08 Apr 2019

4 key areas employers must consider to engage different generations in financial wellbeing

Financial wellbeing is important at all ages but it means something different at each stage of life. Different generations have varying perspectives, money values, lifestyle priorities and earning capability.

However, the financial wellbeing of all generations is impacted by the same things:

relationships;
parenting;
understanding;
economics.

The different generations that you may find make up your workforce include¹:

Gen Z, iGen, or Centennials: Born 1996 – TBD
Millennials or Gen Y: Born 1977 – 1995
Generation X: Born 1965 – 1976
Baby Boomers – Born 1946-1964

Here are four areas employers should consider to help engage with these employees of all ages in financial wellbeing:

Understand the differences
There are a number of economic factors affecting the financial environments of the different generations. The demise of defined benefit pensions, lower wage growth, living longer and lower investment returns have combined to create financial wellbeing challenges.

For example, rising housing costs mean that many young people are not able to buy a home and if they are, this happens at older ages with the average age of first time buyers now about 31 compared to 23 in 1960. And women are starting a family at later ages than in the past, with the average age of first-time mothers now at 28.6 compared to 24.2 in 1975.

More people are working well beyond state pension age with numbers doubling in the past 25 years. Second and even third marriages are also increasingly common, which brings both personal financial wellbeing and intergenerational dynamics implications.

Salary Finance research also found that levels of financial stress also change from different age groups. For example, 48 per cent of people aged 25-34 have money worries, compared to 41 per cent of those aged 35-44 and 30 per cent of 45-54 year olds.
Recognise the similarities
As much as the experiences of the generations have some clear differences it is important to also recognise the similarities. People are still moving through the same life stages, just perhaps at a different pace.

It is also true that any generational generalisations are just that: a generalisation.

None of the generational characteristics are universal and each generation contains a hugely diverse range of ages and life stages. For example, Gen Y can include someone in their early 40s who is married (maybe for the second time) with a family; and someone in their mid 20s for whom those things could feel a very long way away.
Tying financial wellbeing to life events
Certain life events, such as marriage, starting a family and a house purchase, are consistent across all generations - they are the major life stages that most of us go through. All of them offer opportunities to engage employees and motivate them to improve their financial wellbeing in a way that is relevant for them at the time. It doesn’t matter if someone is becoming a parent or homeowner in their 20s, 30s or 40s, their experiences will have more similarities than differences.

Other useful triggers for financial wellbeing engagement include key financial deadlines for tax, state benefits and new money-related rules. Anchoring your communications around these triggers can help connect your financial wellbeing offering to external media, increasing relevance and helping with internal engagement.
Break down the barriers
When talking about money, it's important to keep reminding ourselves of the similarities people share instead of focusing on the differences. Improving financial literacy and inclusion is an opportunity to unite your people around shared goals and life events which may help you to boost cross-departmental collaboration as well as initiate more conversation through opening the dialogue for people to share their own experiences.

By anchoring your communications around key life events that span age and culture, you can empower them with the knowledge that can make their financial goals a reality.

This article is provided by Salary Finance.

Reference

1. Traditionalists or Silent Generation: Born 1945 and before. The Centre for Generational Kinetics