Compared with previous generations, Millennials and Gen Zers have higher expectations for the workplace — and they aren't willing to settle for employers who don't prioritize their well-being. In fact, one in four Gen Zers and one in three Millennials say they're in the process of looking for a new job, according to Betterment’s latest survey of 1,000 full-time employees. The survey examined the employee's understanding of financial wellness and asked them to rate their own while asking for examples of benefits they are looking for from their employers due to the economic impacts of the pandemic and The Great Resignation.
“Millennials and Gen Zers work to live a great life, not live to work,” says Nadia Vatalidis, the VP of People at Remote, which offers international payroll, benefits, and compliance services for distributed employees and contractors. “Understanding and supporting this mindset enables companies to build policies that are genuinely useful for talent retention.”
One way to support this mindset is to offer young talent the financial well-being offerings they need. While Millennials (born between 1981-1996) and Gen Zers (born between 1997-2012) are known for being digitally savvy and bullish on financial opportunities like cryptocurrency, they also have financial well-being gaps that employers can help close.
Millennials, Gen Zers, And Their Money
84% of Gen Zers and 79% of Millennials would likely leave their job for an employer that offered better financial benefits.
58% of Gen Zers and 62% of Millennials said their financial stress levels are higher than pre-pandemic.
46% of Gen Zers and 47% of Millennials live paycheck to paycheck and worry they won’t be able to cover their expenses.
47% of Gen Zers and 32% of Millennials do not have an emergency fund.
Only 26% of Gen Zers and 32% of Millennials take advantage of all their employers' financial wellness offerings.
Data shows that there's an untapped opportunity for employers to upgrade their financial wellness offerings to better meet the needs of these two generations.
"Millennials and Gen Zers were raised with a different perception of work," explains Vatalidis. "They want to work for companies where they feel they belong, in roles that make them feel fulfilled but also that allow them to be fulfilled outside of work — and financial well-being is a crucial part of that."
Employers have five key opportunity areas to build belonging and meet Millennials' and Gen Zers' financial expectations.
1. Teach Financial Literacy
While Millennials and Gen Zers often lead trends, they're behind on financial knowledge. More than four in ten (44%) Gen Zers who are not investing say it’s because they don’t know how to start.
“Sharing knowledge and building documentation that enables employees to make their best financial decisions is something that has been lacking across the world of work for too long,” says Vatalidis.
Right now, most Millennials and Gen Zers turn to social media platforms like YouTube and TikTok as their go-to source for financial education — marking an opportunity for employers to offer educational benefit opportunities such as workshops, coaching, or online learning. “Teaching financial literacy is a great way to build a culture that enables financial well-being, increases knowledge, and helps align a company better with personal financial growth goals,” explains Vatalidis.
It can also be life-changing for your early career talent. “In the early stages in your career, understanding everything from retirement planning to managing finances has a huge impact on later life,” says Vatalidis.
2. Embrace Pay Transparency
Millennials and Gen Zers grew up with the Internet and had more access to information than previous generations, including pay transparency. According to LinkedIn, 81% of Gen Zers and 75% of Millennials agree pay transparency could lead to greater pay equality.
As companies play catch up, some states are trying to get ahead on pay transparency while platforms like Glassdoor and LinkedIn already share salary insights. Still, "there's a lack of transparency on accurate compensation data," says Vatalidis, "and whether a company has pay transparency or not, employees typically have access to pay guides and industry reporting."
If you show you value equity and transparency, Millennials and Gen Zers will be less likely to shop for other salaries knowing they're being paid fairly.
3. Help With Student Loan Management
Chances are your Millennial and Gen Z employees arrive at your company with debt. Bloomberg reported that more than one in three (36%) of older Gen Zers (members of Generation Z born between 1997 and 2002) had student debt as of June 2022. Millennials are also reported to hold 31% of student debt.
And it’s holding younger generations back. Data shows that 74% of Gen Z and 68% of Millennials who took on student loan debt for their higher education delayed a significant financial decision due to their debt. “Providing a perk that includes advisory advice on loan management or another financial acumen can change someone’s life and their relationship with money,” says Vatalidis.
Plus, providing student loan management helps increase equity, as research shows debt affects marginalized communities at higher rates. (Women hold roughly two-thirds of all student debt in the US, and Black college grads owe an average of $25,000 more in student loan debt than White college grads.)
4. Provide Wealth-Building Opportunities
Younger generations are all about finding new ways to build wealth, with Millennials being most likely to hold cryptocurrencies and collect NFTs.
Still, many Millennial and Gen Z individuals are nervous about their financial future. Deloitte’s 2022 Gen Z and Millennial Survey found that 31% of Millennials and 26% of Gen Zers aren’t confident they can retire comfortably. “Companies that care about their staff should care that they have the tools they need to reach their life ambitions,” says Vatalidis who thinks wealth-building opportunities should be a part of all modern benefit programs.
“Millennials and Gen Zers are hyper-conscious about maximizing income, and as an employer, companies need to keep up — or risk losing top talent."
5. Keep It Flexible
According to Deloitte, many Gen Zers and Millennials prefer hybrid or remote work, and saving money — on expenses like commuting, clothes, and dry cleaning — is a top reason why.
And Vatalidis agrees. "Flexible working conditions take away a significant amount of unnecessary imposed costs for employees," says Vatalidis, who also points to the Global Workplace Analytics which estimates that the average employee could save between $600-$6,000 per year by working from home just half the time.
"If you're an early career stage employee, this can be a significant part of your take-home pay," explains Vatalidis. And without flexibility, "even with commuter benefits and team lunches, the employees are left with a bill they have to pay before they can even be paid themselves."
The Next Era of Talent
Younger generations are influencing the financial services industry by raising the bar on what financial well-being benefits companies are offering. And that's a good thing.
"Employers should look at financial well-being benefits as a way to partner with their employees on building their future — both within their companies and outside of them in their own lives," suggests Vatalidis. "It is a way of empowering them to be fully satisfied outside work so they can bring their best self to the table daily."
And when employees feel they're thriving, they won't think about leaving. "When young talent feel like their company is investing in them — beyond the value they add to the business — they return the favor in loyalty and drive." So, which benefit will you be providing first?
