Three Ways You Can Help Your Millennial Workforce Overcome Financial Challenges
Helping Your Millennial Workforce Overcome Financial Challenges
The number of Millennials in the workforce is on the rise. According to the Pew Research Center, Millennials, born between 1981 and 1996, account for one in every three workers in the U.S., making them the largest generation in the U.S. laborforce.
Millennials are acutely aware that they will likely have to work longer than previous generations. Long gone are the days of graduating from high school, getting a job, and being able to afford a house, a station wagon, and the average 2.5 kids. Millennials are, on the whole, more educated than employees from other generations, but with that comes significant student debt. A financial crisis also loomed as a majority of the older Millennials were entering the workforce. This combination caused wage stagnation and periods of unemployment which forced many Millennials to delay traditional adulthood milestones like buying a home, getting married, and starting a family - much less saving for retirement.
Today more than 48% of Millennials are stressed about finances and admit that the stressors of finances on their day-to-day lives trickle down into their health, relationships, work attendance, and productivity. Studies suggest that employees with high levels of financial stress lose 41% more work time to absences and are 32% less effective at work. In other words, it affects all aspects of their lives, but is undoubtedly hurting their performance at work. While employers may understand these challenges, they often struggle to support the growing millennial workforce in reaching their financial goals.
Creating a Culture of Support
72% of Millennials say they are more attracted to and likely to be loyal to employers who care about their financial wellbeing, and that does not mean just matching contributions to their retirement plan. Employers have an opportunity to educate, mentor, and guide their employees. What does that mean for your business?
For starters, you don’t have to do it alone. Working with a qualified third-party financial advisor can help you take a first step in providing your employees with the expertise they need to gain financial freedom and reduce their stress. Advisors can not only assist with building and managing retirement plans, such as 401(k) or 403(b) plans, but they can work with employees one-on-one to provide actionable financial advice on areas like debt reduction, emergency savings and managing short- and long-term expenses. This support is helping employers create productive, thriving workforces without requiring them to take on the burden of financial advice internally.
Communicating the Right Way
Another important piece of the financial wellness puzzle is ensuring that your organization is using technology to its advantage. Benefits are important, but they need to be accessible to your employees in a way that they can manipulate. Millennials are the first batch of employees to be children of the internet. Their development paralleled the advancement of laptops, mobile phones, and social media. Employers who want to successfully create a culture of financial wellness would be wise to utilize these tools. Easy to understand web or mobile interfaces are paramount to increasing financial literacy in a generation used to learning visually and accessing information at their fingertips.
Savings for Life
Though Millennials are primarily concerned with short-term financial goals, the pressure of retirement savings, or lack thereof, weighs on them as well. Employers have an opportunity to help their workforce lay the foundation at an early age to maintain the standard of retirement living that they want. Millennials, unlike the Boomers and Gen X’ers, are rarely offered defined benefit plans like pensions, but often have the option to participate in defined contribution plans such as 401(k)s or 403(b)s. In order for these programs to work, employees need to opt in. Consider using auto enrollment to help get your employees started contributing to their retirement. Other features like auto increasing contributions year-over-year have been found to set more people up to achieve their individual retirement savings goals. Employers have an opportunity to auto-enroll employees when certain criteria have been met. Your financial advisor can help define the parameters that trigger auto-enrollment or auto-increased contributions - taking the burden off you.
When employers build loyalty with their growing millennial workforce, they can increase productivity and lower turnover rates. Creating a culture that helps these workers establish financial freedom from debt and stress is one place to start. If you’re interested in more information on how financial wellness can revolutionize your benefits offering, please reach out to CBIZ Retirement Plan Services.
 Gladych, Paula Aven. “Millennial 401(k) participation dependent on auto-enrollment,” Benefits Pro, December 14,2012, https://www.benefitspro.com/2012/12/14/millennial-401k-participation-dependent-on-auto-en/?slreturn=20191011195010.
CBIZ Retirement Plan Services is a trade name under which certain subsidiaries of CBIZ, Inc. (NYSE Listed: CBZ) market investment advisory, investment management, third party administration, actuarial and other retirement plan services. Investment advisory and investment management services offered through CBIZ Investment Advisory Services, LLC, SEC Registered Investment Adviser. Investments, investment advisory and investment management services may also be offered through CBIZ Financial Solutions, Inc., Member FINRA, SIPC and SEC Registered Investment Adviser, dba CBIZ Retirement Plan Advisory Services. Third party administration, actuarial and other consulting services offered through CBIZ Benefits & Insurance Services, Inc.