Three ways your workplace can help
with financial stress
November 9, 2021
By Brian Bender, Head of Schwab Retirement Plan Services
Just 24 years old at most, Gen Z workers are entering adult life and starting careers at a time of profound uncertainty.
Compared to the average for all ages, Gen Z workers are almost twice as likely to say that financial stress over the past year has impacted their ability to do their jobs. Stress can have negative impacts on individual motivation and physical health, which can also balloon into broader effects on organizational health and productivity. In my conversations with the employers we serve, it’s clear that employee wellness, including financial wellness, is top of mind for many as they focus on helping workers stay engaged, especially those who are relatively new in the workforce.
Our annual survey of 401(k) plan participants shows the importance of workplace resources to younger workers who want help managing their money. Tools and guidance in three areas can help workers de-stress their financial lives and help employers attract and retain Gen Z talent in a competitive labor market.
1. Address top money worries
Start with triage on the most immediate money stressors.
Many people have access to online tools that provide an understanding of their overall financial picture, along with an action plan. One in two Gen Z workers say they would be very likely to use this kind of tool if it was offered by their employer.
Gen Z workers also say they want help from employers with specific financial challenges, especially managing debt and expenses today so they can save more for long-term goals like retirement.
2. Encourage good financial behaviors
After we emerge from this period of health and economic challenges, many younger workers say they are likely to save more, pay off their debt, increase contributions to their retirement accounts and invest more overall.
Employers can help employees with these goals by offering not only core benefits such as health insurance and 401(k)s but also financial wellness programs specifically designed to help workers identify their next best step based on their personal situation.
3. Take advantage of advice
Almost two-thirds of Gen Z participants say their financial situation warrants professional advice and they are flexible about how they receive it. Gen Z is very likely to follow human advice but also more likely than older generations to follow computer-generated advice as well.
The need for guidance starts with the most popular benefit for workers of all ages - the 401(k). Gen Z workers are more likely than other generations to say they don’t feel on top of their 401(k) and half say they don’t know what investments to choose to have enough to retire. By providing access to personalized advice, employers can lean into the preferences of these young workers and help them drive better long-term financial outcomes.
The beginning of a career is an exciting but uncertain time in the best of circumstances. Right now, it is also a stressful time. Young employees in particular are looking to their workplaces for support. Employers can enhance recruitment and retention efforts by offering retirement benefits, advice, education, and other resources designed to help these workers take control of their financial lives.
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