Millennials have become the largest population in the workforce, and their spending power is more prominent than ever. The youngest millennials were coming of age when the Great Recession hit, and they well remember the subsequent struggles of the job market. While they’ve managed to avoid many of the financial mistakes their parents made, many of them have come out of college with significant student loan debt and a complex hiring market. So, as an employer, how do you help millennial employees thrive?
Millennials aged 25 to 34 are said to owe an average of $42,000 in debt, and statistics indicate that three of every four are in debt. Money matters can be worrisome, and some millennials might avoid dealing with them or find superficial solutions that can be costly in the long run. Here are five ways you, as an employer, can help millennial employees avoid or escape financial mistakes they might be facing.
1. Provide Comprehensive Healthcare Options
Health insurance has become so complicated — and expensive — over past decades that many employers have shifted the responsibility of health insurance to their staff by offering poor plans or exceedingly expensive ones. This can be prohibitive for younger employees, especially.
Recently, Congress amended the Affordable Care Act to remove the tax penalty associated with failing to secure mandated health care. This may lead some cash-strapped millennials to opt out of health insurance completely. However, just one major illness or accident could set an employee back thousands of dollars.
Take a better approach by reducing health care costs that aren’t cost-share-specific, along with making wellness an important part of your organizational culture. With these four tips you can enact as an employer, health care costs should decrease over the long run for your employees while their general health levels improve.
1. Encourage preventative healthcare.
Look for insurance plans that include screenings, immunizations, wellness visits, and regular checkups as part of standard coverage. When employees stay healthy, it benefits both staff and the company in the long run.
2. Offer a variety of health insurance options.
While many companies are limited to fewer affordable options by their workforce size and budget, it’s worth looking into the benefits and drawbacks of HMOs, PPOs, fee-for-service plans, and others. You might have HR survey your employees to find out what they value most in health insurance.
3. Provide health information regularly.
Workplaces that keep their employees well informed about health issues and opportunities often see improved statistics across their workforce. Appoint a staff member (often it’s a benefits administrator or other HR personnel) who can spearhead an initiative offering educational classes, health fairs, and screenings, fitness incentives, and reward programs.
4. Offer access to fitness facilities.
If your office has gym facilities, make sure your employees have access. If not, identify local gyms or studios that would be willing to make a deal offering your employees access to equipment and fitness classes, or even discounted memberships.
2. Offer Educational Support
While credit cards make up the majority of millennial debt, student loan debt is the number two issue plaguing this generation. Since millennials are so ambitious and the hiring market so competitive, they’re more likely to seek higher education to qualify for higher-paying jobs. But adding further student loan debt to their financial portfolio is one problem that not all millennials can solve. Instead, offer them support and different educational options:
1. Provide tuition reimbursement.
By assisting employees with tuition for college courses, you’ll not only change someone’s life, but also simultaneously expand the institutional knowledge base and value of your staff. It’s a great perk to mention when recruiting, as well.
2. Offer mentorship programs.
Accommodate the millennial desire for feedback by setting up mentoring options within your company that can let them learn the ropes from established leaders.
3. Sponsor certification and education programs.
Providing opportunities for professional development can not only keep your employees knowledgeable and engaged, but also it’s been shown to increase employee satisfaction and retention.
3. Educate Employees on Saving for the Long-Term
Many millennial American taxpayers calculate tax refunds for themselves, but many of them might spend it or stash it in an ordinary savings account. Not all millennials realize they can invest their money in a variety of ways that will earn them interest over time. One way you can help is by offering ways for your employees to invest in their futures instead. Consider the following factors:
1. Provide a range of retirement plan options.
Not everyone has the same needs or resources, so options that range from a SEP, SIMPLE, or Roth IRA to a standard 401(k) can help employees choose wisely for their needs.
2. Expand your matching factor.
If you offer a matching amount for your employees’ 401(k) or other retirement fund contributions, see if you can raise the percentage even a little bit. Just a small bump can mean a significant increase for an employee’s investing.
3. Offer education on retirement/ investment planning.
Financial planning is a complicated and unfamiliar world to most; bringing in experts to help employees become better informed on taking charge of their financial futures can benefit them for decades to come.
4. Engage with financial planning services.
Guidance from professional financial planners can help your staff successfully navigate the process of planning for their financial futures, setting up both themselves and the company for greater success.
Many millennials prudently use savings accounts — but many don’t know they should choose other money management options that put their money to work earning interest. Help your employees learn to stop living in the moment by gently guiding them toward thinking long-term.
4. Condition Employees to Read the Fine Print
Today, everyone can conduct most transactions online. It’s one thing to finish a transaction by clicking through an endless clickwrap agreement — such as a social media website’s terms and conditions — without reading every single line. We’ve all done it from time to time. However, signing credit card agreements or other binding financial contracts without understanding the terms is something else entirely: It’s dangerous. Here’s where employers can help.
Condition your employees to always read the fine print and alert them about what specifically to look for. Not only will this help millennials learn the life skill of contract negotiation and interpretation, but it also will protect your organization from vulnerabilities that could be easily avoided.
5. Offer Remote Work Options
Sinking too much of one’s paycheck into rent can ultimately stunt financial health. Financial experts generally recommend that people don’t spend more than 25% of their monthly paycheck on rent. However, one study found millennials are spending approximately 45% of their salaries on rent — a whopping $93,000 by the time they reach age 30.
Making high rent payments over the long-term can prevent younger adults from building emergency funds or saving for home ownership. One way you can help your employees is to offer remote work options that allow greater flexibility. There is a huge difference between renting in Omaha and renting New York City. Being able to live and work remotely from cheaper areas enables employees to save money toward home ownership and other goals that can help secure their financial future.
Additional Ways Employers Can Help
Many millennials can find themselves missing out on good career opportunities, as well. Employers who understand these pain points can help by offering ways for younger employees to engage. Since many millennials are afraid to “take the plunge” entrepreneurially, you and your senior staff can act as mentors in showing them how to identify, prepare for, and take calculated risks to better the business.
1. Teach solid business practices.
Help them learn networking techniques, the tenets of generating profits (smart money practice learning opportunities here!), and generally building a good repertoire of skills in all things business-related.
2. Provide travel opportunities.
Invite millennial employees to prepare for and attend trade shows, conferences, and other networking and promotional events. This will have the effect of broadening their horizons and professional networks while giving business associates fresh faces and perspectives to associate with your company.
3. Regularly offer and accept feedback.
Encourage employees to share opinions and ideas freely — and listen when they talk — then offer them meaningful feedback. Your mentorship can help guide them toward developing their own strong leadership qualities.
Implementing these techniques can offer your millennial employees greater exposure and insight, along with a sizable morale boost and more expansive mind set. With your help, they can bolster their own career opportunities over time and simultaneously help your organization grow, too.
As an employer, you also can equip your employees with the tools to avoid financial and career mistakes. By offering thoughtful benefits, developmental support, rewards and recognition programs along with other carefully chosen perks, you can build a place where your employees love to work. And since bolstering employees’ knowledge and savvy generally leads to increasing a firm’s productivity, it’s a win-win for all.
Laura Gayle is the author of Business Woman Guide, a blog dedicated to providing trusted resources for women trying to start or grow businesses on their own terms.