Research released from The Standard earlier this year explored what employees in Generation Z want and need from workplace benefits. The goal was to help employers tailor their offerings.
The results showed that these employees value the traditional benefits that many employers already offer, such as retirement plans. At this exciting stage in their lives, they’re looking to achieve financial well-being and are focused on saving.
However, the research also showed:
- Less than one-third—29%—of this generation say they are in good or excellent financial condition.1
- More than one-fourth—27%—report being in poor or terrible financial shape.1
Knowing that people in this generation are at the beginning of their work lives, these data points aren’t surprising. Gen Zer Nicholas Sumners summed up this generation’s financial struggles in a viral TikTok post:
“Can somebody explain to me in crayon-eating terms why I make over three times the federal minimum wage and I cannot afford to live?”
In Real Life
Research on Generation Z—those born between 1996 and 2012—is personal to me. With two grandsons who are seniors in high school, I’ve observed firsthand how this generation processes financial decisions.
Compared with my generation or even their father’s generation, the Gen Z members of my family are more aware of how their choices affect their future financial well-being. Financial stability is now a topic that comes up in conversations with their friends. One grandson recently learned of a new required course in financial education for incoming high school students and said he wished it had been available four years ago.
Their concern over finances factors into everything. Do they take the bus or spend gas money to get to school? When and where do they make a purchase? Which store? On sale or full price? They’re also concerned about future school loan debt, so they agonize over their college choice.
Practical and Planful
Research from The Standard—based on interviews of more than 1,250 Gen Z full-time or soon-to-be workers—shows they don’t view themselves as financially strong. But their responses, confirmed by my family’s experience, demonstrate that they are practical and planful. Despite their age, a large majority—79%—say their top financial goal is saving. Nearly half say they’re most worried about not saving for retirement.2
Our research also reveals that while individuals used to turn to banks and credit unions for saving solutions, Gen Zers have a higher comfort level with their employers than previous generations. They’re looking to their employers for help to prepare for the unexpected. They highly value automatic enrollment and automatic increases in employer-sponsored retirement plans, for example.
How Employers Can Help
Our research also included a survey of 500 HR decision-makers to see if employers’ views align with those of their Gen Z employees. We found some notable differences:3
Gen Z’s Top 5 Benefits in Priority Order
1. Health/medical insurance
2. Paid family and medical leave
3. Retirement savings plans
4. Life insurance
5. Emergency savings accounts/mental health days (tied)
HR Leaders’ Perception of Gen Z’s Top 5 Benefits in Priority Order
1. Health/medical insurance
2. Flex time
3. Flexible work location/student loan repayment (tied)
4. Mental health days
5. Mental health services
Gen Z’s priorities show a back-to-the-basics attitude toward employee benefits. Of particular interest is emergency savings accounts. Gen Zers are concerned about repaying college debt and the high cost of home ownership. Add inflation and rising health care expenses to the equation and it’s no surprise that members of this generation struggle to save for emergencies.
Here are two actions employers can take:
• Help improve their financial lives: Gen Z expects traditional benefits like health care, retirement plans and life insurance. Employers can step forward with solutions for those unexpected needs with emergency savings first, followed by student loan repayment and home-buying help.
• Help improve their financial literacy: Gen Zers see the value of financial education, counseling and coaching to help them manage their money. They’re looking for employers to provide these benefits.
Gen Zers aren’t looking for employers to do everything, but to partner on solutions that will help them be ready for unplanned expenses.
How Advisors Can Help
Why should advisors be tuned in to the needs of Generation Z? Well, Gen Zers are poised to outnumber Baby Boomers in the full-time workforce in 2024.4 These potential future clients want to save and are hungry for solutions, like financial wellness programs, that you can bring to the table.
Gen Z workers have a good foundation with employer benefit programs, but they want more traditional support. When assessing ways to help Gen Zers navigate financial headwinds and build strong economic foundations, consider these points from our research:2
- Gen Zers expect support on near-term preparedness, with two out of three saying employer-provided health insurance is extremely valuable.
- Members of this group think a lot about long-term planning. The majority list their top financial goal as saving, and nearly half say they’re most worried about not saving for retirement.
- Gen Z understands the importance of financial preparedness. Unforeseen costs or emergencies are the No. 1 reason they’re saving.
Gen Zers need help reaching financial stability, and employers and advisors can be good influences for their futures. It’s time to break out the crayon box and help get Gen Z on track to meet their financial goals.
SEE ALSO:
• Gen Z Names Savings, Not Debt Management, as Top Financial Goal
1 Protector, Provider and Mentor, Gen Z’s new expectations for employers, The Standard, January 2024
2 Evolution, Not Revolution, Gen Z’s traditional goals point to success through refining — not remaking — employee benefits, The Standard, January 2024
3 Learning to Speak Gen Z, Help Gen Z employees see that your benefits align with their goals, The Standard, March 2024
4 Glassdoor’s 2024 Workplace Trends, November 2023
The Standard is the marketing name for StanCorp Financial Group, Inc., and its subsidiaries. Standard Retirement Services, Inc., provides financial recordkeeping and plan administrative services Standard Retirement Services, Inc., is a subsidiary of StanCorp Financial Group, Inc., and all are Oregon corporations.
Angela Trefethen is the senior director of Retirement Plans Services at The Standard. She has 34 years of retirement services industry experience leading the disciplines of relationship management, new business onboarding, account management, plan consulting, participant contact center and customer experience. She is a licensed FINRA series 6 and 26 securities representative.
