With rising living costs, student loan debt and delayed homeownership, financial literacy is a critical life skill for Millennials and Gen Z as they navigate a constantly changing financial landscape. For businesses, promoting financial literacy among employees isn't just a nice-to-have - it’s a strategic move that boosts employee well-being, productivity and retention.
In this blog, we’ll explore the financial realities faced by Millennials and Gen Z, the importance of financial literacy in the workplace, and how businesses can tailor financial education to meet the needs of these generations.
The unique financial landscape for Millennials and Gen Z
Who are Millennials and Gen Z?
Millennials (born 1981-1996) and Gen Z (born 1997-2012) now make up a significant portion of the global workforce. Together, they account for around 50% of the workforce globally and their influence is growing as Gen Z enters full-time employment. These generations are shaping workplace priorities, demanding more and expecting better financial support from their employers.
Millennials and Gen Z have faced skyrocketing education costs, resulting in significant student loan debt. In the UK, for example, the average student leaves university with over £45,000 in debt which affects their ability to save, invest and plan for major life milestones.
Inflation and the rising cost of living have put additional pressure on younger generations. Essential expenses like rent, utilities and groceries have increased faster than wages, leaving less disposable income to save or invest. In a recent survey it was found that 30% of Millennials and Gen Zs don’t feel financially secure, while 60% of them live pay check to pay check, making financial literacy essential to help them manage limited resources effectively.
Home ownership has traditionally been a marker of financial stability but it remains out of reach for many. Rising property prices, stricter lending criteria and the need for larger deposits have delayed home ownership, with many forced to rent for longer. With longer life expectancies and changes to pension systems, Millennials and Gen Z face the daunting challenge of saving enough for retirement. The traditional “job for life” no longer exists, and many younger workers navigate multiple pensions, self-employment schemes and gig work. Without financial literacy, they risk making poor decisions or delaying saving altogether.
These realities highlight why financial literacy is so crucial for Millennials and Gen Z. By equipping employees with the knowledge and tools to manage their finances, businesses can support their financial well-being and boost overall employee satisfaction.
What is financial literacy and why is it so important within businesses?
Statistics from a government commissioned survey and published on Plain Numbers tells us that approximately half of UK adults have the numeracy skills expected of a primary school child.
Financial literacy is the ability to understand and apply key financial concepts such as budgeting, saving, investing and debt management. It allows individuals to make informed financial decisions and build long-term financial security. For employees, financial literacy extends beyond personal finance to include pension planning, payroll benefits and tax management.
Why is financial literacy important in businesses?
- Increased productivity - financial stress is one of the most common stressors for employees, often leading to mental illness and absenteeism. Employees who are financially secure are more focused, less anxious and better equipped to concentrate on their work, leading to higher productivity and better performance.
- Improved decision-making - employees with strong financial literacy skills are better equipped to make sound decisions about their careers, investments and financial future.
- Enhanced employee morale - employers who invest in financial education or provide tools to help employees understand their finances better demonstrate that they care about employee wellbeing. When employees feel supported, morale improves and they’re more likely to remain loyal to the company. Offering budgeting tools and debt management support shows the company is committed to their success.
- Attracting, attaining and retaining top talent - younger generations value employers who prioritise wellbeing, including financial support. By providing access to financial education and support, companies position themselves as progressive employers who care about their employees' overall well-being.
How to tailor financial literacy to Millennials and Gen Z
Traditional financial education methods may not work for Millennials and Gen Z. These tech-savvy, socially conscious generations expect interactive, engaging and relevant resources. Businesses can tailor financial literacy content to meet their needs:
1. Engaging content - Millennials and Gen Z consume content on social media, YouTube and digital platforms. Employers should use engaging formats such as short videos, infographics and interactive tools to communicate financial concepts. Mobile payroll apps with interactive online payslips and financial wellness tools can deliver bite-sized information that fits their mobile-first lifestyles.
2. Relevant topics - for Millennials and Gen Z, the key financial literacy topics differ from older generations. While traditional lessons on saving and budgeting still apply, younger generations are also interested in:
- Investing including sustainable and ethical investments
- Debt management student loans, credit cards, personal loans
- Crypto and digital currencies - an emerging area of interest for Gen Z
- Financial independence and early retirement
Tailoring financial education to these specific areas will increase engagement and relevance for younger employees.
3. Practical advice - providing clear, practical advice such as "5 steps to build a budget" or "How to pay off debt faster" is more useful than theoretical lessons. Employers can incorporate these tips into internal newsletters, webinars and workshops.
4. Mentorship and coaching - personalised mentorship and financial coaching add a human touch to financial education.
5. Advanced payroll software like PayCaptain offers access to personalised financial plans and tools like salary advances and payroll savings. Financial wellbeing support is also available to help employees create tailored plans for budgeting, debt repayment and savings goals. For those employees with lower numeracy skills, Plain Numbers payslips are available setting out their pay and reward information to a certified high standard of clarity in the way that numbers are communicated.
In summary, financial literacy for Millennials and Gen Z is more than a ‘nice-to-have’ - it’s a business imperative. As the burgeoning largest demographic in the workforce, their unique financial challenges demand tailored support from employers. From student loans and rising living costs to retirement planning, Millennials and Gen Z face significant hurdles in achieving financial security.
By promoting financial literacy, businesses can improve productivity, enhance morale, and reduce absenteeism. Financial wellness programs that include personalised support, mentorship and engaging content provide long-term benefits for both employees and employers.
Contact us to explore how we can support your Millennial and Gen Z workforce to improve financial wellbeing and strengthen your business offering.
.png)
