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What do young workers need for financial success?
The beginning of one’s career is a bit overwhelming. In today’s world, and especially in the field of healthcare, it’s not just the new, demanding full-time position that can be a shock. These young employees are likely also dealing with the reality of student loan debt payments and maybe even the experience of managing their personal finances in general for the first time-and healthcare workers will likely be adjusting to these realities for the first several years of their career.
Adjusting to the demands of the job will likely take priority, and time to focus on one’s personal financial situation may be hard to come by. However, the stress of finances is likely never far from young workers’ minds. In fact, according to MetLife’s 17th annual Employee Benefits Trend Study (EBTS), 52 percent of Gen Y healthcare workers reported that personal finances are their top source of stress.
Furthermore, many Gen Y healthcare workers are worried about the basics. According to the same MetLife study, 74 percent of Gen Y healthcare workers are concerned about having enough money to pay bills if someone in their household loses their job or is unable to work, compared to 65 percent of all employees surveyed. The same percentage (74 percent) are concerned about having enough money to cover out-of-pocket medical costs, and about being able to save for a big expense/purchase, compared to 66 percent and 61 percent of all employees, respectively. Seventy-two percent report they are concerned about being able to pay down debt, in contrast to 57 percent of all employees. And sadly, 56 percent of Gen Y healthcare workers already expect to postpone their retirement due to their financial situation.
Working toward increased financial wellness-the state of being in strong financial health so that an individual can successfully manage day-to-day finances, protect against unplanned expenses and financial shocks, and plan and save for future milestones-is beneficial for all employees in the workplace and out.
Participation in financial wellness programs can help reduce stress by giving employees the tools they need to manage their day-to-day cash flow, protect themselves against financial emergencies, and plan for their future. Not only can financial wellness solutions lead to healthier employees, but it also can have important business implications-leading to a more productive, engaged, and loyal workforce.
Steps employees can take to get started
For this up-and-coming generation of healthcare employees, the first step to improving their financial health is to investigate and understand what programs and resources may be available at their workplace. Regardless of whether such counselling and guidance is available, there are a few tips to guide beginning employees on the path to their own financial wellness:
According to the EBTS, nearly six in 10 (57 percent) young healthcare employees identify as living paycheck-to-paycheck. While 79 percent of these employees say they are willing to make short-term financial sacrifices in order to have a secure retirement, the reality is that only 52 percent are directly allocating part of their paycheck to a savings account. The first step to financial wellness is to get short-term finances in check in order to get on a track to save for the future.
However, the study found only 47 percent of young healthcare employees have a budget or plan for how to spend their money on an ongoing basis and actually stick to it. A budget or some type of financial plan will help to balance unexpected costs, which are two of the key elements needed to achieve financial wellness.
Immediate needs and future planning often compete for the same dollars, so it’s a necessity to put guidelines into place in order to manage these costs.
Steps employers can take to help
While it is ultimately up to the employees to take the initiative to address their finances, they may be unsure where to start. Employers and the workplace can play an important role in setting employees on the path to financial health-here are a few steps employers can take to support employees on their journey:
1.Educate employees of their options.
As employees’ life stage changes, so do their finances-because of this, it is important to help employees develop financial acumen based on where they are in their lives. Employers should also take the time to educate their employees about the benefits available to them-these benefits offer valuable protection that can be the foundation for their financial safety net.
2.Create a personalized approach.
Because today’s workforce is diverse, often with unique career paths, employers need to work with their employees to meet their individual needs and support their whole selves.
For example, entry-level employees, or those that are more recently out of college, may value student-debt reduction tips or programs available in the workplace. Older millennials who are starting families and buying homes while starting their careers may need education on how life insurance can provide financial protection and how some legal solutions could assist with real estate matters and wills.
3.Make it easy and enticing for employees to participate.
Give employees the flexibility to choose how and when they want to engage and act-whether it’s online at their own pace, in-person, or on the phone with trained professionals. Many young physicians, for instance, maintain difficult hours that necessitate handling personal matters beyond the world of 9-to-5.
Ideally, the solutions available in the workplace should allow for multi-channel participation and integrate existing employee benefits to deliver cohesive education and coaching across multiple channels.
An effective program also breaks down suggested actions into attainable, goal-based steps. Communications should also be optimized with clearly-defined action steps to support ongoing engagement.
4.Measure the impact and value for the employees
Help employees assess their financial aptitude. When employees have an accurate picture of their personal financial health, they are better equipped to take meaningful action.
Overall, the key to coaching new employees about financial wellness is ensuring them that it’s a process that takes time. Taking time to work through finances now at the beginning of their careers can have a significant impact on their futures.
As employees look for more help in this area, an increasing number of employers are offering resources, education, and support. Be sure to understand the programs available and advocate for strong financial wellness programs through the workplace.
Bradd Chignoli is senior vice president of National Accounts for MetLife.