Generation Z, who are all under 25, now make up 25% of the US workforce. This has led to businesses scrambling to find ways to target this demographic to join their ranks and stay with the company.

A recent Teachers Insurance and Annuity Association1 study found that one of the best ways to attract Gen Z is by offering financial wellness.

When asked, Gen Z felt that employers have a responsibility to help workers improve their financial wellness. While only half of older generations believe this is true, two out of three Gen Zs hold this sentiment. 

Despite the desire to have these benefits, only half of those surveyed receive them from their employers. Additionally, only half of employers believed it was their responsibility to help employees achieve financial wellness. 

However, this opinion comes at a cost. Financially stressed employees affect the bottom line.

Stressed employees are more likely to be absent, less likely to be productive, and land the company with higher healthcare costs.

Overall, financial stress costs companies an estimated $300 billion2 per year.

Offering financial wellness can help.

The TIAA study found that those participating in employer-sponsored financial wellness programs were twice as likely to have a high financial wellness rating as those who did not. And employees with strong financial wellness ratings make better employees.

It's a win-win scenario.

Financial Wellness Elements to Look For

Gen Z is savvier than their older peers, with one-third having already attended some kind of financial education class – that's triple the number of millennials3.

However, after seeing the financial issues of older generations, they want more.

As an employer looking for the right financial wellness benefits to attract Gen Z, you need to keep in mind that not all programs are created equal – and not every Gen Z employee wants the same thing.

That's why it is important to find a holistic financial wellness program that offers a wide range of information, tools, and services that you can personalize for each employee to meet their individual needs.

Generally speaking, Gen Z has said that they want to understand:

  • Basic financial terminology like 401(k), HSA, and tax-deferred status
  • Retirement savings
  • Debt management
  • Budgeting
  • Emergency savings
  • Student loan repayment
  • Healthcare cost management

Additionally, Gen Z wants information they can rely on.

Currently, eighty-five percent4 rely on their parents and family for financial information but realize they are not getting the most up-to-date information.

Many parents do not have the needed financial knowledge, especially when it comes to newer financial products and ever-changing tax laws.

Offering a financial wellness program is key to this group of employees.

Communicating the Benefit

The TIAA survey found that despite many employees wanting financial wellness benefits, only about half of those with access to these benefits (aside from retirement savings) actually use them. The most used benefits include:

  • Saving for retirement – 65%
  • Information on guaranteed income – 56%
  • Improving credit score – 54%
  • Saving for education expenses – 52%
  • Investment help – about 33%
  • Student debt – about 33%

What is creating the disconnect for employees? There are several cited reasons for not using the benefits – like worries about hidden costs and concerns about disclosing financial information.

Employees also are not sure of the effectiveness of the programs, don't feel the programs address their needs, don't know how to sign up for the program, and some don't know the programs even exist.

On top of that, the 2021 Employee Financial Wellness Survey5 found that 20% of employees wait until they experience a crisis before seeking guidance.

All this means that not only do you have to find the right program, but you also have to find the right way to communicate the program to your employees. When communicating with Gen Z, keep the following in mind. Gen Z prefers:

  • Texts instead of emails
  • One-on-one vs automated
  • Real experiences with people they know instead of personas
  • Interactive instead of one-way communication
  • Personalized communication based on current data – i.e., current financial concerns

By offering financial wellness and using the best delivery messages, you can target potential Gen Z employees and keep them happy once they become part of your workforce – all while increasing your bottom line.

 

1 - https://www.tiaa.org/public/pdf/2022_financial_wellness_survey_final_results.pdf 

2 - https://www.uml.edu/Research/CPH-NEW/Worker/stress-at-work/financial-costs.aspx

3 - https://www.raddon.com/sites/default/files/genz-executive-summary.pdf

4 - https://www.nacacnet.org/news--publications/journal-of-college-admission/instant-generation/

5 - https://www.pwc.com/us/en/services/consulting/workforce-of-the-future/library/employee-financial-wellness-survey.html