Young Employees Think Financial Wellness Benefits Still Have Room for Improvement

The expectations of the modern workforce are evolving just as swiftly as the landscape of employment today. Gone are the days when a steady paycheck alone sufficed as a symbol of financial stability.

For today's young employees, financial wellness is a multifaceted concept that encompasses far more than simply earning a salary.

As managers, you're likely well aware of the shifting dynamics in the workplace. Your role has extended beyond traditional HR functions to encompass the holistic well-being of your employees, including their financial health.

This is where the root of the issue lies – while the conversation around financial empowerment has certainly gained momentum, there's still a stark disconnect between employer efforts and employee needs.

This guide aims to help you navigate an ever-changing working landscape. Along with addressing the concerns of young workers who think there is room for improvement in personalized financial wellness, we will examine the challenges, solutions, and best practices for proper financial education.

Understanding the Financial Wellness Landscape

In today's world, financial wellness encompasses the ability to manage personal finances effectively, make informed financial decisions, and achieve short-term and long-term goals while maintaining financial empowerment.

Simply put, it's the balance between financial aspirations and fiscal reality. It's the assurance that even in the face of unexpected expenses or economic uncertainties, individuals can maintain financial stability without compromising their overall well-being.

The Evolution of Financial Wellness Programs

Financial wellness programs have undergone a significant transformation over the years. What began as optional seminars on retirement planning has evolved into comprehensive initiatives that address a broad spectrum of financial challenges faced by employees.

In the past, these programs might have been perceived as a 'nice-to-have' rather than a 'must-have.' Today, they're recognized as a crucial component of any forward-thinking organization's benefits package.

These programs have adapted to the changing needs of the workforce, offering guidance on everything from managing student loan debt to mental health support in times of financial stress.

Current State of Financial Wellness Among Young Employees

A survey revealed that 46% of employees cite personal finances as their most significant source of stress. Financial instability also isn't confined to low-income earners. 

Even among those earning $100,000 or more annually, 15% report living paycheck to paycheck.¹ This unexpected revelation highlights that financial concerns are widespread across the income spectrum.

For young employees, the picture is no less daunting. Many are grappling with student loan debt, high living costs, and limited financial education. The result? A workforce that’s eager for guidance and support in navigating the complexities of modern finance.

Identifying the Challenges

Creating a comprehensive financial wellness program takes time. The financial journey of young employees is often characterized by unique challenges that set them apart from other demographic groups in the workforce.

Understanding these specific stressors is the first step in addressing the financial wellness needs of this vital segment of your workforce.

• Student Loans and Debt: Student loans have become a major financial burden for many young employees. There are $1.645 trillion in outstanding federal student loan balances, which account for 93.1% of all student loan debt.² The weight of educational debt can significantly impact their ability to save, invest, or even plan for the future.
• Cost of Living: Young employees are often confronted with the harsh reality of high living costs, particularly in urban areas. Rent, housing, transportation, and childcare expenses can consume a substantial portion of their income, leaving little room for savings or unexpected expenditures.
• Lack of Financial Education: Financial literacy isn't a given, and many young employees enter the workforce with limited knowledge about personal finance. They may struggle with basic financial concepts, such as budgeting, investing, and retirement planning, which can hinder their ability to make informed decisions about their finances.

The impact of financial stress extends beyond the individual employee. It affects organizations as well. Employees burdened by financial worries often experience reduced productivity, increased absenteeism, and higher turnover rates. These hidden costs can erode an organization's bottom line and disrupt workplace harmony.

Employee Expectations: What Young Employees Want

Young employees aren't looking for extravagant perks or lavish bonuses. They want practical support that addresses their financial concerns. They want guidance on managing debt, saving for the future, and achieving a work-life balance that allows them to thrive both personally and professionally.

Educating workers about benefits is already challenging for half of US employers, and young employees expect their employers to acknowledge their challenges and provide them with resources if they want to build a strong financial foundation.

It’s a hurdle, but investing pays off. A workplace that fosters financial wellness aligns with their values and encourages loyalty and commitment.

There’s Room for Improvement

As the saying goes, "Change is the only constant," and this adage holds particularly true in the future of financial wellness. The workforce's needs are evolving, and it's essential for organizations to adapt to stay competitive and supportive.

Actively disengaged employees cost companies a staggering $8.8 trillion globally in lost productivity.³ That's not just a figure – it's a compelling reason for HR managers to take action.

Building a Comprehensive Financial Wellness Program

In the quest to enhance personalized financial wellness in the workforce, a one-size-fits-all approach rarely cuts it. To truly make a meaningful impact, it's essential to construct a financial wellness program that addresses the multifaceted financial challenges faced by your employees. 

Incorporate the following initiatives: 

• Financial Education and Training: Knowledge is power, especially when it comes to personal finances. Provide employees with access to financial education and training so they can make informed financial decisions.
• Debt Management Assistance: Debt can be a significant source of stress for employees. Offering debt management assistance, such as debt counseling or debt consolidation programs, can help employees regain control of their financial situation and reduce anxiety.
• Retirement Planning: Retirement planning is a critical component of financial wellness. Comprehensive programs should include resources for employees to assess their retirement goals, understand retirement accounts, and create a retirement savings strategy.
• Emergency Savings: Unexpected expenses can derail financial well-being. Encouraging employees to build emergency savings through automatic payroll deductions or employer-matched savings programs can provide a safety net during challenging times.
• Mental Health Support: Financial stress can take a toll on mental health. Integrating mental health support into your financial wellness program shows a commitment to addressing the holistic well-being of your employees. This can include access to counseling services, stress management resources, or Employee Assistance Programs (EAPs).

Recognizing that not all employees are the same, tailoring financial programs and benefits to meet individual needs is a powerful strategy. Offering flexibility in benefits choices, such as healthcare plans, retirement accounts, and wellness incentives, allows employees to select options that align with their unique financial situations.

Build a Financially Resilient Workforce

It's clear that young employees value financial wellness as something that can be improved. The challenges they face, from student loan debt to the rising cost of living, are real and pressing. But so, too, are the hidden costs that financial stress imposes on organizations, impacting productivity, engagement, and overall employee well-being.

The good news is that addressing these challenges head-on is not only possible but also essential. The path to a healthier, more financially resilient workforce begins with a commitment to providing the resources and support that young employees crave.

The Enrich Employee Financial Wellness Program can help simplify the process. 

With Enrich, you have a powerful tool at your disposal to bolster financial wellness within your organization. Enrich builds a sturdy bridge that connects employee expectations with practical, actionable financial education and support.

Don't just take our word for it – see it in action. Contact Enrich today for a demo and discover firsthand why it's the best solution for your financial literacy needs. 

Build a workforce that's financially stable, engaged, and empowered for the future.

1 - https://www.cnbc.com/2023/06/04/the-top-stress-for-workers-is-finances-including-100000-jobs.html

2 - https://educationdata.org/student-loan-debt-statistics

3 - https://www.gallup.com/workplace/393497/world-trillion-workplace-problem.aspx