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The benefits industry is clamoring to meet millennial needs. As of 2017, millennials account for the largest generation in the labor force – more than Gen Xers and baby boomers, according to Pew research.1 Adapting standards to engage this generation of employees is crucial for companies to attract and retain talent. This often means looking beyond standard approaches to communications. The answer? Utilizing technology to streamline digital benefits communication.
Advisors can help ensure their clients take a digital-first approach and enhance the user experience by delivering new avenues of communication to employees. Furthermore, the most millennial-friendly benefits communication tool can help beneficiaries understand their PTO, vacation and other benefits.
The time to enhance user experience is now
There is a sense of urgency to engage a new generation of employees. This is because study after study finds that many millennials are lacking in retirement savings discipline. In a report from the National Institute on Retirement Security (NIRS) titled, Millennials and Retirement: Already Falling Short, a bleak picture emerges.2 The report reveals that most millennials have nothing saved for retirement (66%), and those who are saving aren’t saving nearly enough. Additionally, the report highlights that barely one-third of this generation participates in employer-sponsored plans, despite the fact that two-thirds work for employers that offer retirement plans.
There are a number of barriers that face millennials on the retirement savings front, but one of the most prominent is finding new ways to communicate. By utilizing technology to streamline digital benefits communication, advisors can help enhance the user experience by delivering new avenues of communication to their client’s employees and ensuring that new employees become interested and satisfied with their benefits plans – consequently, keeping them satisfied and on the job longer.
First, it’s important to understand the mindset of the millennial generation which deals with a unique set of circumstances and attitudes that impact their financial health.3
“In a microwave society, they want easy and quick,” says Edwards Jones financial advisor Nick Lalonde, CFP. He’s noticed that e-signatures are a no-brainer with younger clients, while older generations often prefer the traditional signature approach. Millennials are also more interested in utilizing recordkeeper portals, whereas navigating the web can be “excruciating” for those who didn’t grow up with it in their lives.
Millennials are also risk-averse investors, which some say is due to what they saw in their early years during the Great Recession, where people close to them lost savings and homes. Additionally, they are entering the workforce with historic levels of debt.4
“Millennials are less knowledgeable about employee benefits than previous generations,” according to the Society for Human Resources Management (SHRM). SHRM recommends explaining employer matches in plain English to employees through easy-to-understand examples or even interactive tutorials. The NIRS report indicates that employers can show employees just how much money they are leaving on the table and how contributing to receive the match is an instant return on investment in their retirement plan.5
Automation is also key to reaching this stretched-thin workforce. SHRM notes that “by removing administrative barriers to saving, automatic enrollment can increase the likelihood that workers will contribute to retirement.” As noted in the NIRS report, Vanguard found that automatic enrollment made a large difference in plan participation — especially for millennials — as only 56 percent of millennials participated in an employer-sponsored plan with voluntary enrollment, but 92 percent participated in an employer-sponsored plan due to automatic enrollment.
Implement a multichannel approach to communication
Millennials are some of the savviest users of technology, which provides a direct path for communication by utilizing mobile applications for smartphones and tablets. The ability to access benefits, PTO and payroll data and make adjustments to retirement savings with an app that is accessible 24/7 is vital. Advisors and plan sponsors can initiate push notifications through the app, a familiar technique that is commonplace with millennials, but that previous generations might have seen as an intrusion.
It’s important not to assume, however, that communication through technology is all millennials want. Or as a Guardian Life report notes: “Millennials are not digital zombies.”6 Tech-driven solutions and dashboards in financial planning are valuable to millennials, but so is face-to-face advisor experience.
The report highlights that 45 percent of millennials want advisors to stay in touch using face-to-face interaction, compared with just 23 and 20 percent preferring email or text contact, respectively. The report also notes that while “technology, namely social media, facilitates learning and researching products and services, it does not replace an in-person learning environment.”
Additional research from the National Association of Plan Advisors (NAPA) finds that “‘millennial respondents prefer communication from a financial advisor at least monthly, while 28% prefer contact on a daily or weekly basis.”7 Lalonde agrees that while millennials may appreciate the ease of use that technology brings, he cautions advisors on maintaining connections.
The more automated the world becomes “the more of a premium will be put on face to face contact,” he says.
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