Businessolver Blog

The Multigenerational Workforce Money Makeover

The Multigenerational Workforce Money Makeover
Posted on Friday, May 20, 2016 by Rae Shanahan
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To say the U.S. workforce has changed in the past 20 years would be the understatement of the century.

 

 

 

Finances

From new technologies and a global work environment to an increasingly diverse leadership, the labor force is expanding and evolving more than ever. 

Perhaps one of the biggest changes to the modern workforce has been in its generational makeup. The workplace is no longer the land of the middle-aged man. Just take a look at this snapshot of the current generational representation in U.S. workplaces:  

  • Members of Generation Z, the post-millennial generation born after 1995, are anticipated to make up 20 percent of the workforce by 2020. 
  • In 2015, millennials officially became the largest represented generational group of employees. In fact, U.S. Census Bureau data shows that more than one in three U.S. workers are millennials. 
  • Generation X, which until recently held the title of the largest generational group in the workforce, has shrunk to around 30 percent. 
  • Baby Boomers, who in 1995 accounted for nearly 50 percent of U.S. employees, are approaching retirement and now make up only about 29 percent of the workforce

This data demonstrates just how diverse today’s work environments are, with different people of different backgrounds, ages and experiences working together to solve business problems. When I look at our employee population here at Businessolver, I’m continually struck by how valuable this type of work environment is – we have industry veterans working side by side with newcomers, and the result is a community where everyone is constantly learning and our clients are getting the very best of what we have to offer. 

That doesn’t mean that managing this workforce doesn’t come with challenges though, particularly for HR. Increasingly, employees are looking to their benefits to help them stabilize and manage finances, and the differences between generations can become more pronounced. Employees have different financial concerns and goals depending on their age, priorities and point in life. HR has to be aware of these differences and keep them top of mind when designing financial benefits offerings and support. Like I recently shared with U.S. News, providing ways for employees to educate themselves on items such as budgeting, having an emergency fund, understanding insurance and debt management are all key components, especially with millennials.

On that note, here are some of our top tips to help guide your approach to financial benefits planning:  

  • Listen, don’t assume: As HR pros, our to-do lists are a mile long and the hours to complete our tasks short. While our hearts are in the right place, we often move ahead in recommending benefits, technologies and education to our employees because we think we know what they want even if we haven’t validated it. It’s more important than ever, particularly with a multi-generational workforce, to hold focus groups, examine historical data about benefits use and costs, and leverage that information to develop a clear picture of what exactly employees want. 
  • Understand what motivates: Baby boomers are approaching retirement and want to be sure they have enough saved. Generation Xers may be thinking about buying a home or expanding their families. Millennials are staring down a mountain of student debt and are hoping their employers can step in and help them manage it. And millennials and Generation Zers alike are learning to juggle cost-of-living with long-term savings. Understanding your employees’ motivations and priorities will help you develop a financial benefits program that they’ll be more likely to use and engage with outside of annual enrollment. 
  • But don’t make sweeping generalizations based on age: While each generational group certainly has specific priorities and pain points, it’s important to not make generalizations about a group based on their age. Case in point: A common misconception about younger generations is that they aren’t thinking about savings. Not so, according to a recent study by Facebook, which said that 37 percent of millennials have a financial plan and 86 percent save money each month. What’s more, an increasing number of millennials are worrying about retirement, as recent studies show that millennials will likely need $1.8 million in retirement savings to maintain their standard of living. Millennials will take advantage of retirement programs in a way that is different from Baby Boomers or Gen Xers, to be sure, but that doesn’t mean their age should exclude them from having input or being considered during retirement benefits program design and education. 
  • Remember all employees have one wallet: Today’s employees view their benefits as coming out of the same “wallet” as their daily living costs, debts and other expenses. This “one wallet” mindset means employees want a more holistic approach to benefits offerings and planning. In fact, a Businessolver survey found that 81 percent of employees said they would feel more comfortable if all of their personal assets were included in workplace-related benefits planning.  

Here at Businessolver, we also think technology must evolve with this one wallet approach to financial planning. Increasingly, both employers and employees need more than just a benefits platform that facilitates sign-up. They need recommendation engines with a one wallet approach that manage benefits in a holistic manner – the way employees do. We accomplish this with our MyChoice Recommendation Engine, which uses the financial, physical and emotional aspects of benefits selection to develop a personalized strategy that guides an employee through their options. Whatever technology you use, make sure it’s one that can help your employees arrive at the right decision for them – and their wallet.  

Today’s workforce is changing, and we as HR leaders have to change with it. If we want to recruit and retain the best talent, we have to know the types of benefits that will attract and engage our employees. Understanding the motivations and priorities of a multi-generational workforce is absolutely key to developing a financial benefits offering that meets the needs of every employee.   

This is part of an ongoing series focused on a “one wallet” approach to benefits. Stay tuned for our next post, or learn more by watching our on-demand webinar, “One Wallet: The Evolution of Decision Support to Holistic Recommendation Engine.”