News Spotlight

Jobs are scarce for the class of 2024. This year’s graduating seniors face a job market without enough entry-level jobs to go around. How to stand out? Develop skills that AI can’t easily duplicate (The New York Times).

Workers use mental health benefits if peers do. When employees have a sense for how much their colleagues are struggling with mental health and burnout, they’re more likely to utilize company-provided benefits (Harvard Business Review).

Employees take “hush workcations.” More than half of Americans say they have worked remotely on vacation, signaling a new trend made possible by remote work and a culture of always being online (New York Post).

Stat of the Week

As generative AI becomes more ubiquitous in the workplace, a new report finds that 1 in 2 high school students believe the workforce is about to undergo a major transformation. Nearly half (48%) agree that hard skills will become less important than soft skills while nearly one-third (28%) say they will need new skills in order to thrive at work.

These students represent the future of work — which they expect to be dominated by the use of AI — and many are already aware that the skills they build today will shape the workplace of tomorrow.

Deep Dive Article

Gen Z Workers Are Dealing With Financial Stress — Here’s How Employers Can Help

As more and more Gen Z employees enter the workforce, HR teams are working to attract this burgeoning talent group and set their new team members up for success. Projected to make up 30% of the U.S. labor force by 2030, Gen Z-ers are bringing new skills to their employers, but also bring new expectations as they face the unique challenges of today’s economy.

According to a new study — released in partnership between my company, Workforce Intelligence, and BrightPlan, a leader in Total Financial Wellness — Gen Z employees currently in the workforce are struggling more than their peers when it comes to financial wellness. In fact, a staggering 86% say they are stressed about their finances, while nearly half (48%) report feeling overwhelmed (compared to just 21% of Baby Boomers and 30% of Gen X).

Overall, respondents shared that their stress is centered in today’s economic uncertainty. Top concerns include high inflation (95%), rising interest rates (90%), a potential recession (88%), and market volatility (87%). But for Gen Z, which is just finding its footing in the workplace, these factors have an outsized impact on both their wallets and their mental health.

Concerningly, employees — and younger workers in particular — don’t seem to have the tools they need. Only 18% of workers overall are financially literate, while even fewer Millennial and Gen Z employees have achieved financial literacy (11% each). Younger workers are also most likely to have unmanageable debt, including 49% of Gen Z-ers and 50% of Millennials, putting them in an especially precarious position.

These challenges weigh on workers’ overall mental health, but can also negatively affect their productivity in the workplace. 3 in 5 Gen Z (59%) and Millennial (62%) employees say that financial stress impacts their productivity at work. Overall, workers are losing on average 7.3 hours of productivity each week due to their financial stress, costing U.S. employers an estimated $183 billion annually.* Gen Z and Millennial workers report even more lost time — 8.1 and 8.4 hours respectively — suggesting that younger generations are losing entire workdays in productive hours, due to their financial stress.

Workplace leaders are feeling these losses. When asked how financial stress has impacted their business, C-suite and HR leaders say that it contributed to higher turnover last year (78%) and hurt their company’s bottom line (78%). Still, leaders seem to be largely in the dark on the real impact of financial stress on their employees. While leaders estimate that 30% of their workforce has an “excellent” financial situation, just 12% of employees would describe their finances in those terms. And when assessing the support their organizations offer to their employees, 92% of leaders believe their companies offer the financial support employees need — compared to 76% of workers who say they are not satisfied with their financial benefits.

The good news? 8 in 10 leaders shared that they already offer or plan to offer financial benefits, and we’ve found that the number of organizations currently offering these benefits has increased year-over-year, indicating positive momentum. Another 76% say their company is making at least one change this year due to market dynamics, but are avoiding cost-cutting actions that would negatively impact employee well-being. For example, just 14% say their company is removing benefits in 2024, down from 27% last year.

This is an encouraging shift. But as companies increase investments in financial wellness benefits, it’s imperative that leaders consider the unique concerns and needs of their fastest-growing workforce demographic — Gen Z workers.

How can HR leaders support the financial well-being of their entire workforce, while paying special attention to their Gen Z employees who require additional support? In today’s article, I’ll outline 4 key imperatives for leaders looking to boost financial wellness benefits for their youngest workers, backed by the findings from my company’s latest research with BrightPlan.

1. Conduct an employee financial wellness assessment.

The first step toward safeguarding the financial wellness of your workers is to conduct an assessment of their current financial health. Learn about the unique challenges that your workforce currently faces — from debt management to emergency savings to retirement planning — in order to better provide financial wellness benefits that can actually serve their needs.

To that end, ensure that any financial wellness assessments consider the challenges faced especially by Gen Z employees, such as paying down student loans, building financial literacy, and establishing emergency savings.

2. Offer financial wellness benefits that leverage accessible, digital tools.

As they join the workforce, Gen Z employees are bringing with them deep knowledge of digital tools that can foster productivity, efficiency, innovation, and creativity in the workplace. Experts of the digital, Gen Z-ers value the accessibility, flexibility, and customization of web-based tools and are most likely to utilize benefits offered in digital formats.
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Explore benefits that optimize digital tools, platforms, and services, like online courses, web-based budgeting, and integrations with savings and investment accounts.

3. Ensure that young employees can begin retirement planning.

Because they are still new to the workforce and many are just beginning to establish long-term savings, it remains to be seen how Gen Z overall will approach retirement. But early reports suggest that Gen Z-ers are prioritizing “soft savings” over compound interest, living in the moment through personal growth and travel while focusing less on the long term.
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Current economic uncertainties — along with the advantage of time — are contributing to this trend. Work with your younger employees to underscore the importance of saving for retirement, and make sure they’re able to do so in a way that is supported by their current salaries.

4. Provide innovative financial benefits.

Raised in a rapidly evolving world, Gen Z has developed an especially innovative mindset. They seek solutions that promise a better tomorrow and rethink systems that no longer serve society.
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With this in mind, it’s important to stay at the forefront of financial wellness offerings, providing benefits in line with younger workers’ values — for example, socially responsible 401(k)s, student loan forgiveness programs, and employee savings accounts (ESAs).

At the end of the day, it’s about doing right by your employees.

As the workplace landscape continues to evolve, prioritizing financial wellness is not just a responsibility, but a strategic investment in the overall well-being and productivity of the workforce. By taking proactive steps to understand and address the unique financial challenges faced by different generations, particularly Gen Z, companies can cultivate a more engaged, resilient, and loyal employee base. This approach not only bolsters retention efforts but also positions organizations as attractive destinations for top emerging talent seeking comprehensive support systems.

Ultimately, the path to financial wellness requires a collaborative effort between employers and employees. Companies must take the lead in creating accessible, innovative programs that empower individuals to build financial literacy, establish healthy money habits, and plan for a secure future. By fostering an environment that destigmatizes financial discussions and provides tangible resources, employers can play a pivotal role in alleviating financial stress, promoting work-life balance, and enabling their workforce to thrive personally and professionally. In an era of heightened economic uncertainty, investing in financial wellness is an investment in the long-term success of both the organization and its most valuable asset – its people.

*Assumes there are 100,555,000 knowledge workers in the U.S. with an hourly wage of $40.20. (Federal Reserve Economic Dataset) 23% of knowledge workers have high or very high levels of financial stress and 54% of them have 7.3 hours of lost productivity per employee per week as a result of financial stress. For more information see the full report.

Thanks for reading — be sure to join the conversation on LinkedIn, and download the study report to see the complete findings from my company’s latest research with BrightPlan. For a live walkthrough of the findings, join me and other industry experts in this May 28 webinar.