Almost 90% of millennials have admitted that money worries routinely affect them at work. The figure has emerged from the latest Financial Wellbeing Index from asset management firm Close Brothers, compiled in partnership with workplace wellbeing guru Professor Sir Cary Cooper. [1]
In the findings covering millennials, the Index found that 87% have money issues on their minds when they’re trying to work. One third (36%) have made zero preparations for unexpected financial events, and just 34% have set aside a savings pot for sudden emergencies. Indeed, more than half (53%) of workers in the 18-to-34 age group worry about money either all the time or often – an anxiety far less prevalent among older workers, affecting 36% of 35-to-54 year olds and just 20% of those aged 55 or over.
However, while millennials are somewhat sketchy about their short- and medium-term finances, more than half of them (52%) have drawn up financial plans to help them achieve future goals. That beats the 35-to-54 and 55+ age brackets (40% each).
Close Brothers head of financial education Jeanette Makings said: “The number of millennials that are anxious about money is a real cause for concern – [as is] its knock-on effect on their ability to focus and be productive at work. While it’s certainly positive that they are the best-performing generation for budgeting and planning, it is clear that there is a significant need for financial education targeted to help their particular concerns.
“By raising their financial awareness and confidence, employers can help their younger workers develop better money habits and greater financial resilience, as well as benefitting from their improved … focus at work.”
Professor Cooper added: “Although millennials worry the most about money problems compared to other generations, it is encouraging to see that they are better planners and budgeters compared to their older counterparts. Society should really cut the millennials some slack when it comes to managing their finances, as they are doing better than they think. Millennials have different financial needs and face different challenges, such as increasing house prices and having to pay off student debt. Due to these pressures, they may worry more about money and find it difficult to focus on their long-term goals.”
How can leaders help millennial staff deal with financial stresses?
The Institute of Leadership & Management’s head of research, policy and standards Kate Cooper says: “Here at the Institute, we have long recognised the impact of financial worries upon mental health. In most corners of the working world it’s an area that, by and large, has been ignored until only relatively recently. But when you reflect on it for just a moment, it makes complete sense: if you are worrying about paying bills, and you are having frequent phone calls from your creditors during working hours, which you are trying to either avoid or take, that is a major distraction. Even worse, if you have become trapped in the cycle of payday loans, with their often punitive interest rates, it’s very difficult indeed to see your way out of it. And that will occupy a large swathe of your thought processes.”
She notes: “I’m not usually a big fan of generation theory. But when you consider those who experienced as young people the financial crash of 2008 – who understood, even with only cursory reading and research, how some financial institutions collapsed altogether and others had to be propped up in unprecedented ways – it’s not surprising that they are particularly concerned with financial security. In addition, millennials are always being bombarded with media messaging telling them that they’re never going to be able to afford to buy their own houses, and that the baby boomers have waltzed off with all the money. It’s a powerful – and, one might add, rather gloomy – discourse to deal with. Organisations can certainly help their people address those concerns.”
With that in mind, Cooper says: “Some of the best initiatives I’ve heard of are where employers offer staff free-to-attend financial-planning workshops. These should ideally be held without any assumptions about what workers want to get out of them. If you make such workshops open to all comers, then employees from every age group will turn up and, through the discussions they generate, everyone will be able to share knowledge and tips about which sort of approaches work. Engaging staff on low-interest salary-loan schemes – alternatives to payday loans that can be obtained through providers such as credit unions – could provide staff with the valuable peace of mind they need to focus on their tasks.”
She adds: “Of course, employees would also benefit from the availability of coaches who can provide a kind, receptive ear. We tend to think of coaching strictly as a resource for addressing specific task-related problems, teamwork issues or technical difficulties, but it works for so many things. Those classic coaching techniques of asking the right questions to help coachees arrive at their own solutions, making them accountable for those solutions and setting incremental action points to check off or revisit are brilliant not just for work-related problems, but financial ones, too.”
For further insights on the themes raised in this blog, check out the Institute’s resources on coaching.
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