Millennials are pessimistic about their financial futures and are looking to their employers for help when it comes to addressing financial matters, according to a new MetLife survey released in advance of the upcoming open enrollment season for employer-provided benefits.
Open enrollment presents a prime opportunity for employers to build loyalty among millennial workers and increase retention, the insurance company’s study concluded. That’s key, since millennials will soon make up almost half the workforce.
Just under half of millennials (44 percent) told MetLife they want their employer to help them solve their financial concerns, a response more than double that of boomers (20 percent). Similarly, three-fourths (75 percent) of millennials say their employers have a responsibility for the financial well-being of their employees.
“Today, millennials represent the largest share of the American workforce, and by the year 2020 nearly half of workers will be millennials,” said Todd Katz, a MetLife vice president. “Our study shows that millennials, and all employees, are looking to the workplace for guidance and support to achieve financial security. … With only 44 percent of employees feeling in control of their finances, employers today have a unique opportunity to drive loyalty and retention by empowering employees to make informed benefits decisions.”
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The MetLife study revealed a real need for education, especially among younger workers, on traditional and voluntary benefits and how they can be used to address financial concerns.
Only 52 percent of millennials had an understanding of life insurance, compared to 69 percent of baby boomers. Similarly, only 38 percent of millennials had an understanding of long-term disability insurance, compared to 57 percent of boomers.
Employees are also unclear about the practical and financial value of voluntary benefits, with only 47 percent of employees agreeing that nonmedical benefits can help them limit their out-of-pocket medical expenses. For employees without a savings cushion of three months — that’s about 65 percent of millennials — those expenses could lead to a financial drain.
According to the MetLife study, open enrollment is an opportunity for employers “to evolve into a more consultative role and provide meaningful education and training for employees, while also engendering loyalty.”
To alleviate confusion about benefits, employers should focus on helping employees make informed decisions about which benefits best suit their specific needs.
“If employees fully understand their benefits options, they’ll make better purchasing decisions and in turn, decrease their financial stress,” said Katz.
MetLife advocates giving employees robust decision-support resources and personalized offerings to help them make educated benefits decisions for their individual situations. This is especially important for millennials: Compared to their older counterparts, younger employees feel the least confident in their benefits decisions.
The MetLife study found that strong communication drives employee confidence during benefits selection, with the most effective resources being one-on-one consultation. Despite popular perception that younger adults prefer technology over one-on-one interaction, the study found that 68 percent of millennials value one-on-one consultations with a benefits expert who is not a salesperson, compared to 62 percent of Gen X and 57 percent of boomers.