What can employers do to help them?
Employers may have to step up to help their young workers with their financial situation, according to a recent report.
Currently, 51 per cent of Gen Z and Millennials are living paycheck to paycheck, reports Leger.
Over a third (35 per cent) are unable to pay for all their expenses without going deeper into debt, and 29 per cent believe their personal finances are in poor shape.
Over one in five (22 per cent) have a second job to further cover their expenses.
Young workers changing financial habits
The housing crisis is also taking a toll on young workers. With 81 per cent of Gen Z and Millennials renting because they can’t afford to buy a property, 72 per cent say that their rent takes too much of their expenses.
Over a quarter (26 per cent) say they have to move because of a rent hike, and 67 per cent do not think they’ll be able to buy their own property within the next few years.
The increase in the cost of living has made young workers change their habits with respect to the following:
- saving money (73 per cent)
- foods (68 per cent)
- bars and restaurants (67 per cent)
- clothing (67 per cent)
- leisure and sports activities (59 per cent)
- cultural outings (53 per cent)
- regular payment of credit card bills (48 per cent)
As employees' financial woes grow, a separate report found that 90% want their organizations to provide an employer-matched emergency savings account (ESA).
The situation is also taking a toll on young workers’ mental health, according to Leger. Among them, 70 per cent have experienced periods of anxiety in the past three years, with 57 per cent having this experience in the past year.
Over a third (35 per cent) have also experienced depression in the past three years; 21 per cent in just the past 12 months.
And Gen Z and Millennials expect things to get worse. Nearly half (47 per cent) believe the Canadian economic situation will deteriorate in 2024.
Young workers are loyal to employers
Amid their financial difficulties, most young workers express loyalty to their current employer, according to Leger’s survey of over 3,000 respondents.
Just 15 per cent of Gen Z and Millennials intend to quit their job in 2024. That number is slightly up from 13 per cent in 2022, but is still lower than the 25 per cent recorded in 2021.
Among those looking to find a new job, a salary increase (50 per cent) is the top reason.
Far fewer are hoping for new employment for the following reasons:
- to take on new/different challenges (36 per cent)
- having no opportunity for advancement within their current company (35 per cent)
- feeling bored or finding their job unstimulating (33 per cent)
- currently not having enough flexibility (24 per cent)
- employer’s mission doesn’t resonate with them (19 per cent)
- to move to another region (18 per cent)
- not getting along with their direct supervisor (12 per cent)
How can employers help with finance stress?
Financially stressed workers are costing employers billions of dollars, according to a previous report. And so it is imperative that they do something about it.
Employers can help young workers feel more financially stable by offering better investment advice and tools, coaching services, and financial literacy courses, according to one expert.
“What employers can do is help provide resources for [Gen Z] employees that help them start on the right path,” says Gregg Levinson, a senior consultant in human capital and benefits at Willis Towers Watson, in a Fortune article.
In addition to 401(k) plans, employers can also offer workers resources to help them pay off credit card debt or secure low-rate mortgages. Some employers provide even professionally-managed investments, according to the report.
“Employers are transitioning away from literally [saying], ‘Do it yourself’ to providing resources that align with how people access information, and what motivates them to take action and do it well,” says Levinson.