From campus to career: Creating financial wellness for your newest employees
University graduates enter professional life after a senior year that, thanks to the pandemic, was very different than expected.
As employers welcome the Class of the Year 2021 into their workforce, questions naturally arise as to how best to understand their unique situation and attitudes.
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Working with social impact education innovator EVERFI, AIG Retirement Services conducted a survey of over 20,000 college students from October 2020 to May 2021 to examine financial attitudes, behaviors, and plans. The next employees will have a mixed bag of financial experience.
Turning good intentions into action
College seniors have experienced stress and tension for over a year due to COVID-19. Fortunately, our study found that many responded to this challenge with resilience and a healthy level of pragmatism.
College students said they intend to take important positive financial steps within the next year, with more than two in five (43%) expecting to start saving for retirement and slightly more (44%) planning to to set up an emergency savings fund.
Read more: How Employers Can Help Generation Z Better Understand and Realize Their Benefits
Despite these solid numbers, employers do well to remember that good financial behavior seldom happens on its own. Gentle encouragement and solid employee communication can be crucial in turning the best of intentions into real action.
Here you have the opportunity to coordinate the onboarding process with your newest employees in mind. We usually recommend employers to prioritize retirement planning, as getting started early can offer significant benefits for the financial future of your employees. Additionally, we believe that communicating about financial goals and responsibilities should be relatively easy, as this is the first time many in this cohort will encounter these ideas.
Some employers offer access to a finance professional as part of their benefit program, but college graduates who are just starting their careers may not find this benefit something they are ready for. Employers who offer this benefit may want to encourage their employees to use it regardless of age.
Read more: Millennial bosses make it harder for Generation Z employees
Taking the right financial steps early in your career can be very beneficial and a professional can help you with that. In addition, speaking with a financial professional can help broaden your perspective and give you more thought about your goals and objectives.
Some concerns to see
While our study produced many positive results, we also looked in terms of behavior. College graduates seem to enter careers with some addiction to credit cards, and this could indicate underlying financial stress or a warning sign of future financial troubles.
Almost half (48%) of the college students we surveyed have a credit card, and more than half (53%) of those who have one are charging two or more. and 38% don’t expect to pay their entire credit card bill every month.
Read more: If you want Gen Z, you have to work for them
Employers have a real chance to help by training their employees to increase financial literacy. Some college graduates entering the careers may need assistance with the basics of credit card billing and interest rates, and your employee communications may include personal financial training with an explanation of the benefits.
Read More: 7 Skills Employees Need To Be Successful In New Workforce
Another area of stress for younger employees is typically student loan debt, and our survey found that nearly half (44%) of college students will attempt to qualify for a student loan relief program. Many of our clients are public and nonprofit employers, and the public service loan forgiveness program designed for their employees is known to be complex and difficult to navigate. That’s why we hired Savi, a social impact technology company, to help nonprofits and public sector employees overcome the hurdles and take control of their student loans.
Follow the financial wellness approach
The student survey we conducted with EVERFI shows that employers have many different ways to steer their newest hires in the right direction as they start building a solid financial footing. Accordingly, corporate benefit plans are increasingly moving towards the concept of financial health and creating a wide range of programs aimed at improving financial health.
College graduates entering the world of work this year should step up the movement toward financial wellbeing, and employers can help build a solid foundation by providing the tools and training to help them meet their financial goals.