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Why Are Millennials so Distracted at Work?

Why Are Millennials so Distracted at Work?

by | Aug 28, 2018 | Blog

Financial stress is a huge work distraction for Millennials in debt and it’s costing the American economy billions. The statistics on student loan debt in this article have been updated as of February 20, 2020. 

Millennials are now the largest generation in the American labor force and they’re distracted by an overwhelming amount of debt. Human resource departments are overwhelmed with solving new issues around financial stress that Millennials are bringing to the office every day.

Around 44.7 million out of 171.3 million American adults have student loan debt and the total amount of outstanding student loan debt passed $1.5 trillion in 2020. The average monthly student loan payment is nearly $400 and roughly 10 percent of borrowers have defaulted on their student loans.

Most millennials have nothing saved for retirement and of those that do, research from E-Trade revealed that 60 percent have already taken an early withdrawal from their 401(k). Nearly half of them use credit cards for monthly necessities they couldn’t afford otherwise.

Millennials are also falling behind when it comes to major life events like getting married and buying a home. All of this affects their work performance, including productivity, retention and turnover, unexplained absences, and presenteeism.

According to a PwC study, almost 60 percent of millennials are financially stressed. Money is a huge issue for them. Bank of America found they spend an average of 4 hours a week on personal finances at work. Close to 20 percent of them have missed days at work due to financial stress.

The American Psychological Association found that financial stress is responsible for 40 percent of turnover and 60 percent of workplace accidents. More than 20 percent of Millennials have changed jobs in the past year (a number 3x higher than those outside that demographic) and Gallup estimates Millennial turnover costs the American economy close to $30 billion per year. It’s advantageous for employers to help employees reduce financial stress to take back productivity and reduce absenteeism, turnover and workplace accidents.

One thing experts agree on: Millennials want help navigating their financial futures. Over 90 percent of Millennials surveyed by Bank of America say they would participate in a financial education program provided by their employer. In the same survey, roughly 80 percent of Millennials say their employer was influential in getting them to save for retirement. According to Willis Towers Watson research, employees are looking for financial wellness tools to track spending, saving, assess their financial position, and set financial goals.

With an extremely tight labor market, employers have become highly motivated to address their Millennial employees’ desire to gain financial wellness. What the early adopters of best-in-class financial wellness programs have begun to see is that greater employee financial wellness also improves productivity and retention, and helps them stay competitive in a tight labor market.

As part of a larger financial wellness program, some companies have instituted a student loan benefit and the IRS approved tax-free employer matched 401(k) contributions for student loan repayments in 2018. The Society of Human Resources (SHRM) reported over 50 percent of U.S. companies offered financial wellness programs in 2019, more than doubling the less than 25 percent who did so in 2015. 

Even though more employers are offering financial wellness programs it doesn’t mean employees are using them. In other words, if you offer a financial wellness program that isn’t sophisticated, mobile-first, in the cloud, that offers different kinds of assessment tools and personalized information and solutions, it may well get overlooked in the sea of other benefit paperwork that has to be reviewed and managed.

For increased employee engagement select a financial wellness program, like Best Money Moves, that has the tools, information, and functionality your employees need. Best Money Moves is a mobile-first service that offers budgeting, resource articles, confidential counseling, free credit score, and personalized information and solutions for employees to use to measure and dial down their financial stress.

All of which will help your employees settle down and get back to work.

If you want to learn more about how Best Money Moves can bring financial wellness to your company download our whitepapers and sign up for a demonstration here.

Your Millennial Employees Aren’t Buying Homes Now. Here’s Why:

Your Millennial Employees Aren’t Buying Homes Now. Here’s Why:

by | Jul 16, 2018 | Blog

A recent study from the Urban Institute shows that many Millennials are forgoing home buying due to student debt and high rental costs.

The data is in: With a different socioeconomic makeup and different living preferences than generational predecessors, your Millennial employees are less likely to be homeowners than Gen Xers or baby boomers.

A recent report from the Urban Institute found that Millennial employees are more likely than their counterparts in older generations to delay marriage and childbearing, life milestones that often lead to homeownership.  

And while Millennials as a whole are owning less homes, black and less educated Americans are falling even further behind. Minority households have homeownership rates close to 15 percentage points lower than white households. Additionally, there is a gap of about 10 percentage points in the homeownership rate for households with high school or less education versus those with some college education or more.

High rental costs and increasing student debt haven’t helped Millennials who are looking to save money for a down payment. In a recent federal survey, 53 percent of renters said a barrier to homeownership they faced was  “I can’t afford a down payment to buy a home,” and 33 percent said “I can’t qualify for a mortgage to buy a home.”

The report also noted that Millennials prefer to live in high-cost cities with inelastic housing supplies. These cities — like the East Coast’s Boston and New York City and the West Coast’s San Francisco and Los Angeles — tend to have greater urban amenities and more job opportunities, making them more desirable for Millennials to live in.

To address these issues, the Urban Institute offered four key policy recommendations:

  • Increase homeowner awareness and financial knowledge by providing online training as well as education in high school and college
  • Utilize financial technology for a more efficient mortgage process
  • Include rental and utility payment history data in Millennials’ creditworthiness evaluation
  • Adapt land-use and zoning regulations to increase the housing stock

Whatever the next steps forward, it’s clear something has to change to enable a greater number of Millennial employees to set down more permanent roots and purchase homes.

Which Benefits Do Millennials Want? Health Insurance, For One

Which Benefits Do Millennials Want? Health Insurance, For One

by | Aug 23, 2017 | Blog

In this week’s Best Money Moves roundup, we take a look at news stories and new research studies that may impact employee benefits and HR issues. We hope you find this news roundup helpful, and we’d love your feedback.

Forget ping pong tables and nap pods. Millennial workers want health insurance.

Millennial turnover is a challenge for many businesses. They’re the generation most likely to change jobs, Gallup found, with a whopping 60 percent of millennial workers open to new job opportunities. But luckily, your company doesn’t need to invest in an on-site kombucha bar to attract young talent.

As it turns out, the number one benefit millennials want is health insurance. Data shows that half of millennials have been hit with unexpected medical bills. This relatively traditional offering could be what sets your company apart.

Already offer health insurance? Here are four other employee benefits millennials want.

Credit cards have changed the way we pay for everything, but 50 percent of Americans can’t understand their credit card agreements and many of them are drowning in debt. Here’s how you can help.

Open enrollment is still a few months away, but that doesn’t mean workers can’t start preparing to get the most out of their benefits. Learn where to focus.

Focusing on financial wellness boosts retention. The vast majority of financial executives (82 percent!) believe their company would benefit from having a financially secure workforce. What are you waiting for?

Unlimited vacation doesn’t work for everyone. Global aviation strategy company SimpliFlying implemented a mandatory vacation policy instead that increased creativity, happiness and productivity.

Your employees need a financial plan. In fact, according to a Schwab Center for Financial Research survey, 54 percent of people with a written financial plan increased their 401(k) contributions in the past year. Help them get started.

The key to workplace wellness is empathy. That means offering benefits that recognize the different backgrounds and needs of your employees. Family health and financial wellness are good places to begin.

U.S. employee engagement programs are falling short. According to Gallup, only 33 percent of U.S. employees are engaged at work and there are two reasons why.

Is your office going to the dogs? With more than one-third of Americans owning pets, it’s not surprising that some companies are using pet-friendly benefits to attract employees. Here are some pros and cons.

Graduates have more student loan debt that ever before. While only 4 percent of employers currently offer student loan repayment assistance, these benefits could help attract and retain talent. Are they right for your employees?

 

Have something to add? Email info@bestmoneymoves.com.