Memo to HR: Millennials Care About 401Ks Too
JULY 14, 2021
Employers use perks like gym memberships and laundry services to lure and retain top Millennial talent, but they may want to focus more on traditional retirement benefits. Although experts claim Millennials have flippant attitudes toward money, a recent report from Bank of America Merrill Lynch found young professionals care more about their financial health than office freebies.
At Society of Grownups, a Boston startup that bills itself as "a sort of masters program for adulthood," financial planner Karen Carr meets with young professionals who want to balance competing financial priorities like saving for retirement, buying a house and paying off student loans. The organization offers classes and events like dinners and guest lectures where young adults come to learn about managing their competing "grownup" priorities. Carr told us why companies need to do a better job of helping young employees make informed choices about their financial futures.
How are the life and financial goals of young professionals different from those of other generations?
Most of [our] "grownups" are just trying to manage their competing priorities as best as they can, without losing sight of a really big goal. I’m not sure the juggling act itself is so different from previous generations, but the balls in the air have changed. I don’t think my grandmother was worrying about making her student loan payments or how much she should contribute to her 401K when she was my age, but I do think that balancing act was always there.
Why is it particularly challenging for young professionals to get a grasp on their financial health?
It’s easy to assume everyone else has it all figured out. Money isn’t something we necessarily talk about openly. If you can’t really talk to your friends, or your parents weren’t the best at managing money, or you don’t have a mentor or someone you feel comfortable enough to go talk to, then you are relegated to Googling away. That can be incredibly overwhelming, and you don’t know if you’re getting the best information or where to take it from there. [So] companies stepping up and helping employees sort through all of this information is a huge asset for both parties.
Why does addressing employees' finances make sense for a business?
Caring about the financial literacy of employees is a win-win for companies. Not only are they doing the right thing by their team, but people who have a handle on their finances and feel empowered to make financial decisions make for better employees overall. Without money anxiety, they’re more productive and, overall, happier at their jobs.
So how can employers help their employees better understand savings and retirement options?
Employers are always looking to offer benefits to retain great employees. Free lunch is great, but when you really stop and think about it, what’s more important to a lot of people? I see so many young people that care about their retirement.
Young professionals, especially, really benefit from opportunities like speaking to a financial advisor or attending a money workshop. A company should help employees get set up, understand their [savings and retirement] benefits and feel really comfortable with their financial situation. If [employees] don’t understand their benefits and why they’re important, that doesn’t make anyone want to stay.
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