Should employers support millennials with the cost of living?

It was recently announced that the Bank of Mum and Dad (BOMAD) is now the 9^th biggest lender in the UK. This news has divided the nation about the millennial generation. For some, the rise of BOMAD is the sign of a broken housing market and for others, it is a symptom of a generation that lives for the here-and-now and is failing to plan for the long term.

But what if the problem is actually a mix of the two? And if so, is there a responsibility for employers to support this generation? After all, the cost of living in the UK has never been higher; utilities are more expensive than ever, the price of the average weekly shop continues to grow, house prices keep rising and so does the cost of renting. It is therefore no surprise that millennials are struggling to cobble together a deposit and are turning to their parents to help them get their feet on the property ladder.

However, this high cost of living shouldn’t be seen as an excuse for millennials to adopt a short-term attitude towards their finances.  A lot of resources are now available to help this group with long-term financial planning, especially with the recent introduction of auto enrolment.

The first step, however, is to ensure that millennials understand the difference between planning for the future and achieving their short-term goals. Whether it’s saving for a wedding, a deposit for a house or building up an emergency fund, increasing financial engagement will help these employees to make better financial decisions in both the short and long term.

To support this goal, companies should consider introducing goal-setting tools that help their employees to plan ahead when it comes to their finances. These could consist of interactive workshops, online platforms, or payroll initiatives that help staff set aside money to achieve specific goals in approaching months or years.

Not only will tactics like these help staff put money aside, but they will also support employees’ overall wellbeing. Financial concerns can have a direct impact on staff wellbeing, so providing support for these issues can lead to happier and healthier workforces.

For this reason, it is vital for employers to educate their employees about short-term financial management – especially when it comes to managing debt. Education and support around reducing the cost of financial commitments like loans or credit cards can have an enormous impact on stress, as well as affordability, and help employees to plan ahead and eliminate their reliance on BOMAD altogether.

Combining this support with employee benefits that reduce the cost of the everyday items such as childcare, travel or even holidays can have an extremely positive impact on staff wellbeing and improve their quality of life. However, in order to achieve this goal, employers will need to work closely with their staff to make their intentions clear and confirm that their employees share these same ambitions.

There is a strong incentive for employers to encourage their employees’ financial wellbeing in this way, as this will also improve their emotional wellbeing as well as the overall workplace culture. The good news is that there are many things that employers can do to complement financial education and help their staff without having to resort to hefty pay rises. In fact, for a generation that can often be viewed as focussing too much on the short-term, there are a number of ways that employers can support them and ease their financial woes.

Author: James Malia, Sodexo Benefits and Rewards Services

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