The war for talent has fundamentally shifted the rules of engagement. As employers navigate an increasingly complex landscape – managing multi-generational workforces while controlling costs in a constrained economic environment – one truth has emerged: flexibility across key facets of the employee value proposition is no longer a nice-to-have, but the cornerstone of competitive employee value propositions. 

In today’s workplace, employees increasingly demand flexibility across all aspects of their value proposition – from working arrangements to remuneration structures. Yet this shift towards customisation presents employers with a critical challenge: how to maintain a responsible framework that protects employees from short-sighted decisions that could jeopardise their long-term financial security or leave them underinsured against life’s risks, like death and disability. Research consistently demonstrates that retirement savings, healthcare, and risk coverage remain the most valued and essential benefits. This creates a delicate balance for responsible employers, who must move beyond outdated one-size-fits-all approaches while ensuring their workforce remains protected.

“Traditionally, benefits were designed around the ‘average employee’,” explains Blessing Utete, Managing Executive at Old Mutual Corporate Consultants. “But no-one is average, and employers who recognise this have an opportunity – and responsibility – to create frameworks that offer meaningful choice without compromising their employees’ fundamental financial wellbeing.

The need for choice

The challenge for senior leaders is clear: how do you create a benefits framework that meets diverse generational needs without sacrificing fiscal responsibility or long-term employee protection? The answer lies in responsible benefits flexibility – a strategic approach that’s rapidly climbing corporate agendas as forward-thinking employers recognise its potential to transform both talent acquisition and cost management. 

Designing a benefits programme that balances flexibility and responsibility begins with a deep understanding of the reasons behind employees’ growing need for choice, says Lindiwe Sebesho, Managing Director at Remchannel.

The imperative for employers to offer flexibility is clear: according to the 2023 LIMRA-EY study on workforce benefits – Harnessing Growth and Seizing Opportunity – a majority of employers (61%) recognise they will need to offer a wider variety of benefit options to meet the expectations of the different generations within their workforce. Sebesho also says that companies offering tailored benefits packages see an increase in employee productivity and retention rates. 

“Responsible benefits flexibility can attract Millennial and Gen Z employees by offering them choices that align with their lifestyles and career goals, thereby reducing job-hopping and increasing retention,” says Sebesho. 

However, it’s a myth that younger employees don’t care about retirement savings, says Utete. “There’s a perception that they all want to live for ‘the now’. That is not necessarily the case.” He believes younger employees are mindful of their financial future and that offering flexible, well-designed benefits is key to helping them save, despite the challenges they may be facing at this stage of life. 

This is echoed in the results of Old Mutual Corporate’s Employee Benefits Annual Trends Survey 2025, an in-depth survey conducted across generations. The results show that Gen Z employees have the highest confidence in understanding their benefits, rating their own understanding on average as 87%. In addition, 68% rate their understanding as excellent. While this can partly be attributed to youthful optimism or simpler benefit structures, it also reflects a growing awareness and engagement with financial planning tools early on in their careers. Gen Z respondents also indicated that they are already exploring diverse and modern saving instruments, such as tax-free savings accounts and cryptocurrency. 

Flexibility within a responsible benefits framework means accommodating employees’ natural progression through life whilst maintaining protective guardrails against excessive customisation. A well-designed system can facilitate structured benefit adjustments at significant life events – promotions, childbirth, adoption, or marriage – recognising that these moments align with both greater financial capacity and heightened protection needs, without opening the door to complex choices that could undermine long-term security. While this level of customisation might seem administratively burdensome, Sebesho says technology is making it more manageable than ever. 

She also highlights the importance of the “psychology of choice”, and trusting that, with the right information and support, employees will make informed decisions. Younger workers often feel that the workplace is too paternalistic and prescriptive, forcing them to save for retirement while not understanding their immediate realities. “When you acknowledge the short-term needs, but emphasise the benefits of long-term planning, they feel heard,” she says. Often, that acknowledgement is all that’s necessary to attract and retain talent, as it communicates respect and responsiveness. “Choice itself is a value proposition,” Sebesho adds.

A framework rooted in behavioural finance

Behavioural finance studies consistently demonstrate that individuals make suboptimal financial decisions when left to their own devices, particularly regarding long-term savings and risk protection. This human tendency towards present bias and loss aversion forms the foundation for designing responsible benefits frameworks that protect employees from their own cognitive limitations while providing necessary flexibility.

Suggested frameworks

1. Default-plus model

• Set strong, evidence-based defaults for all benefit elections.
• Allow flexibility above minimum thresholds, not below them.
• Use automatic enrolment with opt-out rather than opt-in for core benefits.
• Default contribution rates should meet levels that provide appropriate outcomes (i.e. 12-15% total towards retirement savings if targeting 70-75% replacement ratios). 

2. Tiered flexibility structure model

• Tier 1 (Protected Core): non-negotiable minimums (e.g. minimum retirement contribution, basic disability cover)
• Tier 2 (Guided Flexibility): options within safe parameters with decision support
• Tier 3 (Full Choice): complete flexibility for supplementary benefits above adequate levels

This framework acknowledges natural behavioural patterns: “Younger employees tend to down-weight risk benefits initially, but as they mature, they up-weight risk benefits and increase retirement contributions,” explains Utete. By maintaining group purchasing power while allowing employees to adapt their benefits as their personal and financial circumstances change, employers can offer flexibility that “encourages long-term savings and builds appreciation of saving value and appropriate protection without disregarding short-term financial needs,” concludes Utete. That is at the heart of responsibility.

Sebesho agrees: “It sounds counterintuitive, but offering flexibility encourages long-term savings and builds appreciation of the value of saving without disregarding people’s short-term financial needs”.

Finding a balance

Sebesho acknowledges the limitations that many small employers face. “When we talk about flexibility, we are not suggesting offering options that are not essential and could potentially increase costs for smaller organisations. It’s about identifying the benefits that really matter and making sure that you focus on what will drive employee engagement and attract the right employees.” 

Ultimately, the employer must strike a balance: between flexibility and long-term outcomes, and between the needs of the business and those of its people. 

With the right partner, it is possible to design personalised benefits solutions that are both cost-effective and easy to manage. Responsible flexibility means offering a range of tailored options that meet individual employee needs while ensuring that these options are sustainable for the company and encourage positive behaviours, such as long-term savings. 

In turn, employers benefit from greater retention, higher job satisfaction, and deeper employee loyalty.

*This article originally appeared in the Old Mutual Mindspace Thought Leaders Forum special issue. To read more, click here.