Retirement Plans as a Recruitment Tool: How to Attract Millennial and Gen Z Talent
The workforce is rapidly evolving, and so are the expectations employees have for their benefits. For businesses looking to hire and retain top-tier talent, understanding and adapting to these expectations is essential. Millennials and Gen Z now make up a significant portion of the workforce, bringing new priorities to the table—especially around financial wellness and retirement planning.
Gone are the days when a paycheck and basic healthcare coverage were enough to attract star candidates. Today’s younger generations want more, and a modern retirement plan could be the competitive edge your business needs to stand out.
This article explores the financial priorities of Millennials and Gen Z, strategies to align retirement plans with their needs, and how Maxus Plan Solutions can help you create a plan that attracts and retains top talent.
Why Millennials and Gen Z Care About Retirement
Contrary to common stereotypes, Millennials and Gen Z workers are highly conscious of their financial futures. According to the 2023 Transamerica Retirement Survey, 70% of Millennials and over half of Gen Z are already saving for retirement. Several factors contribute to this financial awareness:
- Skepticism About Social Security: Headlines about the instability of Social Security have driven younger workers to plan for self-funded retirements.
- Student Loan Debt: Millennials, in particular, face significant student loan burdens, which heightens their focus on financial planning.
- Financial Independence: Unlike older generations, Millennials and Gen Z emphasize autonomy and are proactive about building safety nets.
Offering a retirement plan that reflects these priorities signals that your business values their financial well-being and long-term goals.
Tailoring Retirement Plans to Millennial and Gen Z Preferences
To attract and retain younger talent, your retirement plan must go beyond basic offerings. Here are key strategies to meet their needs:
1. Matching Contributions: Immediate Value
Younger employees prioritize tangible benefits they can see right away. Offering a strong matching program—whether dollar-for-dollar or a percentage—demonstrates your investment in their future.
- Highlight matching contributions in the job postings and onboarding materials.
- Consider auto-enrollment with a default match to boost participation rates.
2. Roth 401(k) Options: Long-Term Savings
Roth 401(k)s, which tax contributions upfront but allow tax-free growth, appeal to younger employees with long investment horizons. This option is especially attractive for workers in lower tax brackets today, maximize tax savings in retirement.
3. Access to Financial Wellness Resources
Rather than offering direct financial education, employers can partner with their recordkeepers or plan advisors to make financial wellness resources-such as budgeting tools or webinars – available to employees. Many Millennials and Gen Z workers appreciate support that helps them manage debt and save strategically without requiring the employer to provide advice directly.
4. Digital Accessibility: Meeting Tech Expectations
Millennials and Gen Z are digital natives. Retirement plan providers should offer user-friendly apps and online dashboards, enabling employees to monitor their savings anytime, anywhere.
5. ESG Investment Options: Aligning with Their Values
Younger generations care deeply about social and environmental issues. ESG (Environmental, Social, and Governance) investment options allow employees to align their savings with their personal values, creating a deeper connection to your benefits package.
6. Flexibility Through Sidecar Accounts
Sidecar accounts—savings accounts linked to retirement plans for short-term financial needs—bridge the gap between emergencies and long-term goals, ensuring employees remain engaged with their retirement savings.
The Competitive Advantage of a Strong Retirement Plan
Adapting retirement benefits to attract younger workers isn’t just beneficial for them—it’s a smart business move. Employers offering tailored, meaningful benefits experience:
- Lower Turnover: Employees are more loyal to companies that help them achieve financial stability.
- Improved Productivity: Financially secure employees experience less stress and are more focused at work.
- Cost Savings: Reduced turnover and higher engagement translate to lower recruitment and training expenses.
Maxus Plan Solutions: Helping You Stand Out
At Maxus Plan Solutions, we specialize in designing retirement plans that not only comply with regulations but also align with your workforce’s unique needs. We’ll help you: collaborate with your plan advisor and recordkeeper to implement features like Roth 401(k)s, auto-enrollment, and ESG fund options (without crossing into investment advice or participant education). We also:
- Add Roth 401(k) and ESG investment options to your plans.
- Implement seamless, tech-driven solutions for employees to access their benefits.
- Ensure compliance with federal and state regulations while maximizing plan effectiveness.
Our expertise takes the complexity out of retirement planning, empowering your business to attract and retain the talent you need to thrive.
Conclusion
The job market is competitive, and Millennials and Gen Z workers expect more than just a paycheck—they want benefits that secure their financial futures. A well-designed retirement plan can make your business their first choice.
By offering access to financial wellness tools, flexible contribution options, and modern plan features, you’re investing in a stronger, more dedicated workforce.
Take the next step. Let us guide you in creating retirement plans that resonate with today’s workforce while supporting your company’s long-term goals. Contact us today to learn more.
With the right strategy, your business can turn retirement benefits into a powerful tool for growth and success. Let’s build a plan that works for everyone.