Baby boomers are finally starting to retire, and there are 80 million millennials ready to take their place. This transition will mark the largest generational shift in the post-depression workforce. There is great potential in the millennial generation, and plenty of talent. Consequently, companies that can attract and retain millennials will have an advantage over other employers in the coming years.
How can advisers help employers appeal to these younger workers? One way is to have great employee benefits — including a robust retirement plan. But there are some things to keep in mind when trying to engage a millennial employee with a retirement plan.
Make enrollment easy and automatic. Millennials are heavily dependent on technology. Many of them, especially younger millennials, are digital natives. They don’t know what the world was like without the internet, and they are exceptionally reliant on their phones. Don’t even think about handing a millennial a paper enrollment form; it’s an instant sign to the young employee that your client's company is behind the times.
In fact, it’s not even enough to provide online enrollment anymore. Text enrollment and the ability to manage retirement plans and other benefits via an app is the next frontier of benefits management. Systems that are easy and automatic are more likely to attract millennials. And once they are enrolled in the plan, they are more likely to be satisfied and willing to stay.
Not only can companies boost millennial participation by embracing technology, but implementing auto-enrollment is almost mandatory.
Retirement plans that have auto-enrollment have an 89% participation rate under the age of 35. Compare that to plans with voluntary enrollment where only 41% of participants under the age of 35 contribute. Millennials expect to be auto-enrolled and doing so tells them that you are invested in their long-term success.
Reduce eligibility times. Remember when you had to go to a travel agent or the airport to buy a plane ticket? Millennials don’t. They are masters of efficiency and that breeds a molecular disdain for waiting — for anything. They are the instant gratification generation. They certainly don’t want to wait to have to enroll in their employer’s retirement plan, or for their employer matches to be vested.
Rather than require longer eligibility times and expect years of service before vesting, companies that reduce these times can draw millennials.
Eligibility for plan enrollment at between zero and six months can be a great draw for millennials, and is quickly becoming the new normal. Employers that combine this shortened eligibility period with auto enrollment for benefits and monthly entry dates can set themselves apart and will see increased participation in the under 35 population.
Learn to communicate with them. Older generations learned by ingesting large quantities of data in short bursts. Millennials learn by taking in smaller quantities of information, but they do it almost any time of the day. A millennial can learn the same amount of information from a meme that an older American would learn in a 10-minute meeting.
Understanding the nuances of how millennials communicate can be key to being successful with them. Three general rules of thumb — keep it brief, keep it electronic and always explain why. The first two are pretty obvious, but the last one is just as important. Millennials don’t just want to know how much they should save — they want to know why they are saving.
It’s also possible to “gamify” benefits in a way that attracts millennials to a company.
Gamification is the growing trend of using a game to communicate a specific message or educate about a specific topic, and it’s on the rise with many organizations. Seventy percent of organizations report having at least one gamified application. Employers that offer rewards when workers reach certain milestones are more likely to attract and keep motivated millennials.
Use peer pressure and mentorship. Millennials learn from each other more than any other age demographic. Tap into this by identifying key millennials who help spread the word about your plan and its benefits. It sounds crazy, but don’t be afraid to come up with a way to make your plan “go viral.”
Millennials also love hearing from senior leadership. Bring your senior leadership in to an enrollment meeting and have them say a few words about the importance of saving and about how the organization is invested in making sure that their employees have a comfortable retirement.
These are just a few of the ways that you can turn a client's retirement plan into a millennial magnet. It is an adjustment, but it is one that is necessary. Soon millennials will outnumber boomers in the workforce. Employers willing to take the time to understand millennials and their needs can attract — and keep — the best talent.
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