What You Need to Know
- Forty-four percent of Gen Z and 38% of millennial employees say financial stress interfered with their ability to do their jobs.
- Gen Z is more open to advice than other generations.
- Gen Z workers are mature about personal finances and are searching for tools to help them manage their money.
Stress about finances has had an outsize effect on the ability of Generation Z and millennials to do their jobs during the pandemic, according to a survey of 401(k) plan participants released Wednesday by Schwab Retirement Plan Services.
Yet Generation Z is already developing good financial habits.
“When it comes to personal finances, Gen Z workers are mature for their age,” Catherine Golladay, head of Schwab Workplace Financial Services, said in a statement. “They are clear-eyed about the challenges they face, looking for more tools to manage their finances, and optimistic that the right resources will help them improve their financial behavior.”
Forty-four percent of Gen Z workers and 38% of millennials reported that financial stress had interfered with their ability to do their jobs this past year, compared with 24% of all workers.
About one-third of these younger 401(k) plan participants had already predicted that their retirement would be delayed because of the pandemic, compared with one-fifth of their older Generation X co-workers.
“Gen Z workers are just starting their careers at a time of upheaval at home and in the workplace — from new health and safety challenges to the rapid expansion of virtual offices and dramatic swings in our economy and markets,” Golladay said.
“It’s a stressful environment, and young people are looking to their employers for support. The labor market is tight, and companies have an opportunity to attract and retain talent by providing tools and resources that help workers manage their money.”
Schwab said the survey results suggest that employers that handle the pandemic crisis well can build employee loyalty. About one-quarter of Gen Z workers and one-third of millennials said their loyalty to their employer has increased because of how their employer has managed COVID-19.
Logica Research conducted the survey in April among 1,000 respondents age 21 to 70 who were actively employed by companies with at least 25 employees and were 401(k) plan participants. They were not asked whether they had 401(k) accounts with Schwab Retirement Plan Services.
Gen Z Participants
Gen Z workers are looking for help to manage their financial lives today and to plan for their futures, according to the survey. Sixty-two percent of Gen Z respondents said their financial situation warrants advice from a professional.