Numerous studies have linked an employee’s mental and physical health to workplace productivity. Savvy organizations have implemented health and wellness programs to help employees to bring their best selves to work. A new facet of the discussion is how an individual’s financial health can impact success on the job. And, of course, finances and the workplace are intrinsically linked, as income fuels lifestyle and influences decisions about homes, schools, vacations and even what food we buy.
While financial worries can affect any generation, many employers are beginning to focus on how Millennials are handling their finances. Why? According to data provided by Goldman Sachs, Millennials (those born between 1980 and 2000) make up the biggest generation in U.S. history, surpassing Generation X and Baby Boomers, and they’ll be reshaping our economy and workplace dynamics for decades to come.
- Millennials: 92 million
- Generation X: 61 million
- Baby Boomers: 77 million
According to Pew Research, Millennials now make up 35% of the US labor force. The sheer size of this generation demands attention, and employers must adapt to the unique needs, expectations and demands of this cohort.
What is Financial Well-Being?
The Consumer Financial Protection Bureau defines financial well-being as having financial security and financial freedom of choice, in the present and in the future. And, according to multiple studies, including the 2017 Global Benefits Attitude Study conducted by Willis Towers Watson, most people aren’t doing so well:
- 48% of employees often worry about their current financial state
- 59% of employees often worry about their future financial state
These worries can negatively impact job performance, as those who feel they are struggling financially are more likely to be absent from work, stressed, less engaged and easily lose focus. And, in a survey conducted by the International Foundation of Employee Benefit Plans, 60% of workers reported being unable to focus at work, and 76% reported increased stress when finances are unsettled.
Focus on Millennials
Many of the financial pressures Millennials face are the same as those in prior generations— paying down student loan debt and growing responsibility as caregivers to both aging parents and to their own children, bringing new challenges and budget woes. In addition to meeting these obligations and satisfying basic living needs, Millennials also aggressively pursue their passions such as traveling, hobbies and giving back to their community—activities that require money.
An alarming study recently highlighted the bleak financial outlook for Millennials. Research conducted by the Retirement Institute on Retirement Security found that 95% of Millennials are not saving adequately for retirement, with 66% of the group not saving anything at all. Coupled with frequent reliance on credit cards to cover monthly expenses, some Millennials are facing a frightening financial future.
Unique Financial Pressures
How is this generation different from its predecessors? The explosion of social media networks have incredible influence over the Millennial generation’s daily decisions and emotions. The same internet that enables young parents to crowd-source an all-natural cure for diaper rash also provides pressures to meet unrealistic lifestyle standards with snapshots of exotic vacations, perfectly arranged meals and expensive wardrobes displayed across social media feeds. Unfortunately, the desire to curate an “Instagrammable” life to gain social media followers and “likes” has the potential to result in heavy financial consequences as a result of impulse purchases they cannot afford.
Millennials are also referred to as “digital natives”— unlike their parents, they don’t remember a time without the internet and high-speed technology as part of their daily lives. As a result, they are accustomed to instant access to everything from a restaurant review to a driver who will arrive at the touch of a button. As convenient as these technologies are, they have also given birth to an expectation of instant gratification where exercising control is difficult and consequences are often an afterthought.
How Can Your Organization Help?
If any of your vendors provide financial health and well-being, your organization can help those dealing with financial struggles to make positive, lasting changes. Here are a few tips to target the Millennial audience:
- Consider supplementing traditional retirement planning meetings with an interactive webinar or a series of short videos that are easily accessible to this mobile generation to access on demand.
- Offer financial literacy training. According to a survey by George Washington University, only 8 percent of millennials polled had a high level of financial knowledge, and only 24 percent showed even a basic understanding of how to manage their money. Planning a budget, balancing a checkbook and saving for unexpected expenses are all skills that can be taught. Check with your local bank or financial services providers to enlist their help.
- Millennials are generally more open to talking about their emotions and mental health, and may simply be unaware of the services available through your various employee well-being programs. In addition, the experts at BHS can help your employees to have an honest conversation about their current financial state and change their approach to handling money.
- Check out this earlier BHS blog post for more tips to help all of your employees with financial planning and other work/life balance issues.
Need help tailoring a financial wellbeing program that provides financial consultation and all the needs of your employees… especially Millennials? Get in touch.