Advisor with a happy couple
Employers have a critical role to play in meeting the basic needs of their employees' lives. This is not news for those of us working day in and day out to help provide protection and financial security for working Americans. However, recent data shows that benefits in the workplace can support not only the physiological and safety needs of employees, but also their sense of belonging and trust at work. In fact, most employees (52%) believe a company's commitment to honesty, fairness, and respect is proven through the financial and physical security the employer provides.
We are in a transformational moment in the world of work – with five generations active in the workforce. But how can employers best support the needs of this evolving employee population? It starts with understanding that employees' needs differ by life stage — and recognizing that the benefits an employer offers are one of the clearest signals of a company's values.
According to recent Principal® Work and Work survey data, employees who feel their benefits are tailored to their life stage are 1.2 times more likely to feel included and 1.7 times more likely to trust company ethics. So how can employers ensure their total benefits and compensation package aligns with the life stages of their diverse employee base? Maslow's Hierarchy of Needs offers a helpful framework.
In 1943, psychologist Abraham Maslow published a theory of human motivation.This theory identifies the core needs that must be met for individuals to truly thrive – a theory still widely used today. Maslow's hierarchy can be seen in the workplace when employers effectively support their employees' foundational needs. As a result, those employees are more likely to experience accomplishment and achievement. This has a waterfall effect, because according to Maslow, when our foundational physiological and safety needs are met, we are more equipped to fulfill other needs, including self-actualization – the tip of the pyramid. With this framework in mind, let's take a closer look at how each of these needs can be supported in the workplace.
Physiological needs: The foundation for wellbeing
At the base of Maslow's hierarchy are physiological needs — the essentials for human survival such as food, rest, and basic physical functioning. In the workplace, this level can be provided through fair and competitive compensation that allows employees to meet daily living expenses. It also includes policies that support rest and recovery, such as paid time off. This is particularly important as average work-related stress levels are nearly double national averages for general life stress. This stress is felt more acutely among Gen Z employees, who report higher levels of burnout and work-related anxiety relative to older generations.
Safety needs: Personal security, resources, health, property
After stability comes security. Employees want confidence that their health is protected, their income is reliable, and their long-term financial future is on track. Benefits such as health, dental, and vision coverage, life insurance, income protection through disability insurance, and retirement plans help employees feel secure not only today but in the future. Data shows that employees with access to health and wellness benefits are 22% more loyal to their employer, and the same increase in loyalty is seen among those with access to retirement benefits, like a 401(k) with an employer match.
Belonging: Friendship, family, sense of connection
Belonging centers on connection — to colleagues, to purpose, and to the broader life employees are building outside of work. While relationships and family may exist beyond the office, workplace policies shape whether individuals feel supported in those roles. Policies that support family caregiving, paid parental and medical leave, and professional development contribute directly to this sense of connection. These offerings reinforce a culture where individuals feel valued and supported and are more likely to stay and grow in the organization.
While these needs are universal, the way employees experience and prioritize them varies by life stage and generation. These needs are not met with a one-size-fits-all solution; customization is required. For example, Gen X employees may prioritize benefits that support caregiving and retirement readiness, while Gen Z employees may place greater value on mental health resources, flexibility, and opportunities for growth. Effective communication is essential to ensure employees understand how their total compensation and benefits package support their current life stage and future goals. Employers should regularly ask: Does our total rewards strategy truly support the needs of our workforce — and how will that strategy need to evolve over the next five years?
When benefits are considered through the lenses of human needs and life stages, organizations can more easily identify gaps and opportunities they may not otherwise recognize. This approach presents an opportunity to move beyond plan comparisons and toward a more strategic benefits program, personalized for your workforce.
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