September 2013

Talking About My Generation: Exploring the Benefits Engagement Challenge About this report Foreword This report provides human resources (HR) professionals and senior reward For the first time in history, we are witnessing up to five generations working managers with a new and compelling way of thinking about how to use alongside each other in the workplace. These generations share the same employee benefits packages to more effectively engage the different generations managers, rub shoulders in the same spaces and collaborate on the same within today’s workforce. projects — but this is where the similarities end.

Through the lens of generational science, this report offers a unique insight With the age gaps between these individuals reaching up to 50 years, we now into the modern multigenerational workforce — a workforce which, for the first see just how far apart the values, drivers and needs of these different generations time in history, comprises five generational cohorts:Maturists (born pre-1945) can be. Whereas the stability of family and home ownership has been a priority Baby Boomers (born between 1945-1960), Generation X (1961-1980), Generation Y (1981-1995) for older generations, many of those entering the workforce now and in the past decade prioritise and Generation Z (born after 1995).1 travelling the world over saving for a mortgage deposit.

Yet identifying these trends is only to begin to notice the symptoms; If we dig just a little deeper To produce this report, Barclays commissioned Dr. Paul Redmond (pictured), a leading and investigate the underlying causes, the reasons for these stark differences become clearer. generational expert at the University of Liverpool. During 2013, Dr. Redmond conducted in-depth Generation Y is living with parents longer due to the high cost of living and increasing student research, which included a survey of over 1,200 employees and a series of six focus groups at debts, whilst Baby Boomers are “sandwiched” between financial commitments to elderly relatives a range of leading organisations, including Fujitsu, Langland and Nuffield Health, to compile and children struggling to get onto the property ladder. Perhaps then it is no wonder that priorities the findings within this report. Supplementing the focus groups were individual interviews with may feel centuries, rather than decades, apart. managers and senior HR professionals.2 As we set out to uncover through Talking About My Generation: Exploring the Benefits Engagement Using a blend of quantitative and qualitative research methods, this report explores the financial Challenge, the rise of the multigenerational workforce presents numerous challenges to today’s aspirations, concerns and priorities of the three largest generational cohorts within today’s HR professionals when devising benefits packages to engage and attract employees. For the past workplace — Baby Boomers, Generation X and Generation Y — and considers how HR decade, a “perfect storm” has been raging in the workplace that has brought together a professionals can use this insight to create employee benefits packages to better meet the confluence of economic uncertainty, global competition, falling prices, ubiquitous and ever- needs of the different generations. evolving technology, and shortages in staff and resources.

For organisations, understanding these generational differences is a key business imperative, particularly when devising and implementing organisational engagement strategies. In a post- recession workplace, where employee loyalty is undergoing a fundamental shift, what do employers need to do to ensure that they are meeting the needs of all their employees, at every stage of their lives?

In this report, we explore the key characteristics of three of the five generations that make up the majority of today’s workplace and investigate whether traditional approaches to employee benefits Why read this report? are fit for purpose. Using in-depth research amongst the three generational cohorts and focus groups conducted with a number of high profile U.K. organisations, we pose the pertinent questions facing • Because your benefits programme is probably not meeting the needs of everyone in HR professionals now: How can organisations implement employee benefits packages that meet the your workforce — the modern workplace is evolving in ways we have never seen before differing needs of the generations in today’s workforce? And what is the cost of getting it wrong? • Because a benefits scheme that meets the needs of the different generations in your workplace will achieve better outcomes for you and your employees We would like to extend our sincere thanks to Dr. Paul Redmond for all of his work in developing this research report, and hope that our readers find it a unique and thought-provoking read. We • Because many have paid lip service to the “generation issue” but being aware isn’t look forward to sharing with you our continued work and insight on these issues. enough, you need to take action

1 Actual dates for the different generational cohorts differ slightly, particularly when comparing U.K. with U.S. research. In holistic terms a generation has been defined by Strauss and Howe (1991) as being the aggregate of all people born over a span of roughly twenty Katharine Photiou years, or about the length of one phase of life, e.g. childhood, young adulthood, middle-age, etc. For the purposes of this study we Director have standardised these timescales using the most commonly applied definitions. 2 Further details of the methodology can be found at the end of the report. Barclays

3 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies Executive summary In designing this report we set out to explore Below is a summary of the key findings five key questions: related to our five key questions:

Does the current employee benefits structure suit Does the current employee benefits • Baby Boomers were the least demanding structure suit the needs of the vast generation in terms of their employee 1 the needs of the vast majority of the workforce? 1majority of the workforce? benefits, with 71% valuing their company pension scheme, 48% valuing health care Too inflexible for today’s employees and 57% valuing opportunities for career How do these needs contrast and compare between Despite that almost six-out-of-ten employees development. Most of the benefits packages from all generations claim that the availability we surveyed benefited the Baby Boomer 2 the three key generational groups? of a comprehensive benefits package is a key generation (after all, they designed them). factor when looking for a new job, 85% of those surveyed felt that their current employee • Generation X places importance on company Is the language and media used to explain employee benefits packages failed to provide the support pension schemes with 77% valuing this and flexibility required to meet present and benefit, and is also focused on managing 3 benefits appropriate for the growing Generation Y future financial needs. work-life balance, with 69% valuing flexible workforce? In what ways could it be better fit for purpose? working hours. Paying off the mortgage and Our survey revealed 86% of Baby Boomers and spending more time with the family are major 87% of both Generation X and Generation Y concerns for 41% of Generation X employees found their current benefits respondents, as is saving for retirement (30%). Will the current employee benefits structure be obsolete packages were too inflexible to meet their 4 in five years as the generations in the workplace shift? needs. This is a major finding and suggests that • Generation Y is focused on securing across all industries and sectors a serious opportunities for career advancement and discrepancy currently exists between the taking on more responsibility, with 64% citing Building benefits packages for the multigenerational benefits packages provided by employers, and ongoing career and personal development as the actual needs of employees. most important to them. Nearly two-thirds, 5 workforce —what’s the cost of getting it wrong? 65%, seek financial education and guidance. More financial guidance needed at work Financially, Generation Y faces significant Despite recognising the value of work-based barriers, as 29% currently prioritise getting on financial guidance, we found that over 90% of the housing ladder and 30% paying off debts. employees from all generations had no access These financial barriers are likely to become to any form of work-based financial guidance. increasingly evident over the coming years.

How do these needs contrast Generation X and Y crave financial guidance and compare between the three We discovered that Generation X and Y are 2 key generational groups? particularly responsive to the idea of being able to access a personal banker and mortgage Talking about my generation adviser while at work. Our focus groups Distinct generational characteristics have been discovered Generation X managers who were found to exist within the workforce, which in being kept awake at night worrying about turn influence the way that employees engage pensions and mortgages, and talented with their organisation. These characteristics Generation Y professionals who were resigned are especially apparent when the focus turns to not being able to afford a mortgage until to employee benefits packages: their early forties.

4 5 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies

Is the language and media used Will the current employee benefits Building benefits packages for the Calculating the returns on investment to explain employee benefits structure be obsolete in five years as multigenerational workforce — Further still, if tailored to the specific 3 appropriate for the growing 4 the generations in the workplace shift? 5 what’s the cost of getting it wrong? aspirations, priorities and objectives of each Generation Y workforce? In what ways generation, benefits packages can be highly could it be better fit for purpose? Flexibility and choice Not the Boomers’ world effective in enhancing employers’ engagement When employees were asked to describe their Our research reveals that 12% of Generation Y strategies. Organisations with high levels of The limitations of e-mail ideal future benefits packages, few in the focus respondents are so dissatisfied with their engagement have 40% lower employee Our research found that e-mail (45%) and staff groups were able to see beyond their current current benefits package that they have turnover rates than companies with low levels intranet (41%) are still the most popular ways provision. “Flexible” and “more choice” were considered moving to a different organisation. of engagement.5 In addition, Total Shareholder for companies to communicate their benefits to the main responses. This indicates the emergence of a new Return (TSR) at these organisations has been employees, compared to seminars (20%) and Generation Y “psychological contract” which calculated as being 42% higher than their one-on-one meetings (13%). The result: Back to your future will rewire the way that future generations of competitors. Employees with the highest confusion. One in five Generation Y respondents Although the majority (80%) of employees employees engage with their employers: The levels of engagement perform 20% above said that in the past year they have been across all generations expect their employer to role of the employer will shift from being a average, while being 87% less likely to leave confused about what employee benefits they provide a comprehensive benefits package, we benefits “provider” to a benefits “enabler.” their organisation.6 have or are currently entitled to, and separate found that relatively few employees have a clear studies show that 63% of employers think their sense of the type of benefits package that If you build it, they will come A toolkit for HR professionals benefit communications are ineffective in would best suit their future needs. Helping staff If the costs of getting it wrong are high, the Workplace generations need and expect helping staff make the right benefits decisions.3 visualise their future selves — particularly in reward for offering the right benefits packages to tailored benefits packages. Based on terms of the financial challenges they are likely the right generational groups can be significant. generational profiles, there are a number of “Digitally detoxed” to face in the future — can be a highly effective Research shows that employees who are recommended products and methods of From our survey, we found more than 50% way of overcoming this obstacle. satisfied with their benefits packages are also communication for each generation that can of employees of all ages now use the Internet more likely to be loyal to their employers and arm HR professionals with the tools they when sourcing financial information. However, engaged with their organisations.4 need to boost employee engagement. counter to claims about the rise of the “digital native” generations, our focus groups discovered widespread support for face-to-face interventions and personal engagement amongst Generation Y.

4 “Benefits and the coming employee retention crisis,” Trends E-Magazine, October 2011 3 Meza, K., “New Guardian study shows employers’ ineffective benefits communications compromise employee engagement,” 5 Hays Group, “The Loyalty Deficit,” November 2012 Guardian publications, 2012 6 P.A. Consulting, “Engaging your employees to drive superior organisational performance,” 2013

6 7 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies Introduction

As today’s workplace can now contain up to For HR professionals, this shift in the Although rarely do such conditions exist in employees can expect a Total Shareholder five different generations working alongside psychological contract presents numerous today’s workplace, these assumptions are often Return (TSR)12 that is around 42% higher than each other, the issues facing HR professionals challenges. Moreover, instead of there being to be found in benefits and rewards packages. organisations in which benefits packages and in engaging this disparate workforce are one dominant psychological contract between talent are misaligned. undoubtedly becoming more complex. Add to employer and employee, there are now several The economic benefits of engagement this the wider changes that have taken place in — one for each generation. Continuing with a one-size-fits-all approach is The emphasis on employee talent is significant. the employment and economic landscape over self-defeating. The advantages of an engaged PA Consulting found that organisations which recent years — the various periods of boom Employee benefits packages: workforce reach beyond the organisation, took steps to segment the workforce into and bust, inflation, innovation and technology one-size doesn’t fit all leading to increased shareholder value10 in distinct talent groupings exhibited significantly improvements — and the challenge of using The advantages of an effective compensation many cases, and the benefits that employers higher levels of TSR than organisations in which employee benefits to meet the needs of and employee benefits strategy are well known. offer to their employees play an important role a blanket approach to benefits and engagement different generational cohorts within the Yet research has found that fewer than in this engagement. According to research by was the norm. Thinking of the workforce as workplace is no small feat. four-in-ten employers thought their PA Consulting11, organisations which distinct groups or cohorts clearly pays organisation’s benefits packages were successfully align benefits packages to the dividends. So what do the different generations In order to unravel this task now lying ahead of “effective” in terms of helping the organisation aspirations and needs of their most talented in today’s workplace look like? organisations, it is important to first explore engage more effectively with different groups of some of the primary dynamics of employee workers — a response which was echoed by engagement and benefits. their employees.8 Speaking about her past Auto-enrolment research into this subject, Lesley Uren from PA Another challenge facing HR professionals, becomes more widespread, levels of The new psychological contract(s) for a Consulting told us: and one which has had an impact on engagement could continue to fall, with multigenerational workforce employee benefits and rewards systems, younger generations in particular, taking it The term “psychological contract” is defined as: “We had a hypothesis that HR professionals is auto-enrolment in pensions. Across the for granted or even choosing to opt out “…. the perceptions of the two parties, who were creating an employee proposition for workforce a range of opinions currently exist altogether. As a consequence for employers, employee and employer, of what their mutual talented workers were coming from the on whether auto-enrolment will lead to an such benefits are likely to have reduced value, obligations are towards each other.”7 and in the perspective of their own experiences rather than increase or a reduction in the value of particularly in terms of providing 20th century, the psychological contract focusing on what really mattered to people at employee benefits packages. an incentive when recruiting and retaining between employers and workers was different stages of their careers — and that they key talent. epitomised by the clear and standardised were missing a trick. We discovered that there was Evidence from countries where auto- rewards structure that could be found in most a big disconnect between what employers were enrolment has been operational for several This presents an interesting challenge organisations. In return for commitment and offering and what employees were looking for.”9 years suggests that while it has pros and and one which will be explored further in loyalty, employees could expect to receive from cons, it is particularly effective at increasing Section 2: For auto-enrolment to become their employers a range of benefits and rewards. So why are some HR professionals dissatisfied enrolment amongst younger generations. an effective engagement strategy (as At the core of this “contract” was a with their own benefits packages? The answer, But academics have found that high levels opposed to an additional cost) commitment to job security. it seems, is to be found in the last century. of enrolment do not equate to high levels communicating its benefits and value of engagement. In fact, as auto-enrolment across all workforce generations is critical. In today’s multigenerational workplace, the Traditional benefits packages were developed in psychological contract is more complex. Few the 20th century under radically different organisations can provide that level of job economic and social conditions. Even today, 7 The Chartered Institute of Personnel and Development (CIPD) Factsheet, July 2013, http://www.cipd.co.uk/hr-resources/factsheets/ psychological-contract.aspx security. At the same time, the structure of job many benefits packages still reflect a “one-size- 8 Meza, K., “New Guardian Study shows employers’ ineffective benefits communications compromise employee engagement,” roles has changed. As a result, the fits-all” 20th century attitude — an attitude Guardian publications, 2012 9 Lesley Uren, PA Consulting, conversation with author, 24 July 2013 psychological contract has changed, becoming informed by large workforces, pyramid-shaped 10 Ibid. less paternalistic and more transactional. management structures, multiple layers of 11 PA Consulting, “Engaging your employees to drive superior organisational performance,” 2013 12 PA Consulting defines Total Shareholder Return (TSR) as “the percentage change in the value of an investment in the shares management and long-term job security. of a company from Year 0 to Year 5 when dividends are invested in those shares.”

8 9 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies

Section 1

Talking about my generation From an HR professional’s perspective, the 21st century organisation is a complex place in which to operate. Changes in the statutory retirement age and the “flattening out” of “Employers must now address the organisational structures have meant that the workforce now comprises not one, but several competing generations, each with fundamental landscape change in its own priorities, preferences and concerns. If managers are to workforce requirements and demands.” engage effectively with their new multigenerational workforces, Zain Wadee13 it is essential that they understand each generation’s defining characteristics. From this they will be able to develop and promote benefits packages which meet the actual needs of all employees, regardless of their age.

Generations at work The workforce now At the core of generational theory is the idea that each generation is shaped or given its comprises not one, unique generational outlook by the prevailing social, economic, political and cultural events but several competing which take place during its formative years. Only by understanding these historical events generations, each or prevailing assumptions is it possible to with its own priorities, decipher a generation’s key characteristics and its own unique outlook on life. preferences and Chart 1 gives a brief summary of some concerns. of the defining characteristics of the five at-work generations.

13 Wadee, Z., “Generations X and Y are different, so tailor your benefits accordingly,” HRM Magazine, 4 April 2011

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Chart 1: An overview of the working generations

Maturists Baby Boomers Generation X Generation Y Generation Z Characteristics (pre-1945) (1945-1960) (1961-1980) (1981-1995) (Born after 1995) Formative experiences Second World War Cold War End of Cold War 9/11 terrorist attacks Economic downturn Rationing Post-War boom Fall of Berlin Wall PlayStation Global warming Fixed-gender roles “Swinging Sixties” Reagan / Gorbachev Social media Global focus Rock ‘n’ Roll Apollo Moon landings Thatcherism Invasion of Iraq Mobile devices Nuclear families Youth culture Live Aid Reality TV Energy crisis Defined gender roles — Woodstock Introduction of first PC Google Earth Arab Spring particularly for women Family-orientated Early mobile technology Glastonbury Produce own media Rise of the teenager Latch-key kids; Cloud computing rising levels of divorce Wiki-leaks Percentage in Currently employed in U.K. workforce* either part-time jobs or 3% 33% 35% 29% new apprenticeships Aspiration Freedom Security Home ownership Job security Work-life balance and flexibility and stability

Attitude toward Early information “Technoholics” – entirely dependent Largely disengaged Digital Immigrants Digital Natives technology technology (IT) adaptors on IT; limited grasp of alternatives

Attitude toward Early “portfolio” careers Digital entrepreneurs — Organisational — careers Career multitaskers — will move Jobs are for life — loyal to profession, not work “with” organisations seamlessly between organisations career are defined by employers necessarily to employer not “for” and “pop-up” businesses Signature product Google glass, graphene, nano-computing, Automobile Television Personal Computer Tablet/Smart Phone 3-D printing, driverless cars

Communication media

Hand-held (or integrated into Formal letter Telephone E-mail and text message Text or social media clothing) communication devices Communication preference Face-to-face ideally, but Online and mobile Face-to-face Text messaging or e-mail Facetime telephone or e-mail if required (text messaging) Preference when making financial decisions Face-to-face ideally, but Online — would prefer Solutions will be digitally Face-to-face meetings Face-to-face increasingly will go online face-to-face if time permitting crowd-sourced

*Percentages are approximate at the time of publication.

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Generational wealth distribution Summary of key points The distribution of wealth amongst generations is particularly unequal and reflects the wider economic shifts discussed earlier, which in recent years have had a far-reaching impact on society. generations are currently Each generation retains A generation ago, wealth tied up in housing was worth less than wealth linked to pensions. Now its own generational housing wealth is worth double: One reason, perhaps, why Generation Y is so keen to get on the 5 working together in the “characteristics” and housing ladder (see Section 3). workplace — the largest assumptions. At work, generational differences generations of which are Baby influence the “psychological Boomers (33%), Generation X contract” between different (35%) and Generation Y (29%). generations of employees and their organisations.

Financially, Baby Boomers remain the most affluent Nationally, the majority generation, with significant investments and savings. of wealth and assets Aiding this group are the are owned by the Baby majority of employee benefits packages, which Boomer generation. Due to a large extent were built by Baby Boomers for Baby to the economic downturn, Boomers. As such, Baby Boomers have the most to this is unlikely to change gain from maintaining the status quo. in the near future.

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Section 2

Overview of the findings Question 1: Does the current employee benefits structure suit the needs of the majority of the workforce?

Section 2 takes an in-depth look at our research findings as Mapping the current benefits landscape As expected, the majority of employers provide From our research, it is apparent how clear company pension schemes and ongoing staff they relate to five key research questions. In particular, this differences exist between the three workplace training and development. Due to auto- section explores what each generation wants and expects from generations. Each generation has its own enrolment, all employers will have to provide priorities and needs — particularly when it workers with a workplace pension scheme employee benefits, using the rich data generated from the focus comes to financial planning. To assess whether by law over the next few years, so it is not groups, interviews and questionnaire survey. the current employee benefits structure meets surprising to see that almost seven out of ten the needs of the majority of the workforce, and are currently doing so. generations, we began by mapping the current benefits provision across the workforce. To put What is noticeable is that relatively few this in context, we know from our research that organisations are providing benefits 85% of survey respondents expected their packages consisting of childcare support, “I’m suspicious of “I don’t have time...” employers to provide financial benefits, support private health and dental care, and health Generation X and information. Another third expected basic and wellbeing services. telephone banking. level benefits such as pensions and competitive pay. An equal proportion expected their From this, our research set out to explore how All your life is on employer to provide a full range of benefits, many less common benefits packages were including easy access to preferential-rate loans. available in today’s organisations. Such benefits that phone. If you “I do all my But to what extent were these expectations would typically include “Save as You Earn” being met? (SAYE) plans, financial guidance, preferential lose it, that’s it. banking online banking products and help toward obtaining a We started by looking to see if the benefits mortgage. As the research shows, such Your whole life on my smart that might be considered to be more additional benefits are highly popular with commonly available to employees in the employees, but despite being available in some is gone.” phone.” workplace (e.g. company pension schemes, organisations, comparatively few of these Baby Boomer ongoing staff training and development benefits have become broadly established in Generation Y opportunities) were actually being delivered. today’s workplace. Chart 2 illustrates which of these benefits our 1,200 respondents said were available in their By reviewing the current employee benefits organisation, and which were not. landscape, we know what benefits the current generations have available to them in the workplace, but what benefits do theywant?

Please note: For the purpose of this report, we have opted to focus on the three largest of currently working generations: Baby Boomers (born between: 1945-1960); Generation X (1960-1980); and Generation Y (1980-1995). Nevertheless, for reference purposes, Chart 1 provides a brief overview of the preferences and characteristics of the oldest generation currently at work — the Maturists (born before 1945) — and Generation Z (born after 1995).

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Chart 2: Benefits available to all employees* What do the different generations want from benefits packages?

Company According to our research over 85% of — perhaps because so many of these packages pension scheme 67% employees from all three generations do not reflect the economic conditions which prevailed Ongoing training & personal feel that their current benefits package offers during their formative years. 60% development programmes Benefits more commonly available the flexibility required to suit their needs. So Holiday what do the different generations look for from Generation Y also desires ongoing career 52% flexibility benefits packages — and how do these development opportunities and the chance to requirements differ? work flexibly. Financially, this is the generation in Opportunities for flexible working 45% (e.g. working from home/flexible hours) most need of financial education and guidance Respondents to our survey told us that — particularly in terms of choosing mortgages Retail discounts and/or priority competitive pay and other financial rewards and making decisions around savings and employee purchase programmes 40% remain the leading requirement in any benefits investments. Generation Y — über digital natives Competitive pay package. For reasons that will be discussed — value help and guidance which is provided 36% and bonuses later, pay is marginally more important for not online but on a face–to–face basis, and Childcare support Generation X than it is for either of the other ideally in their workplace. According to Lesley 30% (e.g. childcare vouchers) two generations. Uren from PA Consulting, Generation Y is typically looking for more transactional benefits, Opportunities to engage in the wider Next is a company pension scheme. For the community through projects/volunteering which fit around their own priorities and goals: 27% majority of those surveyed, pensions were of Private health crucial importance — particularly for Generation “For Generation Y, the benefits 24% and dental care X. Generation X also values flexible working and which count are generally linked Health and wellbeing services access to career development opportunities. 23% (e.g. health check, gym membership etc.) This is a generation that wants to develop its to learning and opportunities for career and professional skills, but only when seeking out new challenges — Life 19% insurance the time is right for them. access to education and further training. And any help that can be Share plans and Baby Boomers, meanwhile, value health care and save as you earn provided to help them navigate 14% Benefits less commonly available ongoing career development. When it comes to Car scheme/ employee benefits packages Baby Boomers are their way around the housing 12% cash equivalent the least demanding of the three generations market will be very popular.”14 Flexibility to mix and match benefits 11 % to suit my own personal circumstances Access to saving and investments Share-ing in success 7% (e.g. ISAs, loyalty saving schemes etc.) The research shows that access to share plans and save as you earn schemes is popular with all three generations — one in three employees across the board welcome this benefit. And it’s Financial 6% guidance easy to see why. Take the example of Sports Direct. It announced this year that employees would share in a huge windfall from the company’s share scheme — the largest payout in Banking products with preferential rates history. The award was linked to the firm’s performance and saw staff share a pot of £88 million (e.g. preferential mortgage/loan rates) 5% of shares — an average of about £30,960 each. When combined with the payout made in 2012, Financial permanent staff received average share awards of £43,860 — more than double the average 5% education salary. Sports Direct’s CEO called the scheme “an absolute game changer” in terms of its impact *Data taken from the following Access to a personal banker/banking YouGov survey question: Does on staff retention and service in stores. A recent study by industry body ifs ProShare reported services through the workplace your company provide any of that the number of employees participating in employee share ownership schemes is on the rise, 4% the following support/ benefits packages to employees? despite ongoing pressure on disposable incomes. According to the survey, the number Help toward a deposit of employees with save as you earn schemes rose by more than 150,000 in 2012.15 2% for your mortgage Source: YouGov

0% 100% 14 Lesley Uren, PA Consulting, conversation with author, 24 July 2013 15 ifs ProShare annual SAYE (Save As You Earn) survey, published June 2013 18 19 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies

Chart 3: Benefits most important to the different generations in the workplace

Company pension Financial education Help with Access to savings and Share plans and save Preferential banking products and scheme and guidance mortgage deposit investments as you earn personal banker in workplace Company pension schemes For Generation Y, the Faced with Generation Y are most Consistently across all Equally, products to help them manage are popular with all three benefits which really count numerous hurdles interested in savings three generations, one their finances as well as on-site financial generations but are a greater are linked to learning and to joining the and investments as they in three employees want guidance is particularly important to focus for Baby Boomers opportunities for seeking property ladder, juggle the pressures of access to share plans and 90% Generation Y. They value face-to-face and Generation X out new challenges — help with mortgage student debt and saving for save as you earn schemes interaction for major financial decisions 84% access to financial deposits is a priority mortgage deposits education and guidance for Generation Y 80% is particularly desirable 82%

73% 77% 69% 70% 71% 66% 71% 67% 64% 65% 65% 60% 60% 57% 59% 59% 48% 50% 47% 48%

46% 39% 40% 36% 40% 43% 43% 42% 34% 36% 36% 36% 36% 38% 33% 37% 34% 33% 30% Key 34% 33% 33% 31% 26% *Data taken from the following 24% 25% 25% 23% Baby Boomers YouGov survey question: 28% 22% Assuming for a moment that 21% Generation X 20% your employer was able to offer 24% 19% 20% you each of the following, how Generation Y 21% important would they be to you? 19% 18% Source: YouGov 17% 16% 15% 10%

Competitive Ongoing Holiday Company Flexible Financial Ability to Private Help with Health & Retail Savings & Childcare Life Share plans Preferential Opportunities Personal Car pay & training & flexibility pension working education or mix and healthcare mortgage wellbeing discounts investments, support insurance & save as banking to engage banker in scheme/ rewards personal guidance match deposit services e.g ISAs you earn products in the wider workplace cash development benefits community equivalent programmes through projects/ Summary of key points volunteering Apart from competitive pay and pension schemes, an For Generation Y, this is becoming a growing area of “aspiration gap” is emerging in the workplace, whereby concern, with 16% reporting that they are frustrated the benefits each generation wants from its employer are by the lack of benefits that suit them, their family and not necessarily those which are being delivered. their life stage.

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Question 2: How do the current needs of the workforce contrast and compare between the three key generational groups?

Another objective of this study was to find out more about the current financial priorities of employees and how these might vary between generations. A summary of the findings is presented below.

The importance of on-site guidance Being able to manage their accounts, organise “It’s only because she (the nail technician) visits and the lack of inter-generational For Generation Y — and to some extent, loans, have access to flexible overdrafts and the office every fortnight that I get my nails comprehension she faces when trying to Generation X — the option of having access oversee their children’s accounts — all while done — she’s there in the office. I wouldn’t get explain her predicament to her parents: to personal, on-site financial guidance was of at work — was hugely attractive to those we my nails done every two weeks otherwise.” crucial importance. From the focus groups, it talked to. “My parents say to me, ‘Why don’t you buy? became clear that levels of financial literacy Just under half of Generation Y respondents Renting is dead.’ But they don’t understand how amongst younger workers are comparatively One Generation X manager saw a parallel thought that having their employer provide much money you need to put down a deposit: low. Few had received financial education between the availability of on-site financial help with a mortgage deposit was desirable. £25,000, £30,000… They bought a house for while in school or university: advice and her firm’s in-house nail technician. Mortgages and house-buying were important £9,000 and keep saying how they never went Her point was that if the service wasn’t topics in each of the focus groups and is clearly out and had to scrimp and save. But it’s not “There was no financial education at school. available to her during the daytime, when and a major preoccupation with this generation. like that now. We still want to go on holiday We need to know what the pros and cons where it suited her, it would be unlikely that she One young woman spoke of the dilemma she every year.” are when you’re making financial decisions.” would be able to afford the time to make use of faces when considering to buy a house — Generation Y focus group respondent the service beyond work-hours. For her and others, convenience was the major factor: “Credit rating? No one told me. I never check my bank statements.” Generation Y focus group respondent

Levels of trust in online financial services are low across all generations, and since the economic downturn there are heightened levels of concern that people can be “sold” inappropriate financial products. But locating a financial service within the workplace has generation-wide support — partly because it associates the financial provider with the employer.

Despite perhaps having less of a need for these services during this stage in their lives, a quarter of all Generation Y respondents in the survey felt that having banking services, including personal bankers in the workplace, would be an important feature in any benefits package. After all, this is the “Me plc” generation: Personal services which are customised around their own preferences and availability is essential. It is also worth noting however, that onsite financial services also appealed to the time-pressed Generation X.

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Summary of key points

Mixing and matching benefits Online Applications and IT In particular, we discovered Almost half of Generation Y respondents (47%) For Generation X and Y, the option of being The financial needs were attracted to the idea of being able to mix able to access their financial data and accounts that when it comes to and match their benefits to suit their individual via online apps was very attractive — this of each generation financial planning and needs. Slightly fewer (43%) Generation X was in addition to the value they attached to respondents also said this was important (at face-to-face meetings. Online applications differ considerably making the most of financial 37%, this option was noticeably less popular offered considerable advantages to both across the workplace. benefits packages, with Baby Boomers). One of the reasons for this generations, particularly in terms of being able Generation Y lacks key appears to be that conceptualising benefits into to manage their accounts when required. While over half (53%) discrete options, which in turn can be We found that the younger the respondents conceptual “building assembled around personal aspirations and were, the more favourable they were to of baby boomers are blocks” — a deficit goals, makes it easier and less daunting for online applications. Of those who responded employees to understand. Dr. Greg B. Davies, to our survey, 60% of Generation Y saw mobile prioritising saving which could potentially Head of Behavioural Finance at Barclays told us: apps as “desirable” or “very desirable,” leave younger workers compared to 54% of Generation X and 50% for retirement, the “Whilst a complete solution to financial of Baby Boomers. confused, disorientated planning can seem dauntingly complex, there is majority (41%) and disadvantaged in the no reason why it has to be approached as an all workplace. or nothing problem. Providers should remove of Generation X is the complexity by dismantling the problem into a clear, ordered sequence of small steps, each focused on paying Employers are increasingly taking little incremental time and effort, each building on the last.” off their mortgage. engaging with this generation through ongoing training For Generation Y, opportunities and access to meanwhile, they are competitive salaries; but this hit with the double study has uncovered evidence of a growing “comprehension gap” whammy of paying which appears to be emerging off unsecured debt in the workplace between the financially literate and the (30%) and buying financially illiterate. One way of their first home(29%) . bridging this comprehension gap is through the use of language.

24 25 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies

Chart 4: Generational life and work priorities*

Baby Boomers’ family responsibilities For Generation X, the priority For Generation Y, the priority is becoming established at work and in are the most complex and challenging is all about managing today the housing market. The future is packed full of numerous life-changing of all three generations, leaving them — mortgage payments, dilemmas: whether or not to buy a house, whether they can afford to “sandwiched” between looking after outstanding loans and costs get married and start a family, how to pay off debts and student loans. elderly relatives and supporting attributed to childcare. To all intents and purposes, their lifestyles had barely changed since Generation Y as it attempts to gain leaving university. a foothold on the housing ladder.

32%

13% 30% 33%

30% 41% 14%

Key Baby Boomers 33% 41% Generation X 30% Generation Y 53% *Data taken from the following YouGov survey question: Which of the following would you say are currently 11% your priorities in your work and/or personal life? 29% 39% Source: YouGov

32% 17% 30% 12% 13% 23% 25%

8% 3% 13% 16% 8% 5% 8% 10% 10% 8% 1% 6% 4% 4%

Spending Saving for Paying off My personal Paying off Protecting Buying Taking a No current Starting Preparing Getting more time retirement unsecured interests my mortgage my family a home break/ financial a family the cost of married with family debt hobbies financially travelling priorities elderly care

26 27 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies

Question 3: Is the language and media used to explain benefits appropriate for the growing Generation Y workforce? In what ways could it be better fit for purpose? Paradoxically, it was the Baby Boomers who When we asked people how they thought such were more likely to do their financial banking mistakes could be avoided, the answers were “I don’t like it when people try to sell to via the Internet and they prided themselves on unequivocal: someone who can give impartial their digital skills. For Baby Boomers, online information and guidance on-site: me on the phone. It’s like, ‘Who are you?’” services were impartial and unbiased — an ideal way to manage their finances: “Meeting in person is what counts. Personal Generation X focus group respondent services and face-to-face contact equates to “I do all my research about financial services trust.” Focus group respondent online. I don’t want to feel that I’m being sold to.” The Internet has provided employees from all To some extent, part of the problem appears to Baby Boomer focus group respondent. Face-to-face, but no hard sell! generations with access to a dazzling array of be the perceived complicated language which There is however a caveat to this. What financial information, guidance and options. The can be used by the financial services industry This was counter to the Generation Y Generation Y does not want from financial result: confusion. Our research found that e-mail when describing financial benefits. For the experience. When making financial decisions, guidance, particularly when encountered (45%) and staff intranet (41%) are still the most uninitiated, such terms can seem overly- the Generation Y respondents were considerably face-to-face, is a hard sell. This generation popular ways for companies to communicate technical. There is also too much information more suspicious of websites: far more than has seeks authenticity and distrusts sales people. their benefits to employees, compared to to take in — particularly when communicated been recognised in previous studies, which have They want to see that the benefits offered to seminars (20%) and one-on-one meetings via e-mail. tended to emphasis this generation’s preference them stand up against industry-standard (13%). However, one in five Generation Y for digital communications.17 Partly this was comparators and that this financial guidance is respondents said that in the past year they have Digitally detoxed connected to a deficiency in financial motivated not by targets or sales figures but by been confused about what employee benefits The concept of the digital native is widely knowledge: Those we talked to felt they lacked responding to their own personal best interest. they have or are currently entitled to. used in both business and academia to the knowledge and skills to decipher complex If this can be provided, then Generation Y is conceptualise how younger people utilise and data. There was also a concern that they might more than willing in return to be loyal to the Rather than the democratisation of financial relate to the Internet.16 The general assumption accidentally choose the “wrong” option or the company providing that information and services, our research suggests that for some, is that as digital natives, Generation Y is more “wrong” benefits package — the consequence guidance. Generation Y seeks to be loyal. the Internet has been counterproductive and likely than others to prefer online of which could be costly and long-lasting. appears to have made financial information communication channels. As a result, seem extra complicated and increasingly considerable energies and resources have been risk-laden. When it comes to making sense of made by organisations in recent years to Summary of key points benefits packages, we found — almost communicate to this generation via e-mail, counter-intuitively — that what people actually websites, text messaging and more recently, want is access to information and guidance on social media. The language of financial services and financial benefits a one-to-one basis. packages can be off-putting to Generation Y, particularly Our research has shown that this assumption As we have seen, few newly-hired graduates may be misplaced. Instead of digital natives, when presented via the Internet, which is what the majority have an informed understanding of how the we discovered a cohort of the digitally detoxed of employers are doing. For this generation, online services student loan operates or even how the — people who were turning away from online repayments work now that they are employed. resources in preference of face-to-face services. do not equate to value; what they seek is face-to-face meetings with advisers who offer guidance and are motivated by the employee’s own goals and aspirations. For Generation Y, the key is authenticity and being genuine.

16 Prensky, M., “Digital Natives, Digital Immigrants,” On the Horizon Journal, (MCB University Press, Vol. 9 No. 5, October 2001) 17 Marc Prensky, (2001) “Digital Natives, Digital Immigrants Part 1”, On the Horizon, Vol. 9 Issue: 5, pp.1 - 6

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Question 4: Will the current employee benefits structure be obsolete in five years as the generations in the workplace shift?

“If I had asked people what they wanted, they would have said ‘faster horses.’” Henry Ford

One of the objectives of the research was to Flexible benefits Flexible benefits have been available in the U.K. “Today, the turnover is too high; it’s hard to feel explore to what extent employees were When employees were asked to describe their since the mid-1980s and are now widely loyal. I used to think I worked for the company. confident that their current employee benefits ideal future benefits packages, few in the focus available across a number of organisations.18 Then it was you worked for a department; then packages would still be relevant in the future. groups were able to see beyond their current Nevertheless, few employees in our focus you worked for a team; then you were told you This is particularly important given the shift provision. “Flexible” and “more choice” were groups appeared to be familiar with them. were a virtual contractor. If you’re in a virtual that is likely to take place in the composition the main responses: Perhaps one of the reasons for this benefits- team you don’t feel loyal.” of the workplace when the Baby Boomer myopia was an over-developed dependency on generation retires. “It would be an evolution of what we the employer. Older employees had, until the In some firms, work reorganisation and the already have. I want choice. You have recent economic downturn, trusted their introduction of project and team-based Yet as we discovered, when it comes to different priorities at different stages of employer to make the right financial decisions working has clearly had a side-effect of thinking about their future employee benefit your life; these change. More could be on their behalf. As a Baby Boomer told us: alienating some groups of workers from the needs, each generation has first to overcome available to help people tailor their organisation, leaving them on one level its own specific obstacles and barriers. remuneration packages to their lives.” “Pensions — never bothered with them before. dependent on the company benefits package, (Baby Boomer) It’s just too complicated so we rely on the and on the other, unable to influence or shape As seen from previous sections, personalised company. This has changed. Investments how these benefits are constructed. benefits are still lacking in many of today’s “Salary: top of the list. Your pay enables that you thought were rock solid have now organisations. As workplace generations age you to do what you want; it gives you lots changed. The rug has been pulled from What does this mean for HR professionals? — and as Generation Y approaches middle of flexibility.” under people’s feet.” For employers, this presents numerous age and takes on potentially more financial (Generation X) opportunities. Our research found that responsibility as a result of growing families This sense of confusion was expressed by employees from all generations were keen to and less job security — why are more people “Help with mortgages and savings: I don’t another Baby Boomer, who was reflecting on find out more about employee benefits not demanding these benefits now? want to be with my mum when I’m thirty!” how during his career, the focal point of his packages but were confused about what was (Generation Y) employment had shifted over time: available to them in their organisation or how

18 Barton, T., “What is the future for flexible benefits?” Employee Benefits (online), 11 April 2013

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Summary of key points

those benefits related to their particular According to Greg Davies at Barclays, the more Helping staff visualise financial circumstances. From our survey we tangibly future outcomes are presented to From an HR professional’s their future selves — found that the majority of employees from all younger employees, the greater the emotional perspective, it is clear that a new generations feel that a strong benefits package connection to these future outcomes will be. particularly in terms of is important when choosing a future employer He argues: approach to benefits is required if the the financial challenges — this was particularly true for Baby Boomers “conversation gap,” which currently they are likely to face and Generation X. Of these groups, 65% and “Showing people photographs of the different in the future — can 59%, respectively, viewed a comprehensive standards of accommodation they might be exists in many organisations around be a highly effective benefits package as being “very important” able to afford in retirement for different levels of the issue of benefits, is to be bridged. way of overcoming or “important” when selecting jobs. We also saving now, has been shown to be much more this obstacle. found that over 80% of employees from all effective in increasing savings rates than the generations expect the employer to provide typical numerical tables of income expectations a range of benefits and support to help them for those savings rates.” Our research Although the majority when making choices. also uncovered Davies has also found visual images equally Yet as we discovered from the focus groups, effective in overcoming some of the barriers to widespread cross- (80%) of employees across when asked for their preferences, many still opt encouraging employees to think about their generational levels all generations expect for “flexible benefits,” even though these future needs: of confusion over benefits have been available in most the type of benefits their employer to provide organisations for a number of years. Whilst this “There are also intriguing studies which that were currently type of benefit has a valuable place in the demonstrate an increase in current savings, being offered by a comprehensive benefits workplace and should continue, to paraphrase and presumably planning behaviour, when Henry Ford, this is a recipe for “faster horses” individuals are shows artificially aged employers — or package (65% of Baby Boomers rather than revolutionary innovation. photographs of themselves when older.” the extent to which these benefits and 59% of Generation X Back to your future were appropriate consider an attractive benefits One way HR professionals can help Helping younger employees identify to people’s needs. not only with their future selves, but their overcome this problem is to help employees Employees — package to be of crucial develop a stronger identification with their future financial situation, can be an future selves. This is particularly important effective way to help them enter into a particularly those importance when choosing for Generation Y, who, as we have seen, more informed and realistic discussion from Generation may find it more difficult than Generation X about benefits. It can also help HR Y — clearly find jobs) we found that relatively or Baby Boomers to contemplate their professionals minimise the risk of it difficult to long-term financial requirements. providing inappropriate or out-of-date conceptualise few employees have a clear benefits solutions. their future selves sense of the type of benefits and the financial challenges they package that would best suit are likely to face in their future needs. the future.

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Question 5: Building benefits packages for the multi-generational workforce — what’s the cost of getting it wrong? Benefits “BC” and “AD” If Baby Boomers and Generation X grew up in a future generations of leaders and managers, world “BC” (before the crunch), generations Y is a crucial imperative. If Generation Y talent is “Employers construct benefit plans and and Z are growing up in a world “AD” (after to be recruited and retained, an engagement the downturn).22 For employers and HR strategy which includes effective and communicate them in a manner that assumes professionals, this raises several key issues. generationally appropriate benefits packages is essential, and must reflect the actual economic people carefully study the materials provided, In this “AD” post-recession workplace, the realities of Generation Y. Our research reveals conduct their own microeconomic analyses concept of loyalty is increasingly being rewired that currently over one in ten (12%) of the to mean anything longer than two years. Studies Generation Y workforce is so dissatisfied with and make informed decisions. The trouble with reveal that on average, Generation Y is likely to their current benefits package that they have change jobs once every three years.23 This considered moving to a different organisation. this assumption is that people do not make means during the course of their careers they rational decisions.” will have anything between 15 and 20 employers. But losing key talent isn’t the only risk associated with wrongly pitched benefits. Christopher Goldsmith and Steven Cyboran19 For Baby Boomer managers, this can be hard As Lesley Uren from PA Consulting argues, to grasp. It might also look like serial job there is an added danger that it encourages hopping. For generations Y and Z however, disillusionment amongst employees who in it is the “new normal.” turn don’t leave, but stay: Given the rise of the multigenerational Even amongst those not actively seeking workforce and the implications this has for new positions, 92% claim this is only because For both employers and employees, the “The risks of providing the wrong benefits organisations, HR professionals need to be the current climate is too volatile. 87% said financial implications of a workforce which proposition are not all around retention. The confident that their benefits packages are the only reason why they are still with their changes jobs more frequently are likely to be scariest alternative is that people stay — and future-proof. Failure to do so could have some present employer is because of a lack of just as significant. The U.K. is already one of the that the ones who stay are the ones who are unforeseen consequences. suitable vacancies. most expensive countries in the world in which most disillusioned and disengaged, the ones to hire and replace staff.24 Estimates put the who give less of themselves. Disengaged Beware the post-crunch talent exodus Like it or not, the economic downturn has had cost of replacing employees to be between employees affect the bottom line.”26 The economic downturn has had a well- a significant impact on the loyalty and 50% and 150% of salary.25 For HR professionals, documented impact on employers’ profits. Less commitment of U.K. employees. Once the reducing staff turnover, particularly amongst well-documented is the effect it has had on the economy improves, employers should be loyalty of their employees. prepared for what could be the greatest talent exodus of the 21st century. 85% of employees are currently working longer hours than before the recession and have taken The employer-employee disconnect on more responsibility. What employers are Accustomed to time-serving Baby Boomers, unlikely to realise, however, is that less than few of today’s employers, or politicians, have For HR professionals, reducing staff turnover, one-in-four workers feels “fully engaged” with yet to grasp the full implications of the particularly amongst future generations of their organisation.20 More alarmingly, 59% of generational shift which is about to take place, workers are either contemplating changing jobs or the implications this will have on benefits leaders and managers, is a crucial imperative. or are in the process of submitting applications and engagement strategies. — the highest figures yet recorded.21

22 For further information on how the world of work has changed before and after the economic downturn (i.e. ‘BC’ and ‘AD’) see Redmond P. (2010) “The Graduate Jobs Formula: Improve your employability and land your dream career” Trotman Publishing. 19 Goldsmith, C. & Cyboran, S., “Reducing Suboptimal employee decisions can build the business case for employee benefits,” 23 Meister, J., “Job Hopping Is The New Normal For Millennials,” Forbes, 14 August 12 Benefits Quarterly, 2013 24 U.K. talent acquisition costs rise to £5,311 per hire, compared to £2,226 in U.S.,” HRM Magazine, December 2011 20 “Gen Up: How the four generations work,” CIPD /PENNA Joint Survey Report, September 2008 25 Hays Group, “The Loyalty Deficit: the employees are restless again,” November 2012 21 The loyalty deficit: the employees are restless again,” Hay Group, November 2012 26 Lesley Uren, PA Consulting, conversation with author, 24 July 2013

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Chart 5: The Baby Boomer The New Baby “bust” generation young employees to be unrelated to their rise of the new Psychological Contract Psychological Contract The impact of the recession has been present situation: psychological particularly detrimental on the economic contract prospects of Generation Y. Current predictions “The big problem for financial planning for Work “for” Work “with” state that when they are aged 65, this Generation Y in particular, is that the outcomes generation will be 25% less well off than are so far off — these issues may be perceived an organisation an organisation their parents were at this age.27 as important, but only in the abstract. They are being asked to make sacrifices of current The gulf in generational wealth is particularly time, energy and consumption to meet much COMMAND FUNCTIONAL apparent when it comes to buying a house. later goals which are hypothetical, abstract and contingent.” & control teams The average age of a first-time buyer in London is now 38 compared to 30 in 2008 and 28 in Not the Boomers’ world 2002. In the early 1960s, when Baby Boomers For employers, this shift in the psychological were buying their first homes, the average age contract poses many questions. If new Job for Job for for first-time buyers was 24.28 generations of employees are not seeking “jobs for life” because they deem it impossible Failure to buy a house or secure a deposit means or unrealistic, what impact will this have on that Generation Y is less likely to remain in one employee loyalty and commitment? Should geographical location. As a result, they are more organisations be trying to reward loyalty or is NOW likely to live in short-term rented (fixed term contracts) it time to accept that such concepts are beyond LIFE accommodation.29 They are also unlikely to have their sell-by dates? the wealth and investments that previous career clarity portfolio career generations currently take for granted. All these Our research found that if current trends are factors which make it easier for Generation Y continue, the workplace of the future will be to job hop. But it is not just being overworked transformed. In place of the Baby Boomer Employer- Employer- and being able to plan for the future that is psychological contract, we envisage a new leading to a fall in levels of loyalty. A growing transactional contract taking its place (see dissatisfaction with employee benefits packages Chart 5). Instead of being the key provider of provider enabler is emerging which is causing some of the benefits and security, the role of the employer highest levels of employee dissatisfaction — will become that of an enabler. Employers will again, amongst younger generations.30 enable employees to develop market-valued RISING INCOME RISING INCOME skills and knowledge; they will also provide and security reduced security For Greg Davies, Head of Behavioural Finance access to prized networks and contacts. Instead at Barclays, this dissatisfaction stems not just of promotion and progression, employees will from the prevailing economic context, but increasingly look for personal development and Promotion Personal from the fact that many of the core issues career enrichment. & progression development raised by benefits packages appear to many SAVE NOW SPEND NOW 27 Barrow, B., “Baby ‘bust’ generation: today’s young will end up 25% worse off than their boomer parents,” Daily Mail, 11 October 2011 spend in the future save in the future 28 “Ten year wait for first time buyers to raise a deposit,” Post Office Mortgages, 11 September 2012 29 Walker, T., “No place like home: the generation who can’t afford to buy,” The Independent, 16 March 2010 30 Pegg, T., “Employee benefits provision: can it impact on talent retention, motivation and productivity levels?” Human Resource Management International Digest, Vol. 18, No. 3, 2010

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If you build it, they will come Summary of key points Behavioural economists have found a are communicated in familiar language and “comprehension gap” existing between the terminology.32 If this can be achieved, evidence benefits packages offered by organisations and suggests this will drive engagement. According to The generational shift in Combined with this, the the needs and understanding of Generation Y a recent U.S. study, 72% of employees who economic prospects of employees.31 Too often, the way that benefits claimed to be satisfied with their benefits provision the workplace and Generation Y are very were structured appeared incomprehensible were also found to be more loyal to their economic downturn have different than those of the to those unfamiliar with the terminology and employers and engaged with the organisation.33 previous generations: The concepts. So complicated is this information had a profound effect on difficulty in getting on the to decipher that consumers switch off — a The key, researchers found, was in how benefits process known to behavioural economists packages were communicated to employees. the loyalty of employees, property ladder means that as “complexity aversion.” The next section provides a model for helping Generation Y are more able you think about how to do this. and once the economy to live in short-term rented If your organisation is creating complexity improves employers accommodation, move aversion amongst generation Y and Z abroad easily and job employees, it is essential that benefits packages should be prepared for hop. It also means that

what could be the employers need a very 31 Goldsmith, C. & Cyboran, S., “Reducing Suboptial Employee Decisions Can Build the Business Case for Employee Benefits,” different set of incentives Benefits Quarterly, First Quarter, 2013, pages 15-31 32 Meza, K., “New Guardian Study shows employers’ ineffective benefits communications compromise employee engagement,” greatest talent exodus for engaging this new Guardian publications, 2012 generation in the workplace. 33 “Benefits and the coming employee retention crisis,” Trends E-Magazine, October 2011 of the 21st century.

This trend goes further. Our Yet if the costs of getting it research reveals that 12% of wrong are high, the reward Generation Y respondents are so dissatisfied with their current for offering the right benefits benefits package that they have packages to the right considered moving to a different generational groups can be organisation. This indicates significant. Research shows the emergence of a new Generation Y psychological that employees who are contract which will rewire the satisfied with their benefits way that future generations of packages are also more employees engage with their likely to be loyal to their employers, with the role of the employer shifting from employers and engaged that of benefits provider to with their organisations. benefits enabler.

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Section 3 HR professional’s tool kit

While carrying out the focus groups and talking to employees Financial Innocents Almost entirely made up of Generation Y, benefits packages available to them via their about financial planning and their attitudes to benefits Financial Innocents are confused, bothered employer. After all, these packages were largely packages, we observed several types of responses which, and bewildered about financial benefits and built by Baby Boomers, for Baby Boomers. find the process of choosing between financial to some extent, mapped against the generational categories. products equally disorientating. They are, Opted-Outs In shorthand, we are referring to these response types as however, at least aware that decisions are to Again, Generation Y: Opted-Outs are the be made and that there are workplace benefits Mr. Hyde to the Financial Innocents’ Dr. Jekyll. Financial Innocents, Active Agents, Opted Outs and Window and support opportunities to be taken They have opted out almost completely Shoppers (Chart 6). advantage of. Left alone, however, they will be from any financial planning. Services and unlikely to take the initiative. But if approached benefits available to them at work will with messages composed in language they largely go unnoticed. Don’t take their lack understand and which relates to them, there of engagement personally. is a good chance they can become tomorrow’s Active Agents. Window Shoppers Predominantly members of Generation X, Chart 6: Four attitudes to financial planning Active Agents Window Shoppers spend what limited time When it came to making use of financial they have available surfing Internet sites, and benefits — either available to them at work or watching TV consumer money programmes. through their own active agency, active agents This group is engaged with the process of were by far the most engaged and the most financial planning but rarely have the time to Engaged organised of all four categories. We found take things forward or make significant FINANCIAL Active active agents tended to be Baby Boomers: changes. They are keen to learn more about They had the networks and the contacts — workplace benefits packages and will engage INNOCENTS Agents both in work and at home — from which to with HR, but only if the engagement is at a gain financial guidance and, with their time and place which is convenient to them. mortgages all but paid for and their pensions This group may need help and support in organised, had the financial “space” to explore making lasting financial decisions. different financial options. On the whole, active agents were content with the one-size-fits-all Opted- Window Outs Shoppers Disengaged

Low Awareness High Awareness

40 41 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies

Chart 7: Summary of financial “typology” Chart 8: An example of generationally-specific benefits packages*

Active Window Financial Opted-Outs Agents Shoppers Innocents Baby Boomers Generation X Generation Y

Dental and Comprehensive Free workplace Characterised vision care health care with financial guidance by Generation Mostly low deductibles workshops X: time-poor Access to high Boomers but willing to Generation Y Generation Y interest savings Subsidised Help and support with some search around accounts childcare with mortgages, Generation X for options including help Preferential Guidance on and guidance. with deposits Defining Generation Defining loans secured mortgages on behalf of Preferential-rate Financial Willing to engage younger children overdrafts with financial “health check” Well-informed, Not set on any When it comes benefits, but only Health and Lower-premium/ willing to take particular benefit to financial planning Share plans if they are worded control of package. Flexible — none. Except wellbeing higher deductible in a way which and SAYE organising their and willing to that they can only service health care plan doesn’t presume Strengths own benefits. learn. get better. Option for any previous Guidance on Guidance on maximum life knowledge. savings and pensions insurance coverage investments Decisions about Numerous. Have Flexibility Despite their finances are likely decided that No time to spend is crucial: enthusiasm, may to be influenced finances are too reading small lack specialist by hearsay or the complicated and provide ample print or “faffing” knowledge guidance of ill- therefore have opportunities with details. and insight. advised colleagues withdrawn from for mixing and Weaknesses and relatives. taking action. Tailored benefits packages for this generation might include: might for this generation packages benefits Tailored matching benefits

Don’t take their Short work-based lack of engagement Online and Text-messaging Workplace seminars, informal Easy — via any Text-messages personally. Best via e-mail and lunchtime seminars and lunches and talks. route possible: work best (no way is to work Case studies and briefings (keep small group they are engaged phone calls with the Financial Bespoke seminars personal accounts brief and to meetings so will attend. or e-mails). Innocents and let and workshops with them work well with the point) them evangelise on Case studies How to connect connect to How this group. Performance your behalf. Personal bankers and personal reports and available in messages

Optimum Optimum specialist workplace from benefits literature “evangelists” YouTube clips and

The following toolkit has been designed for HR professionals channels: communication downloadable videos who are looking for ways to boost employee engagement by

providing a more generationally-appropriate benefits package. *This toolkit excludes mention of company pension schemes due to the implementation and roll out of pensions automatic enrolment for UK firms. 42 43 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies Appendix

Baby Boomers

The Baby Boomer generation is the largest single generation in history. “I have just turned sixty. I don’t want to Even today, Baby Boomers still account for the majority of managers, work fifteen hour days anymore; for me, chief executive officers, politicians and world leaders — although this is gradually changing. This generation has walked on the moon, danced at it’s five o’clock and then that’s it.” Woodstock, invented the personal computer and declared “All you need is Baby Boomers focus group participant love.” Boomers are confident, opinionated and are used to being in charge.

Born 1945 – 1960 Characteristics Career profile Economic characteristics The Baby Boomers we spoke to in the focus In terms of financial investments, the Baby • Idealistic groups were, from a career perspective, relatively Boomer generation was definitely in the right At Work • Cultural relativity content to remain with their employer until place at the right time. Boomers have spent • Visionaries retirement. In fact, getting to retirement was for most of their careers in company benefits • Optimistic some the overriding objective. As one Boomer programmes — programmes which essentially, • Socially liberal, told us: were designed for them, by them. Not only • Organisational politically conservative was this generation able to buy affordable • Careerist “I have just turned sixty. I don’t want to work • Family-orientated houses, it was they, more than any other group, • Qualifications and fifteen hour days anymore; for me, it’s five who were ideally placed to benefit from the • Property owners time-serving o’clock and then that’s it. I’ll work longer if property boom of the 1980s and 90s. They • Value face-to-face it’s necessary to get a job finished, but only also benefited from free higher education. As a interaction when I have to.” result, Boomers are affluent and empowered. Baby Boomer focus group participant Financial Characteristics Not everything, however, is in the Boomers’ Some had been with the same employer for favour. The economic downturn has had an more than four decades — a feat of loyalty impact on their levels of confidence, particularly • Typically affluent and willing to spend which has required constant reinvention and in terms of how they view their pensions: • Loyal to established brands and lifelong learning. Nevertheless, having seen how products organisations are cutting back on staffing, levels “I’ve got two sons and grandchildren; there are • Value relationships and of security amongst this generation are starting lots of money concerns — will my pension be personal services to decline. Nevertheless, of all three generations high enough to maintain the lifestyle I’m used • Concerned about online security it was the Baby Boomers who remained to? I go skiing every year and cycling. How will • Local focus: value communities proudest of their organisations: It was they who I afford this on £20,000 a year? It’s not ‘will I and local services identified with the entire organisational brand. survive?’ It’s ‘will I have a good time?’” Baby Boomer focus group participant

44 45 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies

Generation X

Generation X grew up in families in which divorce was rising and where “We’re caught in the middle. We have both parents were at work. This was the “latch-key” generation — from this they developed a certain degree of independence and self-reliance ambitions — but Generation Y have come which they have retained into adulthood. and taken the steps that we deserve.” Technologically, Generation X was the first generation of “digital Generation X focus group participant immigrants” who had to teach themselves the language of computers, often while working in pre-digital work environments. As such, they are often enthusiastic digital converts — particularly when it comes to smart phones, digital cameras and online learning.34 Of all generations we Born 1961 – 1980 encountered, Generation X is most concerned about work-life balance. Financially, this means that when it comes to choosing financial benefits — access, flexibility and convenience are the decisive factors. Financial Characteristics At Work Career profile Economic characteristics • Middle managers At work, Generation X is typically the middle- Like the Baby Boomers, Generation X was • Loyal to profession, manager generation, the generation that started motivated at the earliest opportunity to invest not necessarily employer work in the 1980s and is now approaching in property. But unlike their older counterparts, • Digital immigrants middle-age. Unlike the Baby Boomers who house prices for this generation have largely • Less affluent • Worried about work-life balance profited from hierarchical, pyramid-shaped stagnated. The same applies to their pensions • Pressed for time — • Value face-to-face interaction management structures, Generation X has and savings. For Generation X, finances are a value convenience, worked through numerous workplace evolutions growing cause for concern: reliability and flexibility and re-engineering processes — the results of • Cynical when faced which have left the workplace less hierarchical “I’ve got a big cloud on my horizon: pensions. with brand promises and more transactional. As a result, Generation Pensions might not be there when we ever get • More willing to X is often caught between the world of the to retire. So how can we plan ahead? So what shop around Boomers and the world of Generation Y. else can we do?” • Question loyalty Generation X focus group participant to brands and Poignantly, few Generation X respondents were products satisfied with how their careers were unfolding; This inability to plan ahead is partly exacerbated by the growing realisation that Characteristics several were keen to stress that they still wanted to progress, if only opportunities for career Generation X will be unlikely to retire at the • Reactive advancement could be found: statutory retirement age. There is therefore increased pressure to manage finances. What • Complicated home lives “We’re caught in the middle. We have Generation X lacks, however, are the networks and family structures ambitions — but Generation Y have come of guidance and support that other generations • Reduced social capital and taken the steps that we deserve. Y gets are able to call on. • Dual-incomes the career development and we’re ignored.” Generation X focus group participant

34 Prensky, M., “Digital Natives, Digital Immigrants,” On the Horizon Journal, (MCB University Press, Vol. 9 No. 5, October 2001)

46 47 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies

Generation Y

Generation Y is skilled at keeping its options open. According to Business Week,35 members of this generation tend to shun commitments — be they “I don’t want life to be all to employers, institutions, even partners (marriages amongst Generation Y about working and Born 1981 – 1995 are at an all-time low). scrimping and saving.” Compared to Generation X, Generation Y has been found to have a far higher level of awareness about the environment. One study has found Generation Y focus group participant Characteristics that 72% of final-year students said they would have to feel happy with an employer’s ethical record before agreeing to work for them.36

At Work • Connected (24/7) Career profile Economic characteristics • Self-confident At work, Generation Y is causing businesses Generation Y has grown up in relatively • Optimistic to rethink their marketing and communication affluent times. Not only do members of this • New recruits/trainee managers • Educated strategies. Having grown up in a media- generation have more disposable income than • Loyal to personal goals, visions, values • Bored by routine saturated, IT-driven, brand-dominated other generations, they have spent more time • Digital natives — never experienced life • Success-driven environment, studies suggest that Generation in education. without computers or the Internet Y responds to organisations differently than • Lifestyle dominates — hence early career breaks • Lifestyle-orientated the preceding generation. For organisations, This apparent affluence, however, comes with • Attendance is optional • Civic-minded this makes working with Generation Y both a certain qualifiers. In absolute terms, Generation • Multitask — particularly with technology • Environmental outlook challenge and an opportunity to rethink strategy. Y might have higher income and spending • Expect immediate feedback • Entrepreneurial power than the two preceding generations, • View managers as coaches and resources for • Opinionated Our research found different levels of but this largely reflects technological advances self-advancement • Diverse engagement being exhibited amongst which have led to a greater availability (and • Value face-to-face interaction Generation Y employees. As long as affordability) of a wider range of goods and respondents were confident that they were services. Yet when it comes to wealth tied up in being offered opportunities to develop their housing and pensions, Generation Y has been Financial Characteristics skills and knowledge, on the whole, levels of called the new “Baby Bust” generation — the engagement were positive. However, it was also first post-war generation that risks growing up noticeable that Generation Y could become less affluent than its parents.37 quickly disillusioned, even disruptive, if they • Affluent and willing to spend felt that opportunities for advancement were If Generation Y is aware of their inability • Value novelty, design and being denied to them: to afford property, few respondents in our brand-reputation research were overly concerned about not • Interpret brands as “I don’t see why I have to be managed by being able to secure a mortgage: “personalities” and someone just because they’ve been in the lifestyle messages business for twenty years more than me “I don’t want life to be all about working and • Expect to shop — not when I’ve got a degree and better scrimping and saving.” around — globally IT skills than her. She even asks me to fix Generation Y focus group participant • Global citizen her computer.” Generation Y focus group participant

35 Ericson, T., “Redefining Generation Y,” Business Week, 8 June 2010 36 “Engaging Generation Y,” Reckitt Benckiser, 19 October 2010 37 Hawksworth, J. & Lund, R., “How will the wealth of the baby bust generation compare with that of the baby boomers?” PricewaterhouseCoopers, October 2011 48 49 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies

Maturists Generation Z

Maturists are still in the workplace but their Through part-time jobs, new apprenticeships and other forms of entry- numbers are rapidly diminishing. Nevertheless, Born pre-1945 level employment, Generation Z is gradually entering the job market. their influence and values have been critical in This generation will grow up in a post-economic downturn environment; shaping today’s workplace. This is the generation a world of ubiquitous technology, wall-to-wall social media, and the that grew up during the Second World War constant availability of information. and who have witnessed numerous social, technological, demographic and cultural shifts.

At Work • Team players Born after 1995 • Multi-taskers Characteristics •  Interchangeable work • Hierarchical • Loyalty and home life • Pre-digital •  Highly entrepreneurial At Work • Family-orientated • Hard work/long hours and “intrapreneurial” • Respect for tradition • Job for life — security – likely to want to run • Clear gender roles Characteristics their own businesses while working “with” organisations Financial • Socially (and globally) Characteristics aware • Global (rather than local) outlook • Environmentally • Concerned about conscious pensions and savings Financial • Digital infants • Conservative values Characteristics • Invest in property • Highly brand-aware • Overly dependent on hand-held • Seek security and technology financial stability • Likely to enter job market with education-related debts The number of Maturists at work doubled between • Less likely than any post-war generation to own home 2001 and 2010, signifying that the U.K. workforce is • Heightened requirement for getting older. According to research for the Houses portable financial packages of Parliament, by 2020 a third of U.K. employees will be over 50. Within 20 years, a quarter of the total U.K. population will be over 65.

50 51 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies Case studies For the report, we worked with leading organisations across a Case study: Fujitsu range of industries and sectors. While each organisation had its own approach to benefits packages, three of the most forward- Fujitsu is the leading Japanese information and communication thinking organisations that we encountered are featured here as technology (ICT) company offering a full range of technology products, case studies. solutions and services. Approximately 170,000 Fujitsu people support customers in more than 100 countries.

Employee Benefits “Your Choices” Case study: Langland As a large employer, Fujitsu offers a wide Fujitsu is committed to supporting its range of employee benefits. These include: employees in making the right choices for their lifestyle and the company website stresses that Langland is an award-winning health care advertising agency. The agency Competitive base salary the organisation understands that “everyone • Company-wide incentive plan based upon has differing priorities.” The Fujitsu initiative, was established in 1991 and is still owned by its founding directors. Based individual and/or company performance ‘‘Your Choices” offers wide-ranging benefits in Windsor, Berkshire, the agency employs around 80 permanent staff. which provide protection and security for • Up to 10% company pension contribution employees and their families as well as those All employees, regardless of job function or Langland runs a rolling programme of training, • 4x salary life assurance which support lifestyle. seniority, enjoy a comprehensive benefits which covers a broad range of topics, enabling • Income protection if you are unable to work package. This includes pension (Langland learning and development to be tailored to “Your Choices Flexible Benefits” is designed because of illness contributes a minimum of 5% of salary; the individual needs. A recently introduced initiative to give employees a versatile and cost efficient company then matches the employee’s is a programme of external speakers invited • Dependant on role way to optimise their benefits portfolio. The contribution up to a further 5%), life assurance, into the agency to give keynotes on a wide • Company-provided medical cover benefits currently included are: private health and income protection insurance, variety of topics including advertising, UX • Company car or cash allowance interest-free season tickets loans, childcare design, generational theory and motivation. • Lifestyle — Annual holiday, childcare vouchers, an iPhone for business and personal There is an active social club and the agency vouchers and travel insurance use, contractual profit-related bonus and the arranges regular staff parties and away days, opportunity to earn a discretionary, the most recent being a family day at the • Health care and wellbeing — performance-related bonus. Cornbury Festival. Dental cover, medical benefit, health screen and healthcare cash plan

• Savings and Protection — Pension, spouse/partner life assurance, critical illness cover, additional life assurance and personal accident insurance

Fujitsu also has an employee discount site offering discounts on Fujitsu equipment as well as discounts from a variety of retailers.

52 53 Talking Overview HR Appendix Executive about my of the professional’s and case summary Introduction generation findings tool kit studies

Case study: Nuffield Health

Nuffield Health is the U.K.’s biggest health charity. Nuffield Health has • Give As You Earn — also known as payroll giving — is managed through Nuffield been providing health services for almost 60 years and over that time has Health’s partner, Sharing the Caring. The employees choose the amount to donate to their selected charity and the money is deducted from their gross pay, which means they developed from purely running hospitals to incorporating Cannons gyms, don’t pay tax or national insurance on it. Instead, the charity will receive what the Greens gyms and Proactive Health to now offer a wide range of integrated employee would have paid in tax as part of the donation. health and wellbeing services.

Running hospitals, fitness and health clubs, According to Kevin Thomson, Head of diagnostic units and medical centres, as well as Wellbeing: working directly with employers, the charity runs a national network of over 300 wellbeing “Our aspiration is to develop a culture of facilities and supports over a million people a wellbeing, where all employees have the Diagram: Nuffield Health — “Wellbeing Triangle” year with their health needs. Its aim: to help ability to ‘thrive’ in the workplace, where the people get healthy and stay healthy. This is employee is considered as important as its reflected in the Nuffield Health Brand Strategy: customers. If our employees have a sense of ‘happiness’ and aligned to the brand strategy “Success depends on our people — they are the they are more likely to put in maximum effort.” Values most important part of how we deliver our Aligned values promise to health consumers. We want everyone Financial Wellbeing and behaviours at Nuffield to become a champion in the cause of At Nuffield Health, Financial Wellbeing comprises ‘health as it should be’ and our culture of a number of employee-based options: Leadership wellbeing, recruitment, training and rewards Recognised as individuals, processes will be designed to encourage, enable, • Retirement savings plan — Starting in treated with respect, listened to, and support them to achieve this goal.” June of 2013, Nuffield Health will be knowing their opinions are valued automatically enrolling all eligible employees into a new retirement savings plan, starting Wellbeing Community Employees at Nuffield Health can learn about with an initial contribution of 1% of their Develop and encourage a cross-divisional the wide range of wellbeing initiatives available salary. The good news is their contribution social workplace with opportunites to “take part” to them via a dedicated website. A “Wellbeing will be matched on a 1:1 basis up to 6% of internally and externally Triangle” (see diagram) has been developed their salary. along the model of Maslow’s Hierarchy of Total Health Management Needs, which illustrates how the organisation’s • Life assurance — All employees are Equal and consistent access to health related services. values, leadership, approach to community and automatically provided with life assurance to Joined-up health for employees around three stages: foundation and commitment to “total health ensure their families are financially protected Prevent. Assess. Treat. management” fit together — for the benefit of in the event of the employee’s death. The level both consumers and employees. Throughout of cover is 1x salary for employees who are the organisation, a clear link is drawn between not members of the retirement savings plan Foundation the company’s desire to support and enhance and for those members who are contributing Fair and transparent HR policies, financial reward, learning and employee wellbeing and its vision to improve at the minimum level. If employees are development, performance appraisals. A healthy work environment the health of the nation. members contributing above the minimum level, they will be covered 3x salary.

54 55 Acknowledgements Methodology

Thanks go to the following people for their contribution and insight into this report: An in-depth questionnaire was developed to In occupational terms, the majority of explore employee attitudes to benefits packages. respondents were working in professional or Dr. Paul Redmond, Head of Careers & Employability at the University of Liverpool This online survey was conducted by YouGov managerial jobs. This was followed by people between 31st May - 3rd June 2013 and working in supervisory and administrative- Jo Chin, Chief Operating Officer, Langland completed by more than 1,200 employees, in related jobs. addition to employees of the companies with Dr. Greg B. Davies, Head of Behavioural Finance at Barclays which focus groups were completed. The The focus groups generational breakdown of those completing After data from the questionnaire had been Laura Gorse, Leadership Development Consultant, Harrods the questionnaire was evenly spread and closely analysed, six focus groups were held at a range matched the actual distribution of generations of leading organisations with backgrounds Kevin Thomson, Head of Wellbeing, Nuffield Health across the U.K. workforce. The gender split of including professional, technical, retail and respondents was also balanced between 52% health care. The aim of the focus groups was to Larry Upton, HR Specialist (Diversity & Inclusion), Fujitsu female and 48% male and the figures have test some of the key hypotheses which had been weighted and are representative of all emerged from the questionnaire. Supplementing Lesley Uren, PA Consulting Group GB adults (aged 18+). the focus groups were individual interviews with managers and senior HR professionals. The majority of those employees who completed the questionnaire were employed Responses from focus group attendees are on a full-time basis (i.e. 30 or more hours per used throughout the report. week). Of the three generations, Generation X was most likely to be working fulltime and Baby Boomers the least likely.

Respondents were drawn from all major professional and industrial employment fields, providing a rich and comprehensive data set.

56 57 Appendix – Financial wellbeing

Much work has been undertaken in recent As we will see, for many people at work, years around the idea of wellbeing. According developing effective strategies for managing to a study undertaken by Gallup,38 an personal finances is an aspiration rather than a employee’s overall sense of wellbeing requires reality. Levels of financial literacy remain low, five elements: across all generations.

Many people also lack the time and expertise 1. Career wellbeing: enjoying the work — and the confidence — to take control of their you do. finances. For others, the “long hours” culture 2. Social wellbeing: having good, which has become prevalent in many positive relationships. organisations means that there is not the time available at the end of the day to devote to 3. Financial wellbeing: effectively personal finances. For many, managing one’s managing your economic life. finances means surfing well-known consumer 4. Physical wellbeing: having good websites in the hope of encountering useful health and energy. information. Others — particularly those with the least experience of financial self- 5. Community wellbeing: feeling a management — have simply opted out strong connection to where you live. altogether, abandoning any sense of hope of personal agency, preferring instead to rely on the (somewhat limited) guidance of friends, Employees with high levels of financial relatives and older colleagues. wellbeing actively manage their personal finances and spend their money wisely. For employers, this lack of financial wellbeing Underpinning this approach is an which permeates all generations in the understanding of how to devise and implement workplace presents significant opportunities for effective financial strategies. In turn, improving engagement across the workforce. Legal note “[…] these successful strategies result in financial security, which eliminates daily stress Whilst every effort has been taken to verify the accuracy of this information, neither Dr Paul and worry caused by debt. This financial Redmond, YouGov nor Barclays can accept any responsibility or liability for reliance by any person security allows them to do what they want to on this report or any of the information, opinions or conclusions set out in the report. This document do when they want to do it.” 39 is intended solely for informational purposes, and is not intended to be a solicitation or offer, or recommendation to acquire or dispose of any investment or to engage in any other transaction, or to provide any investment advice or service.

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*Calls may be recorded so that we can monitor the quality of our service and for security purposes. “Barclays” refers to any company in the Barclays PLC group of companies. Barclays Bank PLC is registered in England and authorized by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered No. 1026167. Registered Office: 1 Churchill Place, London E14 5HP. 38 Gallup, “The Five Essential Elements of Wellbeing,” 2009 39 Gallup, “The Five Essential Elements of Wellbeing,” 2009 © Barclays September 2013. All rights reserved.

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