Today, millennials represent the largest generation in the workforce across the globe. With competition for talent at an all-time high, companies everywhere are working to understand the needs of a millennial worker, and what it takes to attract and retain them in their workforce. What previously attracted Baby Boomer and Gen X workers won’t necessarily cut it in today’s market.
For most, this requires a sizable revamp of their benefits package.
This guide will discuss how financial security is one of the workforce’s top concerns, and how offering generational wealth planning as an employee benefit could be a cutting-edge solution.
Millennial workers want future financial security
Before making changes to a benefits package, first take the steps to understand the psyche of today’s worker. What do millennials truly need, and what is it that they truly want? Various studies have shown that workers place a high value on their benefits package in relation to job satisfaction. Curating the perfect benefits package that caters to a worker’s needs and wants (within reason) is the key to attracting and retaining talent.
The Great Resignation during the COVID-19 pandemic showed that workers are willing to walk out on a job, even if it means their future will be uncertain. Millennials have left stable workplaces in hoards to pursue freelance work and other entrepreneurial activities with a strong desire for more flexibility and financial freedom. They don’t believe employers are doing enough, particularly in the area of financial wellness and security. A global pandemic that led to a recession and record rates of inflation surely shone a light on this area of weakness.
Here are some current statistics regarding employee benefits to consider:
For most employees, a comprehensive benefits package is a top job consideration
85 percent of workers feel that their benefits package failed to support them in meeting current and future financial obligations
84 percent of employers report that offering financial wellness tools has helped increased employee retention
82 percent of workers feel that employers need to play a larger role in assisting their financial wellness and security
72 percent of workers would take advantage of an estate plan benefit if offered by their employer
Millennials value having a range of benefits options to choose from. 89 percent would choose benefits over a pay raise.
Millennial workers in particular would choose more benefits over a pay raise. They also want more options to choose from. Aside from core benefits, they would enjoy picking and choosing from an à la carte menu featuring a variety of tools and services.
Employers who grasp this information will have the opportunity to stand out in their industry. This begs the question: what benefit options can employers offer that aren’t already being offered?
The data shows that employers should be providing support regarding financial health. Not only do they want to feel secure in their financial health today, they also want assistance in building financial security for the future.
Consider offering support in the area of generational wealth planning.
What is generational wealth planning?
Generational wealth is something that can be passed down from today’s generation to the next. For instance, a parent will accumulate assets and property during their lifetime that can be passed down to their child(ren). This is usually done through a Trust or a Will, as a part of that parent’s estate plan. When the child becomes an adult, they’ll have started off with some wealth to leverage. Used wisely, this wealth will provide them with the financial security to experience long-term success and continue growing wealth for their own children, and so on.
Millennials struggle to build generational wealth
Unfortunately, this is all easier said than done.
The Washington Post has called millennials “the unluckiest generation in U.S. history.” Not only have they undergone the Great Recession, they are bearing the weight of the current economic crisis that encompasses a student debt crisis. Millennials will “bear these economic scars for the rest of their lives, in the form of lower earnings, lower wealth and delayed milestones, such as homeownership.”
In other words, millennials will have the hardest time securing generational wealth and need help from their employers. This can be done by offering a variety of financial tools, benefits, and education in the form of employee benefits.
How to help employees build generational wealth
So what would a generational wealth planning benefit look like? This would be represented by a collection of tools and services that employees can pick and choose from. Here are some examples:
Financial Education: Growing wealth requires much more than just money. For long-term financial success that can benefit future generations, education is needed. Financial literacy is not taught in our education system, meaning that even the smartest employees often don’t have the basics when it comes to managing money or how to invest. Consider offering education courses as a part of your generational wealth program.
Financial Advising: Financial advising and planning services provided by employers can help fill an important gap. Employees who are already stressed about money (which would be the majority) may not have the funds to seek out advising services on their own. By making these services available as a benefit, employees would very likely take advantage of the opportunity to map out their finances with a professional. This might look like creating a strategy to cut down debt, increase savings, and come up with a household budget. Employees ready for the next step may consult an advisor to create their investment strategy and devise their generational wealth plan.
Personal Finance Tools: Encourage employees to get their personal finances on track by offering technology-based tools. Personal budgeting apps, software, and retirement trackers are great examples.
Investment Options: A recent IRS survey revealed that most Americans are behind on their retirement savings. An employer can encourage employees to begin saving for retirement by offering a 401(k) matching program. Consider auto-enrollment for individuals who meet the qualifications, with the option to opt-out. Make it easy for employees to build their portfolio by offering supplemental investment accounts.
Life Insurance Policies: Offering an affordable life insurance policy is a straightforward way for employers to extend a generational wealth-building opportunity to employees. Individuals who purchase a life insurance policy can have peace of mind knowing that they will take some financial strain off of their loved ones. If they were to pass away, the proceeds from the policy can help cover funeral costs if not more, such as paying forward a nest egg. Help workers set up their children for financial success by offering subsidized plans that would otherwise be cost-prohibitive.
Offer Equity: If your wages are already at or above market levels, consider offering equity compensation. Well-paid workers are more likely to view this as a “gift,” helping create more trust, engagement, and productivity at work. However, be careful not to hand out equity if your wages are below market level. Workers will certainly prefer to receive a salary increase, especially since it will provide steady income.
Rainy Day Savings: Programs such as employee equity and retirement savings are intended as long-term rewards, but individuals who are struggling financially may become tempted to cash out their equity or savings. Offer short-term solutions such as a payroll rainy day savings program or an employee financial assistance program to help prevent such actions.
Estate Planning: An Estate Plan is an essential part of your employee’s long-term success. A Will and/or Trust is what will give them peace of mind knowing that their hard-earned property will be passed down to their loved ones should anything happen.
Estate planning is the key to protecting generational wealth
A generational wealth program wouldn’t be complete without estate planning benefits. While building wealth is the primary activity, protecting that wealth is a secondary yet non-negotiable activity. By providing estate planning benefits, your employees will learn how having a Will and/or Trust is the only surefire way to legally protect their wealth in such a way that it will pass into the right hands should anything unexpected happen. Trust & Will offers accessible and affordable solutions that will help any individual implement an Estate Plan that is tailored to their personal needs, no matter where they may be in their wealth journey. Take our free quiz to see where you should get started, or compare our different estate planning and settlement options today!
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