The arrival of millennials (those born between 1980 and 2000) in the workplace has caused its share of upheaval. They bring with them a certain number of changes in ways of working, especially through their increased use of technology. They differ on several points from previous generations: their style of consumption, which happens more online, their greater difficulty in separating personal life and professional life, as well as the issue of their personal finances. The latter is a major source of stress, exacerbated by the combined accumulation of student debt and credit. Despite this financial stress, millennials often hesitate to ask for help in managing their finances.
Organizations can no longer ignore millennials’ financial stress because of its negative effects on these workers’ general well-being, motivation and performance at work. But how can organizations take action on financial stress? Chan and colleagues (2017) sought to understand the reasons why millennials hesitate to get help in managing their finances and how organizations can help employees who struggle with financial worries.
Legend : Recommendation of our expert
Expert adviser:
- CLAUDIA CHAMPAGNE, associate professor, Université de Sherbrooke
ALEX HÉROUX-MESSIER, doctoral student in economics, Université de Sherbrooke
Authors:
- ÉTIENNE FOUQUET, research assistant, Université de Sherbrooke
PATRICE DANEAU, research assistant, Université de Sherbrooke
JOSÉE CHARBONNEAU, research assistant, Université de Sherbrooke
This initiative was made possible through a collaboration with the Université de Sherbrooke.
WHAT DO WE MEAN BY:
Financial stress
Financial stress involves the perception of not having adequate or sufficient personal resources to meet one’s current or future financial obligations. It involves a sense of worry and uncertainty about one’s financial health. If these feelings begin to take up too much space, financial stress can become excessive and lead to health problems, such as depression or trouble sleeping, or reduce engagement and performance at work.
Financial skills and self-efficacy
The sense of financial ability is the perception that a person has their own skills when it comes to personal finances, whether these are real or not. People who see themselves as financially competent have a higher sense of self-efficacy and are therefore more confident in their financial behaviours.
Perception of financial problems
The importance that people place on their financial problems. For some people, the feeling of general well-being is greatly influenced by financial issues, while for others, this plays only a minor role.
Perseverance
The degree of orientation a person has towards their goals and the intensity of their efforts in order to reach those goals.
Complete reference
- Chan, K. K., Huang, E. J. et Lassu, R. A. (2017). Understanding Financially Stressed Millennials’ Hesitancy to Seek Help : Implications for Organizations. Journal of Financial Education, 43(1), 141-160.
Method
The study was done with 488 millennials studying business administration, recruited in a university in the western United States. They responded to an online questionnaire that measured their levels of financial stress, efficacy and perceived financial skills, financial problems experienced, perseverance and hesitation about asking for help.
The average age of participants was 22 years, and 62.2% were men.
Because studies must always be interpreted with caution
This study was done with university students in business administration in the United States, a bias that cannot be overlooked; the sample is made up of students in the field of business. Therefore, their perception of their own financial knowledge and the importance they place on their personal finances may be higher than the general population’s. Also, the survey is not given in the academic article, which does not allow us to evaluate the wording of the questions and its potential impact on the understanding of the questions.
KEY POINT
Millennials showing a higher level of financial stress are also the ones who are the most reluctant to seek help in managing their finances.
The higher their feeling of competence and financial efficacy, the more likely millennials are to seek help in managing their finances. As a corollary, a weak sense of financial efficacy is related to a greater hesitation to seek this help, which can lead to the onset of financial stress or increase it.
Also, millennials who have sufficient personal resources are more likely to develop a sense of competence in managing their own finances and show greater perseverance in managing their personal finances.
WHAT CAN ORGANIZATIONS DO?
The first step should be to measure and evaluate the needs of employees when it comes to managing personal finances. It is possible that the need is not there. If there is a need, it will be important to measure the scope of the perceived problem in order to adjust presentations and the type of help offered.
To promote help-seeking behaviours and reduce financial stress, employees must become aware of the importance of healthy management of their personal finances and see that they have the knowledge they need to manage their personal finances. The authors of the study therefore suggest a certain number of actions for organizations that wish to support millennials in adopting behaviours and attitudes that promote better management of personal finances.
Create programs that promote skills development in managing personal finances
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