Earned Wage Access- the card to winning the talent war as Millennials and Gen Zers reshapes the workplace benefits
By 2025, millennials will make up 75% of the global workforce while Gen Zers will account for 27%- based on Deloitte estimates. According to Aon Hewitt, millennials are currently the largest generation in the Singapore workforce. In fact, the 2017 Deloitte Global Human Capital Trends report highlighted that greater than 44% of millennials are already in leadership positions. Therefore, it is crucial that organisations take concrete actions to meet the expectations and preferences of these millennials and Gen Zs. But what will they want from their workplace – and what won’t they accept? This could compound the changes to work on, as employers seek to attract and retain these next generations of talent. Find out what motivates them!
For instance, the old concept of having stucked working at a fixed work station within set work hours could be replaced by something much more ad hoc and flexible. Some 42% of these generations of workers value work-life balance, remote working and flexible leave as their top priorities when looking their next career, maximising their experience and satisfaction. This means that employers will need to change how they attract, develop and retain talent, fostering personal development. Each generation has its own unique style, needs, goals and traits. It is vital to create an environment in which all employees feel engaged, inspired and energized and can thrive. In addition, diversity and inclusion matter a lot to these generations.
Flexibility is a high priority for these generations of workforce. They have less patience than previous generations for inefficiency, hierarchy and rigid policies. Teams are flatter and the job of managers is to support and empower, rather than delegate and control. From a leadership standpoint, this means more focus on providing freedom and flexibility and greater independence.
In addition, these bunch are also more tech-savvy than their predecessors and are prepared to demand a positive work culture that suits their needs. Organisations that fail to recognise those needs will struggle to build a strong and engaged workforce out of these generations of talent. This generation came about surrounded by technology. They communicate, work, live and play primarily through computers and smartphones. The same way management has to set themselves up for reinvention- to keep up with these generations, and integrating technology-related culture and benefits could play a key role in adapting to the needs of these generations.
Most millennials started their early years of career during the 2008 Global Financial Crisis, which saw unemployment skyrocket and wages collapse. As many economies around the world – including Singapore’s were paralysed, Millennials were the hardest hit and naturally feel the most anxiety in the event when financial uncertainties strike.
In the latest economic disastrous episode, the covid-19 pandemic has tipped the global economies into recession, staying fragile beyond- which renders job opportunities for the younger workforce more precarious. Some were even underemployed or jobless. Many of these generations aren’t future-proof at the moment and don't have a lot of savings to fall back on- which makes them especially vulnerable.
Everyone is feeling stress from rising costs and an uncertain economy. However for Millennials and Gen Zers, the negative effects are particularly acute. As inflation continues to skyrocket, they slide further into financial instability, having trouble balancing their finances, unable to put away money to save, even with a decent wage or wage increase. They start overdrawing on their bank accounts or turning to unsustainable solutions such as loans only to meet basic purchases- and not because they are spending frivolously. This is particularly the case by the time it gets to mid-month. In such a financial situation in which they can’t have control over their short-term finances, least to say their longer-term goals. This could be a huge red flag to employers that substantial, targeted, ongoing support, additional to current policies, are needed to ensure the younger generations aren't left behind.
Across the world, many Gen Zers, are reportedly in financially insecure positions. Data from Deloitte’s 2022 global Gen Z and Millennial Survey shows that a third of Gen Z respondents worry about the cost of living above all other concerns, 45% live pay-cheque-to-pay-cheque, and just more than a quarter doubt they’ll retire comfortably. Even before the current economic conditions developed, younger generations were facing greater struggles than their parents to overcome financial challenges and prepare themselves to hit important milestones like homeownership. In the same vein, these generations’ wages also aren’t going as far as their predecessor did, as for decades, the cost of living has far outstripped the pace of pay rises. Gen Z have about 86% less buying power than Baby Boomers did at the same age. Additionally, higher interest rates are driving the threat of a looming recession. It all points to a precarious situation for these generations. How are employers going to step up and take a bigger role or rather a corporate social responsibility (CSR) in implementing money-management strategies to ensure the finances of these generations stay healthy- helping them create an emergency fund, stave off debts and increase their stake of having a more secured financial future?
Constant money stress have negatively affected Gen Zers’ emotional and psychological state as it does to their physical state. In the organisational context, it simply means decreased productivity, morale, absenteeism- even accidents in the workplace and rising healthcare costs. One practical solution organisations could pick up is to have Earned Wage Access rolled out as a financial wellness benefit. A liberating salary advancement scheme, empowering employees to have the flexibility to choose when they get paid within the pay cycle from their accrued salary yet received. A proven solution to help to ease the short-term financial crunch employees experience- relieving them of their financial woes. Moreover, it works as a one-stop neobank where financial literacy series such as insurance are provided. in time, it gives them the opportunity to gain financial footing, elevate their financial positions and resiliency and be better geared for their retirement.
We are in a period of historic voluntary turnover known as the Great Resignation. Unless organisations work towards creating a better working environment, value alignment and implementing benefits changes that help attract and retain these talents, it could be especially challenging. Today’s younger workers want it all – and are willing to walk away if they don’t get it. How are employers going to make themselves and their workforce more future-ready? Perhaps FriYAY could be one of the answers.
References
https://www.bbc.com/worklife/article/20221013-why-gen-z-are-right-to-be-worried-about-money#:~:text=Data%20from%20Deloitte's%202022%20global,doubt%20they'll%20retire%20comfortably.