Many US employers offer financial wellness programs to alleviate some of the financial stress felt by employees. In 2015, only 20 percent of US employers with over 100 employees offered financial education. Today, it exceeds 80 percent.
While the number of companies offering financial education programs has substantially increased, only about one-third of employees take advantage of the tools provided. Employers need to encourage better participation for both employee success and ultimate corporate productivity. One way to do this is to approach financial wellness holistically. One size does not fit all. Evaluate your employee population; often it can be divided by generation:
GenZ
Gen-Zers, those employees born between 1995 and 2015, are just starting to enter the workforce. By 2025 they will make up one-fifth of the US labor force so it’s not too early to develop financial wellness programs for this generation. Research shows that the top financial goals for GenZ include building savings/emergency funds, establishing a budget and tracking spending habits. Almost 20 percent of these employees are not saving any money each month and close to 25 percent save less than $50 every month.
Millennials Millennials, those employees born between 1981 and 1996, have generally incurred student loan debt. Assistance in managing, consolidating or paying down this debt will be valued and will set your human resource recruiting efforts apart from competitors. This age group, along with other generations in your workforce, should be encouraged to think about retirement planning. Provide these plan participants with income replacement software tools that show how much they should be saving given their current account balance and age in order to build a paycheck for life at retirement age.
GenX Gen-Xers, those employees born between 1965 and 1980, are sometimes called the “sandwich” generation given the competing financial pressures of caring for their retired parents and preparing their children for college. Digital resources to help these employees manage their finances and access to websites offering basic money courses are an easy way to incorporate financial planning into their lives. Many of these employees may need cash for emergencies and initiatives that include employee purchasing programs are attractive. A purchasing program can be administered through payroll deductions, which cost employers nothing, but enable employees to make big-ticket purchases without incurring credit card debt and finance charges.
Baby Boomers Boomers, those employees born between 1946 and 1964, are facing retirement. One-to-one financial advising is most beneficial to this cohort. Because of the ‘great recession,’ many are seeing a gap in their retirement savings and some are still recouping losses. Better investment management, as well as planning for long-term care costs, are needed by this group of employees. Employer funded long-term care benefits that offer tax advantages for the employer and the employee can be a welcome addition to the financial wellness package.
Targeting the needs of each generation in your workforce will make your financial wellness program more valuable to your employees and increase participation rates. Wellness Workdays has experience developing and implementing programs for all generations. Contact us for more information.