Generation Y workers may present a challenge to employers' efforts to promote retirement plan participation and encourage effective planning.
Experts note that these workers are sometimes skittish about the financial commitment a retirement plan represents, and may not enroll as a result. This attitude could also prevent them from getting the most out of their plan. Emphasizing the portability of accounts could help to offset this and give them some perspective.
Communication and education efforts may need to be tweaked in order to have the same impact on these workers. The use of texting and social media may help to catch their attention more easily. They are likely to move on quickly if they believe information does not pertain to them, however, so communications must be written with some care. Their technological savvy is accompanied by a fairly short-term focus, common to younger workers, and a desire for quick outcomes.
In the wake of the financial crisis, many Gen Y workers may have significant student loan debt even as they are experiencing difficulty in finding employment. The current circumstances and recent events in the economy may make them more receptive to efforts promoting financial stability, but they are not necessarily sure of themselves and their path toward that stability.
As a result, employers who can help point the way and guide them in the right direction may be very successful in strengthening retirement plan participation. One method of doing this might be to recruit older employees as mentors, either by requesting volunteers or offering incentives. These individuals can then help younger workers come to understand the importance of financial planning on a more individual and direct basis. HR professionals might find this an effective way to spread the workload, leverage the untapped resource that employee experience represents and strengthen employee benefit plan administration, enrollment and participation.
Implementing retirement planning
Paying particular attention to employer matching contributions and other advantages of participation may help to drive enrollment. At the same time, efforts to promote the long-term benefits may be more successful if they focus on the difference between starting to save immediately and waiting.
This could give the prospect greater immediacy, preventing employees from seeing it as a long-term project that can be postponed indefinitely and taken up at some future date. Additionally, it might help to set higher default contribution rates and make use of automatic plan features to set workers' expectations higher.
