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It’s a tough time to be a Millennial. In the face of economic instability, crushing student debt, stagnant wages and looming uncertainty about retirement, today’s Millennials are suffering from the weight of financial fears, which in turn is affecting their on-the-job performance and personal well-being.
So was the conclusion of PwC’s recently released 2016 Employee Financial Wellness Survey, which revealed the attitudes of employees from different generations. We measured the degree to which employees of all generations perceive their financial well-being and their self-assessment of the stress levels they feel regarding their own financial health.
Not surprisingly, employees from the Millennial generation (defined by PwC as those born between 1982 and 2000, and accounting for approximately 25 percent of the US population) were the group most troubled by financial stress.
Intuitively this makes sense: Millennials are in the early stages of their careers and trying to navigate conflicting priorities such as professional success, family life and personal fulfillment. It’s the time when many start acting like independent adults, with grown-up responsibilities and pressures: buying a home, having kids and saving for the future.
Among the most illuminating findings from the survey:
Financial Stress on the Rise: No doubt about it: Millennials feel more stress than before. While our survey found financial stress rising among all employees for the first time in the past five years (with 52 percent saying they are “stressed out” about finances and 45 percent saying that their stress has increased over the past 12 months), fully 64 percent of Millennials indicated they were stressed. The pressure is from several sources: volatility in the stock market, salaries that have struggled to keep pace with the cost of living; and an upcoming presidential election that has heightened attention to income disparity.
Student Loans Pose Severe Burden: Everyone appreciates the value of education, but the cost of expanding your mind can be exorbitant - and sometimes debilitating. We found that employees impacted by student loans are in worse financial shape than other employees. This stress is most acutely felt by Millennials, since 42 percent of Millennial survey respondents indicated that they have a student loan, and 79 percent of Millennials with student loans say that their student loans are having a moderate or significant impact on their ability to meet their other financial goals.
These repercussions extend still further: workers whose finances are impacted by student loan debt are less productive, are more likely to find it difficult to meet household expenses, and are less confident in their retirement preparedness.
Other Priorities Takes Precedence Over Retirement: According to the survey, nearly three-quarters of all employees are currently saving for retirement, yet it’s unlikely they’ll be prepared. Nearly half have saved less than $50,000 for retirement and 28 percent are saving less for retirement than last year. Those saving less than last year most frequently tell us that other expenses are the reason for saving less.
Making Risky Financial Decisions: We also found that Millennials are making riskier financial decisions than other generations. A full 50 percent think they’ll likely need to use money held in their retirement plans for expenses other than retirement. And 30 percent are using credit cards to pay for monthly necessities which, given today’s interest charges, will only add to the debt burden.
If there’s a bright spot in all of this, it’s that, fortunately, more employers are taking notice and looking for ways to assist. With financial wellness programs on the rise, employers are providing assistance beyond just the traditional retirement planning and investing.
Recognizing the barrier to saving is often tied to current cash flow challenges and debt, employers are focusing more attention to these issues, with some going so far as to offer benefits to help pay down an employee’s student loans.
Given 54 percent of Millennials say that their loyalty to their employer is influenced by how much their employer cares, instituting a program that focuses holistically on the financial well-being of employees presents a great opportunity for employers. Doing so will engender loyalty and may even boost retention rates among Millennial generation employees -a virtuous cycle and a win-win for both employer and employee.