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Posted February 20, 2008 The full Governing Management Letter | Subscribe to The Governing Management Letter Bonus columns: GIRARD MILLER’S BENEFITS BEAT Benefits for Younger vs. Older Workers Questions, success stories or anecdotes about benefit issues in government? A new report by the Segal company reveals fresh insights into the factors that motivate public employees of various ages. Public managers are wise to pay close attention to these findings, because they suggest that money is seldom the answer. The report sets forth five major categories of work satisfaction and motivation: pay, benefits, work content, career enhancement and organizational culture. As often reported elsewhere, pay proves to be the least motivating of the five factors! Work content gets the highest ratings, and career enhancement is a runner-up for younger workers. Benefits are second-place in the overall scoring, with roughly equal importance to workers young and old. For those familiar with public service, this may not come as a surprise.
Key motivational differences between older and younger workers are worth noting, as personnel managers and operating managers in government will need to differentiate their strategies depending on where talents are most needed. First of all, it is generally the case that younger public employees are more satisfied with their organizations than older workers are. This includes many factors, such as the overall level of pay, the way pay is decided and communicated, and the raises received most recently. This may reflect an element of idealism and less cynicism than their older counterparts who have hit the top of their pay scales. Older workers are also likely to be more conscious of their career immobility and income limitations, and thus are focused more on financial security, especially health and retirement benefits.
Younger workers are also much more satisfied with the amount they must contribute toward health benefits, even though most employers do not differentiate by age. This could reflect higher actual expenses among older workers who pay more out-of-pocket for recurring medical expenses, whereas one-time pregnancy expenses tend to be the major cost factor facing younger workers. So what can public managers learn from the Segal findings? Here are two observations: Younger workers care most about their career, including training and job content. They want to be engaged in their work and not just put in their hours — although they also don't want to sacrifice their extracurricular lifestyle with extraordinary working hours. They rate these career factors highest in importance, yet lower in satisfaction than their elder colleagues. Thus, savvy managers will focus more attention on deeper professional interaction and providing challenging assignments to younger workers. Older workers are less concerned about career development, presumably because they have already "settled in" and are more focused on bread-and-butter benefits such as retirement plans. Efforts to address retirement income security among older workers, by providing selective incentives to remain productively employed, will likely result in better retention of the workers that managers want to keep. All this suggests that targeted incentive-based retirement benefits may have a new role in HR management. This can be accomplished most easily through individually customized defined contribution incentives with retention-friendly vesting requirements. Last month: Girard Miller, an analyst of benefits and investments with 30 years of experience in the public, private and nonprofit sectors, can be reached at Girardinmalibu@charter.net. His general market observations and institutional investment strategies are his own and should not be construed as investment advice or recommendations concerning specific securities. More biographical information. © 2008, Congressional Quarterly, Inc. Reproduction in any form without the written permission of the publisher is prohibited. Governing, City & State and Governing.com are registered trademarks of Congressional Quarterly, Inc. |
Most public servants don't start out in government for the pay, but they care about sufficiency of their benefits — which are often viewed as "making up" for lower pay. And work content and career development are now recognized as having financial value long beyond this month's paycheck, especially for younger workers. 