Despite being inundated with debt, Gen Z workers say they take a “forward-looking approach” to money and savings. Their employers think otherwise.
New research from The Standard explores how plan sponsors understand Gen Z’s sentiment on finances. It then connects these findings to previously reported data on Gen Z and human resource (HR)-decisionmakers.
The study’s main finding shows a disconnect between employers and the youngest working demographic: while 79% of Gen Zers describe saving as their top goal, 55% of managers and 57% of HR leaders say the Gen Z age cohort think this way.
Instead of savings, 59% of HR leaders and half of managers believe paying off debt is Gen Z’s main target. However, only 37% of Gen Zers would categorize lowering their debt as a key goal. According to The Standard, when focusing on non-student debt, supervisors and HR leaders are closely aligned with the 20% of Gen Zers who say it’s a top goal. While only 19% of Gen Zers rank paying student loans as a key ambition, much larger percentages of managers (42%) and HR decision-makers (50%) think it’s Gen Z’s primary aim.
This divide can pose retention challenges for employers, notes The Standard in its research. Without understanding their key goals outside the workforce and the benefits they value, employees could be quick to leave for other opportunities.
One such benefit is financial literacy. Eighty percent of Gen Zers said they value working for an employer who provides support for financial literacy, while nearly three-quarters of HR professionals agree and 70% offer the support.
“Why wouldn’t companies provide Gen Z workers with tools to strengthen their financial literacy?” said Lauren Canfield, vice president, corporate actuary and chief risk officer at The Standard. “Reducing financial stress on young employees cuts down on distractions and positions them to bring their best to an organization.”
Furthermore, previous research Gen Z shows this age group is looking for employers to provide traditional benefits like retirement plans and life insurance, as well as financial coaching. While companies are offering these resources and tools, Gen Zers do not know where to locate them, showing a further disconnect with communication.
“Gen Z employees want transparency. They need help when it comes to their future, enrolling in benefits and knowing what their options are,” said one Millennial-aged manager at a healthcare company with over 2,500 employees.
The Standard recommends HR department design financial education programs that target employees in terms of age and other demographics, and work with financial wellness vendors who specialize in educating workers on saving, budgeting, investing, and debt management. When Gen Zers need help understanding retirement plans or the impact of life and disability insurance, employers can lean on benefit providers to work with employees.
The Standard’s research, “Boost Financial Literacy, Build Gen Z Tenure,” surveyed 1.250 Gen Z full-time workers or soon-to-be workers, and 500 HR decisionmakers. Additional survey data can be found here.