Plan participant demand for workplace advice and education is at an all-time high. More than half of employees would like workplace education that will help them improve their financial well-being, and 35% would welcome their employer pushing them to save more.
Financial wellness directly affects productivity on the job, and it isn’t only individuals who lose out when financial well-being is lacking. Employers also feel the strain of a workforce that has trouble making ends meet. A recent PwC survey found the top financial concern for Millennials (62%) and Gen Xers (55%) is not having enough money to cover unexpected expenses. For 52% of Baby Boomers, it is not being able to retire when they want to. Less than half of each generation says their compensation is keeping up with the cost of their living expenses, with this being true for only 26% of Millennials, 36% of Gen Xers and 42% of Boomers.
Personal financial challenges such as credit card debt, the cost of education, and the need to save for retirement have a meaningful impact on overall employee performance. This stress can lead to employee absenteeism, lost productivity and health issues.
What should plan sponsors do to address this situation?
Sponsors should consider rolling out a program that helps their workers understand what financial wellness looks like at different ages and career stages. Providing financial knowledge and personalized advice is often the first and easiest step. The more custom information employees have, the better.
Plan sponsors should explore and invest in age-appropriate advice and financial wellness for employees, and integrate these programs into corporate benefits. It’s critical that the advice be customized. What is suitable financial advice for someone in their 20s is different from the advice appropriate for someone in their 50s.
Plan sponsors can start this process by understanding the various sets of needs among the participant population being served. Let’s take a look at financial wellness areas of focus, broken out by career stage.
Early career. Entering the workforce, paying back student loans, buying a home, navigating debt issues and advancing a career are all financially challenging. There is so much to juggle for this generation, especially money. Sixty percent of Millennials spend more than three hours a week at work dealing with personal financial matters, according to Bank of America’s 2017 report, “Workplace Benefits Report Supplement: A Closer Look at Millennials.”