4 Ways To Help Young Workers Make Financial Decisions
BrightPlan Team
According to BrightPlan’s 2021 Wellness Barometer Survey, 68% of millennials and Gen Z reported financial stress, compared to 61% of Baby Boomers and Gen X. Financial stress can have direct impacts on employees’ physical health, productivity, and engagement. In fact, our survey found that financial stress costs U.S. employers an estimated $4.7 billion per week in lost productivity.*
To help mitigate these effects, some companies are prioritizing helping younger generations make decisions to improve their total financial wellness. Here are four leading strategies:
1. Connect To Their Values
Initially, it can be hard for employees to see beyond the short-term sacrifices they’re making to pay down debt or stick to a restrictive budget. When communicating your company’s financial wellness benefits, help employees see why improving their financial health is important. It’s not simply what they’re working for now—whether it be a car, house or vacation—it’s about the why, which looks different for everybody. Value-based goals, such as increased freedom, stability, and security for themselves and their families, help employees connect the dots and show up to work each day with purpose.
2. Educate And Empower
Our 2021 Wellness Barometer survey revealed that an alarmingly low number of employees have basic financial literacy. This is especially true for younger workers who aren't taught crucial financial skills and don’t feel as financially confident as previous generations. Without financial literacy, young employees may not understand the impact of their financial decisions. By educating your employees and giving them the financial resources needed, you can help them develop solid strategies to pay down debt, build emergency savings, grow their money, and avoid common financial pitfalls.
3. Help Them Reduce Debt
Many employees start their careers with a student loan burden, averaging $39,351 per student borrower. In addition, millennials and Gen Z workers are accumulating credit card debt. Continuous accumulation of debt often leads to a debt spiral, making debt payment a more urgent need than putting aside money for retirement. For these reasons, many employers are helping their employees pay down debt through company contributions, diverting a portion of the 401(k) matching funds to debt payment, or educating them on their debt repayment options.
4. Make It Personal and Scalable
Your employees’ financial goals are as unique and varied as they are. Some employees may be focused on debt repayment, others on saving for a home—and they’re looking for guidance and resources that meet them where they are. Financial wellness solutions should support employees at every stage of life, providing them with helpful tools and information specific to their current financial situation and future goals.
Final Notes
Millennials and Gen Z grew up in the wake of the Great Recession and now their experience in the working world is punctuated by a pandemic and continued economic uncertainty. As these two generations continue to dominate the workforce, employers have an opportunity to expand their benefit programs to support young employees’ financial needs. By helping them tackle student debt, save for emergencies, and master basic financial literacy, you can help reduce their financial stress and drive workplace productivity.
