11 minute read
The 3-Part Plan To Attract Gen Z Employees
Pet insurance? Sign me up!
The newest generation to enter the workforce is especially focused on their finances and well-being.
By Kim Buckey
By the year 2030, three in 10 of those in the U.S. workforce will be members of Generation Z (individuals born between 1997 and 2015). That’s the word from the U.S. Bureau of Labor Statistics. Although there’s nothing groundbreaking about segmenting employees by generation, given the sheer size of this latest workforce cohort, it may be worthwhile to focus on Gen Z as human resource departments consider their talent attraction and retention strategy.
Studies have shown Gen Z to be a very practical generation and particularly focused on finances. However, Gen Z’s priority on finances does not directly translate to salary alone. Having seen the millennials before them navigate significant credit card debt and student loans, this incoming generation is looking for financial support in every aspect of their lives. Gen Z employees have a long-game perspective when assessing their benefits packages, which means HR and benefits brokers should too.
Knowing that benefits are a vital piece of the attraction and retention puzzle, HR leaders should make sure they package their benefits offerings with Gen Z expectations in mind. And offering top-tier benefits is only the first part. HR and benefits brokers must also effectively communicate those benefits to Gen Z prospects and employees. They need to understand why and how the benefits are competitive in order to find them compelling.
PART 1: Make financial wellness the crown jewel of your benefits package.
Gen Z wants to be able to custom-tailor their benefits coverage, particularly regarding financial wellness. With many starting off their careers while carrying student debt, they are all too aware that the world is an increasingly expensive place to live. For example, an Ameritrade Financial Disruptions Survey revealed nearly half (47%) of Americans believe that cost of living is the biggest threat to their financial security, and another 44% also fear the rising cost of health care.
Nearly one-third of Gen Zers prioritize health insurance as their most desired benefit, and one-quarter prioritize 401(k) and retirement benefits, according to the Zippia 2020 Generation Z Job Seekers Report. As such, employers featuring financial wellness in their benefits packages will certainly want to target this group, but this approach should not
stop at Gen Z. In fact, a Prudential survey showed eight in 10 workers say they want their company to provide benefits central to their economic well-being.
Employees of all ages consider benefits such as health, disability and life insurance; paid family medical leave; and emergency savings programs important to their financial resilience, Prudential’s 2021 Pulse of the American Worker Survey revealed. That means HR and benefits brokers should stay creative and focus on how other benefits — especially health insurance — relate to employees’ overall financial wellness. Offering voluntary benefits such as buyup life or disability coverage; critical illness, hospital indemnity and accident insurance; or even pet insurance can provide an important safety net for employees and their (two- and four-legged) dependents.
PART 2: Demonstrate how your benefits packages support financial wellness.
To support employee financial wellness, employers should make clear exactly how their offerings can — both directly and indirectly — support and supplement their workers’ security. Benefits brokers should focus their communications on what employees want to know, what they need to do and what resources are available to help.
Keep in mind that for many Gen Z employees, this may be their first experience in selecting and using benefit plans. This provides a unique opportunity to provide
education about choosing and using benefits coverage and to provide them with the decision-making skills they’ll need going forward. Explaining basic terminology and key concepts, as well as the economic impact of benefit decisions, will go a long way toward making workers — whatever their age — feel supported. In fact, almost 45% of respondents to a recent DirectPath study said that personalized education during the onboarding process would most improve their understanding of how health insurance works and what they should consider when choosing and using their benefits.
To start, brokers should spell out exactly how employees’ choice of coverage can make a major difference in their financial wellness — for example, demonstrating how the lowest
Who Is Generation Z?
• Looking for a career that provides meaning in an environment that promotes equality. • Desire career growth over higher salaries. • Digital natives — prefer
communicating electronically
over face-to-face interactions. • Risk averse. • Entrepreneurial — 55% more likely than millennials to start their own business.
Source: Nebula.com
premium plan is not always the most cost-effective, and how health care flexible spending accounts and health savings accounts can provide funds to offset medical costs while helping to reduce taxes. Employees can especially benefit from one-on-one support during the enrollment process and throughout the year. Benefits educators or advocates can walk employees through enrollment and answer questions in real time throughout the year.
When it comes to using their plans, it’s critical for employees to learn that shopping for health care services is not only possible but important, given the immediate impact on their wallets. Brokers should clearly point out that there is no fixed cost for any health service, show how dramatically costs can differ within the same network and ZIP code, use examples to show why this matters, and promote the online tools and other resources available to facilitate cost comparisons. Offering transparency services and enlisting health care advocates can help. Advocates can handle the leg work and provide cost comparison reports, so individuals can make the most cost-effective choice. With hospitals and health systems in poor compliance with recent transparency regulations, such services may be particularly beneficial in helping employees facing inpatient or outpatient procedures.
PART 3: Make it personal.
Providing information and resources is all well and good. But for these messages to stick and resonate with Gen Z, employers must make the “what’s in it for me” abundantly clear. Liberal use of examples, calculators and other tools will enable them to “do the math,” while benefits brokers and health care advocates can provide individualized, one-on-one support at enrollment and throughout the year. Finally, implementing and maintaining a dedicated benefits site ensures that employees have all the information they need when they are ready to consume it and available at their convenience.
Every employee cares (or should care) about financial wellness — but because Gen Z has already shown a focus on this issue, HR and benefits brokers should take note. By acknowledging Gen Z’s priorities, packaging benefits offerings based on those needs and investing in their benefits education, brokers can help employers stand out in today’s hot job market. Gen Z wants to be heard — and a personalized compensation package shows an employer’s support from Day One.
Kim Buckey is vice president of client services with DirectPath. She may be contacted at kim.buckey@innfeedback.com.
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Financial facts and figures powered by AdvisorNews.com
The Rich Get Richer – And Older
Here's to us!
Wealthy Americans did very well during the pandemic, as households with $5 million or more in investable assets grabbed 80% or more of the COVID-19 market run-up, a Hearts & Wallets study showed. Meanwhile, households with between $100,000 and $500,000 in investable assets declined in number.
Nearly 80% of wealth ($53.8 trillion) was held by about 10% of U.S.
households with $1 million and over (11.2 million), as of August 2020. While the $29 trillion increase in retail investable assets over the past seven years was spread across households with $500,000 and up, over 80% of the COVID market run-up of $12.7 trillion ($10.3 trillion) went to households with $5 million or more.
These assets are heavily concentrated among ages 55 to 74 because most households with $5 million or more are in this age group. These older, wealthier households control $40.2 trillion of the $68.3 trillion, or nearly two thirds (59%) of all U.S. retail investable assets. The 1% of U.S. households who are older (ages 55 to 74) and wealthy ($5 million or more) control 32% of all U.S. retail investable assets.
U.S. Households And Investable Assets <$5M vs. $5M+ by Age, 2020
Source: Federal Reserve Financial Accounts of the United States, Survey of Consumer Finances, U.S. Census Bureau, Hearts & Wallets Investor Quantitative™ Database, Hearts & Wallets analysis The Value Of Professional Advice Goes Up Fewer Americans trust themselves for financial advice, according to a Northwestern Mutual survey. The survey showed that Americans said their top source of finan-
cial advice in 2021 was a financial ad-
visor (26%) as opposed to the prior year, when the most trusted source of financial counsel (30%) was themselves.
The study found that the market volatility and economic downturn caused by the COVID-19 pandemic was a major factor influencing individuals to seek out professional financial advice. Nearly four in 10
(38%) Americans currently work with a
financial advisor, representing a significant jump from pre-pandemic levels (29%). Fifteen percent of survey respondents reported that they didn’t have a financial advisor pre-pandemic, and they now either currently work with an advisor or plan to start working with one. The trend was most pronounced among younger generations, with 23% of Generation Z and an equal 23% of millennials reporting that they have or plan to work with a financial advisor as a result of the pandemic’s impact on the markets and economy.
Hopeful But IllPrepared: Gen Z Looks At The Future
Members of Generation Z say they are financially ill-prepared to face adulthood, despite a growing economy and a booming job market.
A survey by OnePoll on behalf of Experian Boost found that 81% of Gen Z respondents
“wish they were taught more life skills be-
fore graduating college.” In addition, 70% said they’re feeling overwhelmed by their financial situation, including their ability to pay rent and monthly bills.
On the bright side, 38% of Gen Z said they understand the concepts behind investing, and the same percentage understands credit scores, while 42% said they understand how to budget. Meanwhile, 64% said they believe they will find financial security within the next six years.
30% of Gen Z moved back in with their parents to save money. 32% put off paying their student loans in order to better manage their other finances.
SOURCE: OnePoll on behalf of Experian Boost
Pandemic Prompts Early Retirement For Some
The proverbial gold watch came a little early for many Americans, thanks to COVID-19. An estimated 3 million
people nationwide left their jobs
earlier than expected since the pandemic began, according to the U.S. Bureau of Labor Statistics.
Some left voluntarily, while others were furloughed and haven’t returned to the workforce for myriad reasons. Some retrained for different careers and others simply realized there’s more to life than work.
Did You Know?
48% of Americans surveyed said paying bills is their top financial priority over the next year.
SOURCE: Northwestern Mutual
The pandemic-related job exodus reversed a trend that has been brewing for some time: that of baby boomers remaining in the workforce past the traditional retirement age of 65.
The Federal Reserve Bank of New York’s recent survey showed the
average expected likelihood of working beyond the age of 67 had declined from 35.3% of respon-
dents in July 2019 to 32.9% in March 2021. It is the lowest number since the survey, done every four months, was started in 2014.
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