An Eye-Opening Millennial Q&A

Kevin Boyles at Millennium Trust says companies have been responding to the pandemic with exceptional agility—driven in no small part by the expectations of their Millennial workers.

The pandemic has inspired companies to re-examine long-held ideas about employee engagement and financial security. Kevin Boyles, vice president of workplace savings solutions at Millennium Trust Co., says the Millennial generation is also having a big impact on how employers are responding to the present moment.


PLANADVISER: How have you seen employers respond to the challenges presented by the coronavirus pandemic?

Boyles: There has been significant innovation in some sectors. Some employers have introduced new employee benefits that meet evolving needs. For example, the Washington Post has reported how Microsoft, Bank of America and Accenture recently introduced educational benefits for employees with school-age children, meant to help parents manage the demands of work and virtual school.

Other companies are demonstrating that they understand and value employees by adding emergency savings accounts, health savings accounts (HSAs) and employee hardship funds. So far, plan advisers have been on the front lines of this benefits revolution. While some newly minted benefits may be available temporarily, others are likely to become permanent additions because they meet the needs of Millennials (and Generation Z). Soon this demographic [Millennials], ages 24 to 41 in 2020, will compose the largest segment of the American workforce.

PA: What are the longer-term implications of this fact about Millennials for employers and advisers?

Boyles: As has been widely documented, Millennials tend to do things differently than older generations. They prefer flexible work options. In the 2020 “Deloitte Global Millennial Survey,” it is reported that seven in 10 Millennial employees say they would like to have the option to work remotely after the coronavirus crisis ends. In addition, surveys from the likes of Upwork and the Freelancers Union show many Millennials prefer to engage in freelance and gig work rather than full-time employment. 

The challenge for employers is figuring out how to engage employees, sustain productivity and build loyalty with a young and, sometimes, distributed workforce. The task may force employers to rethink the types of benefits offered and who should receive them. Recent surveys sponsored by Uber and Lyft found that the majority of participants would prefer to work as independent contractors while having access to benefits that are normally available only to employees.

PA: What else have you discovered about the “Millennial mindset”?

Boyles: First of all, the generation’s experience has been shaped by unprecedented economic circumstances. During their formative and early working years, the United States suffered three recessions triggered by traumatic events, including the “Y2K-9/11” recession of 2001, the financial crisis/Great Recession of 2007 to 2009 and the current pandemic recession of 2020.

These experiences reduced earning power, altered career paths and ignited a passion for savings. While the Great Recession touched all generations, its impact in some ways was particularly strong among Millennials. The St. Louis Federal Reserve’s Center for Household Financial Stability (CHFS) has reported that Millennials have accumulated significantly less wealth than anticipated—about 34% less—based on estimates developed from the experiences of previous generations at similar ages.

Long before COVID-19 spread across the world, disrupting economies and markets, Millennials tended to be skeptical financial conservatives. Overall, members of this demographic cohort began saving earlier, and save as much, or more, than previous generations. However, for years, they eschewed investing. Today, one narrative explaining the strength of financial markets during the current economic downturn holds that bored Millennials are trading stocks through online investment platforms. If their experience is similar to that of other active day traders, they may underperform the market, which could renew cynicism about investing. 

PLANADVISER: What do we know about the short-term financial pressures facing this generation?

Boyles: The pandemic recession is taking a toll on Millennials in another way. It is forcing many to spend their savings on current day-to-day expenses. According to the 20th annual Transamerica “Retirement Survey of Workers,” published in May, one in three Millennials has taken, or plans to take, a loan or distribution from their retirement plan accounts in order to remain financially solvent. Consequently, rebuilding savings is likely to be a priority for this group now and as the economy recovers.

Millennials also have come to think about work differently than previous generations. Approximately 40% of Millennials freelance in some capacity, as of September 2019, again according to Upwork and the Freelancers Union. They prefer to have flexible schedules, work remotely, choose their projects, be independent of office dynamics and control their financial futures.

PLANADVISER: What types of advice and support do Millennials need right now?

Boyles: The challenges Millennials face as independent workers are similar to those of other workers. They include being able to put enough money into savings, saving for retirement, receiving unpredictable income streams, receiving fair pay rates and having access to affordable health care.

That’s where benefits come in. Millennials place a premium on benefits. Many are willing to accept less pay in return for benefits they value. Advisers and employers who understand the Millennial mindset will take a different approach to employer benefits. They’ll ask employees which benefits are most valuable and develop benefits plans that maximize benefit satisfaction. They might even consider making some benefits available to gig workers.

One option that could prove attractive to both W-2 employees and freelancers is benefits personalization. Employers provide a diverse menu of benefits and give workers the opportunity to build the benefits packages that meet their specific needs. Some benefits options may be available to freelancers while others are not. The benefits most highly valued by Millennials may include retirement savings plans, emergency savings funds, student loan assistance, work sabbaticals, skills training, paid family leave and more flexible work hours, to name a few.

The pandemic has accelerated change in the workplace. It’s quite possible that the post-pandemic world will align more closely with the values and ideals of the Millennial generation than with those of older generations. Advisers and employers can reap benefits when they talk with younger workers, learn how they think and what they value, and adapt work environments and benefits structures to meet those needs.