Among the many criticisms that millennials have to put up with, such as their addiction to smartphones or their aversion to real-life interactions, it is their spending and saving habits that they have been most criticized for.
Naturally, almost everyone around them gives them advice on how they can save more and begin planning for their retirement from an early age. But young people are often clueless about how they can begin saving for their retirement.
As an employer, there are several things that you can do to motivate your millennial workforce in order to make them save more for retirement:
Communicate the Benefits
If your employees have been hired straight out of graduate school or college it is quite possible that they will be unfamiliar with how to go about their retirement savings plans. They also have very little motivation to think about their retirement as they have only stepped foot in real life.
If they begin to save now they can significantly alter their future and therefore they must be educated on the options that they have. You should be able to draw a link between their economic goals and decisions to facilitate their understanding and this will also make way for greater participation from their end.
Feedback
If you have implemented savings plans in your office for your employees’ you should listen to their concerns and complaints. They have been rolled out for their benefit and therefore you should be willing to listen to their feedback and make the necessary revisions.
Financial Coaching
A little amount of financial coaching can go a long way in motivating your millennial team to save more for retirement. It should clear any doubts that they may have regarding retirement such as by what age they should retire and the amount of money that they might need to save to retire at the particular age that they have decided.
Many employees are under the wrong impression that they can survive their later ages solely on the state pension. Some forget to take into account the impact of inflation on their retirement savings plan.
You can show them the right way to go about their retirement planning. You can give them advice on how they can safeguard their economic future by devising a realistic budget which has been formulated with the help of right calculations which will generate the necessary income levels in retirement.
Increased Contributions
Employees should be encouraged to increase their contributions as and when they get a hike in their salaries. Since they already have a budget that meets their current expenses on a lower income, they should be able to completely save the extra money that they will earn as a result of the pay hike.
In this way, they will accomplish both objectives of saving money as well as maintaining their current standards of living without compromising on their lifestyle.
Budgeting Workshops
Certain millennials have student loan debt or other financial responsibilities to take care of when they join a job. With the right management of finances, they can enjoy the transition from being a student to becoming a professional.
If they struggle to manage their finances this transition will be less enjoyable for them. The expenses are only likely to increase with each passing year as they may have to shoulder greater responsibilities such as taking out mortgages, getting married and having children.
Holding a workshop annually will help your employees to reevaluate the way they manage their money enabling them to change their strategy as the life circumstances change. They will feel less stressed as they become more secure about their finances. It will improve their level of involvement at home as well as at work.
Saving a Lump-sum Windfall
As an employer, if you give bonuses to your millennial team you can advise them to save this bonus instead of spending it right away. Besides bonuses, there are various types of lump-sum windfall that they can save such as tax refunds, interest payouts, inheritances, etc. Saving this money helps them to stay ahead on their retirement savings plan.
Besides the ways to motivate which have been detailed above you can also motivate them to take actions to ensure greater financial security, such as writing a Will using a Will template.