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About 2,500 years ago, the Greek philosopher Heraclitus said that “the only constant is change.” That’s as true in 2024 as it was in 500 BCE, for both humans as a species and for individuals who migrate through various stages in one lifetime. Lifestyles change, circumstances change, and financial priorities change.
Crafting an employee benefits plan that meets all workers where they are today — no matter their age or generation — can be a big challenge for organizations that want to offer attractive and valuable perks to their workers. Some benefits might be more attractive to certain generations than others, and every age group will need education and training around how they can make the most of their benefits and set themselves up for health and success in the future.
From Gen Z to Baby Boomers, let’s explore the generational needs of workers and how employers can best meet those needs through their benefits package.
There are four different generations that are currently of working age: Gen Z (ages 12 through 27), Millennials (ages 28 through 43), Gen X (ages 44 through 59), and Baby Boomers (ages 60 through 78). While there is a great deal of variation within generations and crossover between generations, and while these ages are not scientific or set in stone, people in the same generation tend to have similar concerns in terms of their financial wellness.
For example, people in the Gen Z and Millennial generations might be more concerned about saving money for a down payment on a house, covering childcare for young children, or paying off their student loan debt. By contrast, Gen X and Baby Boomers are closer to retirement age, so they could be looking at the overall balance in those accounts and wondering if they’re going to have enough money to retire.
According to the PNC Organizational Financial Wellness in the Workplace Report, 76% of Gen Z workers are “very” or “somewhat” stressed about money, compared to 72% of Millennials and Gen X workers, and 59% of Baby Boomers.
Understanding the financial challenges that each generation is facing can help employers tailor benefits and education to those different groups, so that each worker is offered resources they actually want and are interested in using.
Baby Boomers are more concerned about saving for retirement than any other generation, and less concerned about short-term goals, such as saving for vacation or purchasing a car.
According to a PricewaterhouseCoopers Employee Financial Wellness Report from 2020, Baby Boomers were more likely to say that they would need money to deal with medical bills than other generations. Planning for long-term care and the rising cost of healthcare is a larger concern for this generation than for others.
Gen X workers are also concerned about saving for retirement, but they have other pressing interests as well. Building an emergency fund is one of the key priorities for this generation, as is paying off credit card debt.
If Gen X workers have kids, those children are likely to need money for college and establishing their own households. Debt management and establishing a foundation of financial security are key priorities for this generation.
Millennials are the most likely generation to say they are prioritizing paying off credit card debt or saving money to go on vacation. While they are thinking about retirement, it’s not a key concern yet. They are often paying back student loans, building up a savings account, and trying to invest for the future. Some Millennials might be aspiring homeowners who are trying to save up for a down payment on a house.
Millennials may want access to financial education and digital financial tools more than previous generations. They are accustomed to using technology to view account balances, transfer money from account to account, and pay their bills.
The youngest working-age generation, this group is most likely to be prioritizing improving their credit rating or purchasing a car, and least likely to be prioritizing saving for retirement or other long-term planning. They may also be paying off student loans, and they’re interested in learning about managing debt, budgeting, and exploring early investment options that make sense for their current lifestyle.
This is also a generation that’s hoping to buy a home one day, and according to the TIAA Institute, they are the most likely generation to have taken some kind of financial education class or program.
Some financial challenges transcend age and generational categories. Paying for an unexpected expense is a big priority across all generations, and every generation is also concerned about economic pressures (such as inflation) and how those uncontrollable variables could affect their future financial stability.
For every generation, the advent of fintech and the increased ability to see an accurate picture of financial wellness and act on it immediately has been largely a blessing. Instead of waiting for a requested credit report to come in the mail, for example, many credit card companies now offer the ability to monitor credit scores through the credit card app.
Across all generations, financial education and financial literacy are important, even for those generations that have been in the workforce for decades. Learning about new tools and features that can help with budgeting, saving, and expense-tracking might be more interesting to older generations, while younger generations might want more basic financial literacy information and coaching.
Offering valuable and useful financial benefits to multiple generations can be a challenge, but it’s not an insurmountable obstacle. A well-rounded financial benefits package should include not only a retirement savings plan and long-term financial coaching, but also resources for paying off student loans or saving up for big purchases, such as a car or a house. One benefit that is critical across generations and relevant to every employee is an emergency savings account. Learning how to save for an emergency has ripple effects to other areas of financial wellness, too; it can help employees better manage their credit card usage and debt, save for retirement more quickly, alleviate stress, and more.
To help every employee make the most of their benefits, consider creating different resources and guides for employees at different stages of their financial journey. For example, when discussing the advantages of saving for retirement, younger employees might want to know more about how investing today can provide a solid foundation for future retirement account growth, whereas employees closer to retirement might be more interested in specialized “catch-up” options that would be more relevant to their needs.
Offering personalized financial advice and resources can be enhanced through technology, which employers can leverage to both survey employees around their biggest financial concerns and priorities, then used to offer those advice and resources in a manner that best suits the employee. Some employees prefer to learn through video courses, others might like a series of emails, and still others might be partial to one-on-one virtual coaching.
To craft and deploy a financial wellness program that works across generations, employers should first ask their employees what they want and what would be the most beneficial for them. Anonymous surveys that allow workers to share their biggest financial concerns can give employers deeper insight into where there is overlap between generations, which financial challenges seem to be more generation-specific, and where generational concerns overlap.
Then, employers should take a look at their existing benefits package and determine how it can be refined to appeal across demographics, including age groups. For example, if the employer offers a retirement savings plan or a health savings account, then understanding how to discuss those benefits and how they can be personalized for individual employees can help increase usage and engagement.
When implementing new benefits, employers should start by tackling the financial challenges that transcend generational boundaries, such as workplace emergency savings accounts (ESAs). Every generation is concerned about the potential impact of an unexpected expense, and providing a solution through the workplace can get employees engaged on the general topic of financial wellness.
Finally, employers should offer a variety of methods for engaging their employees in their financial wellness benefits, whether through one-on-one financial counseling, online financial literacy courses, dashboards tied to different accounts, or other tools. Continuing to survey employees on an ongoing basis should also be part of any employer’s long-term financial wellness plan, as it can offer feedback around the success and impact of these tailored programs.
Every individual worker has different financial needs, and while thinking about employees at a generational level helps employers understand effective ways to address those needs, it’s also critical to remember that those needs will change over time. Lifestyle changes, promotions and income growth, shifting priorities, and aging into a different phase of life will all have an effect on every employee’s financial goals, both short-term and long-term.
The most effective financial wellness programs use generational differences as guideposts more than as strict rules to follow, allowing for variation within and across generations, and accommodating for unexpected (and expected) larger economic changes, such as rate hikes, inflation, and other largely uncontrollable variables. Tailoring a financial program that fits the full variety of employees, meeting them where they are today, can allow for that increased flexibility and preparation for inevitable change.