What’s really driving the “Great Resignation?” Why is it happening, and are some people choosing to leave the workforce entirely versus reshuffling and looking for something new?
Employees have faced unprecedented pandemic-led challenges that blurred the lines between personal and professional lives, testing mental health and often leading to burnout. It’s causing people to re-evaluate what they want professionally, including how and where they work, who they work for, and why.
“Younger workers—Gen Z and Millennials—are driving the job-changing trend,” Fidelity Investment’s Kirsten Hunter Peterson explained in a breakfast presentation at the 2022 401(k) Summit in Tampa, Fla. “We have a lot of participant data and surveys that show it’s not just higher compensation, although that is part of the story. Things like better employee benefits and things that help them improve their well-being are a huge focus coming out of the pandemic. They also want work that provides them with more flexibility in their lives and might serve a higher purpose aligned with their values.”
Peterson, the Boston-based firm’s Director of Workplace Investing, also discussed how plan sponsors could be more strategic with their benefits offerings. It’s especially timely during a difficult hiring market. Advisors can help by implementing practical and expansive financial wellness programs that address the areas employees currently struggle with.
“Maybe it’s an HSA to help reduce current and future health care costs,” Peterson said. “Maybe it’s a student debt repayment benefit because we know so many employees across generations are struggling with this mountain of student debt. Maybe it’s something like a workplace savings account since many employees don’t have the recommended short-term savings at hand and liquid when they need it. So, it’s reconsidering or reimagining how financial wellness programs can be modified to be more effective for a specific plan sponsors employee population.”
401(k) plan design modifications can also help, everything from auto solutions to vesting schedules and ESG investing options for those looking to attract and retain younger workers.
“Many don’t even realize they’re investors, even if they’re simply saving in a retirement plan, which makes them one,” she added. “So, it’s getting away from how we traditionally talked about retirement, making it much more inclusive and potentially tapping plan design modifications to facilitate that.”
Advisor opportunity
Advisors should care about it for several reasons. She cited Fidelity’s 2021 Plan Sponsor Attitude Survey, which found that 34% of plan sponsors are “actively looking for a new advisor.”
“That number is even higher among younger plan sponsors, and that 34% figure it’s close to double the two previous years,” Peterson concluded. “For the first time in the 12-year history of this research, employers say that the most value their advisor brings is in support of better employee outcomes. Advisors who really dive into helping the employees’ entire financial wellness and well-being are those that will experience success in the future.”
With more than 20 years serving financial markets, John Sullivan is the former editor-in-chief of Investment Advisor magazine and retirement editor of ThinkAdvisor.com. Sullivan is also the former editor of Boomer Market Advisor and Bank Advisor magazines, and has a background in the insurance and investment industries in addition to his journalism roots.
