As benefits costs and other labor expenses rise, knowing what matters to specific employees can increase the effectiveness of benefits programs. An effective reward and benefit strategy can improve an organization's productivity by boosting the satisfaction, performance and retention of individual employees.

Knowing what matters to specific employees when designing benefit and reward packages is critical to business outcomes. Organizations must now consider generational differences in employee needs and motivations and provide choices aligned to age.

Here's what organizations can do:

• Understand generational differences in employee needs and preferences through research and employee surveys;
• Consider innovative workplace practices to allow flexibility in where and when work is done and in different kinds of reduced-hour schedules without career or benefit penalties;
• Find ways to offer more choices in benefits such as health care coverage and retirement accounts to address the diverse preferences of employees;
• Consider a range of financial benefits to appeal to employees of different ages;
• Find ways to eliminate penalties for older workers who choose to work after "retirement" (within ERISA parameters); and
• Communicate benefits in multiple ways to respond to generational differences, including different comfort levels with technology and different needs for face-to-face or print communication.

Reward and benefit strategies will be most successful when they link business strategy with the range of individual employee preferences. And as employee preferences are a moving target, they must be evaluated regularly. Results will likely change as the generational composition of the workforce changes and as the aging process changes personal and family needs. Over the past ten years, for example, employee use of elder care benefits has surpassed the use of child care benefits at some U.S. organizations.

Communication. Benefits communication and administration are critical elements in any benefits strategy. Communication will be more successful when it factors in the needs and preferences of workers from different generations. The most successful method of addressing generational differences is to communicate benefits information in multiple ways. Different generations have different preferences for communication methods and different comfort levels with technology. A company with younger workers will find a strong, if not exclusive, preference for online information, especially when it is personalized or "pushed" and interactive. An older worker may rely more heavily on print–mailed messages, posters or fliers–reinforced with in-person communications.

Many companies and human resource outsourcing (HRO) providers are moving to improve the effectiveness of their HR Web sites, making them smarter, faster and more customized, and expect that, over time, older generations will assimilate to electronic communications.

The SHRM Generational Differences study found communication through multiple channels to be the most commonly used means of addressing generational differences and needs. It was also one of the most successful, with 65 percent reporting it to be "very successful." Face-to-face-meetings, email, intranet tools and printed materials all have value. Different vehicles are preferred by different audiences for different kinds of messages. Again, one size does not fit all.