it is likely that access to these kind of benefits alone will become akin to Herzberg’s ‘hygiene factors’ of the future – an absence of them will cause people to complain, but they will not provide long term motivation.

Culturally, there are plenty of workplaces out there where performance is still measured by presenteeism rather than basing it on performance outcomes. Generation Y want to be rewarded on outputs not hours and value explicit performance evaluation and feedback above remuneration. However, many managers lack the skills, confidence and/or technology to effectively manage the performance and accountability of a mobile workforce.  Employee performance management has a way to go before it becomes an ongoing, interactive and empowering way of working, and most organisations need to upskill their managers pretty quickly to deliver this well.

HR technology will play a huge part here, again as an enabler, rather than a motivator. I am still shocked at how many new organisations default to giving people desktop computers rather than access to laptops.  This is effectively gluing people to the office and preventing access to that opportunity to work remotely that can be beneficial for both parties. The next step on technologically of course is giving people the access and skills to collaborative communication technologies for mobile and flexible working and web based performance management tools. Used effectively between manager and employee it will enable flexibility, while still providing a clear focus on performance, enabling outcome based reward.

There are some really creative solutions starting to appear from reverse mentoring (Gen Y being the tech mentors of the baby boomers) and using time as a benefits currency. It seems therefore that the benefits package of the future needs to be more than a shiny new website and some recognition points or vouchers to motivate generations of the future. It will reach beyond HR and should incorporate IT strategies and organisational development. That should help us to retain our talent and enable high performance – but to get it in the first place, I suspect it will still be all about the money….!