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5 Economic Facts about Millennials (And Why You Should Care)
When it comes to money, no generation has faced financial turmoil quite like millennials. While people between the ages of 18 and 34 are often touted as being economically irresponsible by their baby boomer counterparts, the truth is that the financial issues facing this demographic are very real and, often, extremely crippling. You'd be hard pressed to find a recent college grad who wasn't saddled with at least a few thousand dollars of student loan debt, and it'd be equally difficult to locate an entry-level employee who was completely satisfied with his compensation.
It's not breaking industry news that millennials are quickly taking over the workforce - as an employer, you likely see a slew of Generation Y resumes cross your desk every day. To fully integrate and engage the top talent from this generation, it's vital that you develop a thorough understanding of how these workers think about money. Read on to discover five economic facts about millennials - and why you should care.
1. Millennials are digital natives
While older generations have turned millennials' affinity for technology into somewhat derogatory tropes - think social media addiction and "selfie" culture - the reality is that millennials came of age with electronic devices in their hands. A report from the White House's Council of Economic Advisors explained that technology progressed so rapidly between the 1980s and now that people who grew up in this era were at the forefront of advances in computers, cell phones, televisions, music devices and video games. As a result, technology occupies a central space in their lives and is always in the forefront of their thought processes.
Technology is so ubiquitous in the lives of millennials that its influence extends into this generation's financial habits as well. Because millennials have access to unlimited information at the push of a button, they've become an extremely entrepreneurial demographic. The source cited a study in which over half of the millennial respondents had an interest in starting a business, even though the peak age for entrepreneurs has traditionally been considered around 40 or 50. Social media marketing and e-commerce has made building viable companies from scratch easier and cheaper than ever, which is why so many millennials have entrepreneurial instincts they can afford to invest in.
As an employer, you should strive to harness the knowledge and creativity your millennial employees posses simply from having been born into this digital generation. You should also realize that your younger workers may be nurturing their small business dreams on the side, so retention efforts are crucial.
2. Most millennial workers have health insurance
Unlike in the past, young workers are more likely to already have health insurance as they're entering the workforce. Search Party explained that before the passing of the Affordable Care Act, people were forced off their parents' insurance plans when they graduated from college or turned 19. Since the legislation became official in 2010, however, people are allowed to be on their family's plans until the age of 26.
While this means that many of your young hires won't opt into your organization's insurance plan right away, it also means that millennials are acutely aware of the insurance world and are used to being on solid plans provided by their parents. In terms of recruiting the best young talent, don't underestimate how influential strong benefits packages are.
3. Many millennials are saddled with student loans
While baby boomers may have been able to pay for college through part-time and summer jobs, the same can't be said for millennials. With private universities charging upwards of $60,000 per year and affordable public institutions still costing more than $10,000, most millennials are funding their educations with help from student loans. Due to the competitive nature of today's job market, however, young people can't afford to forgo getting their degrees. Enrollment is higher than ever among millennials, especially in low income households, which means that national debt among this generation is also skyrocketing. At the second quarter of 2014, student loan debt in the U.S. exceeded $1 trillion.
Since this impedes saving, most millennials are waiting until later in their 30s to settle down, buy homes and start families. Since young people are more likely to be single and renting, they may be more open to travel or relocation opportunities with your business. This also means that you should ramp up retention efforts, since your millennial employees have the flexibility to accept any new job offers that may come their way.
4. Millennials are an urban generation
Most millennials aren't packing up after college and heading back to their home towns. Instead, they're migrating toward major urban areas. Fortune magazine reported that cities in the U.S. are growing faster than any other type of living area in the country, a phenomenon that last occurred in the 1920s. This means that a growing number of young people are choosing not be car owners, and opt instead to rely on public transportation.
Because this trend doesn't appear to be stopping any time soon, it's clear that companies who want to attract the best new talent need to put a lot of thought into their locations. While the cost of leasing office spaces in popular locales like New York, San Francisco, Boston or Chicago might be more expensive than securing suburban spaces, opting out of urban hubs means you're missing out on large pools of qualified candidates. If you do choose to start a headquarters outside the city, make sure it's close enough to be accessed from public transportation. Fortune reported that millennials are riding trains and buses 40 percent more and using vehicles 23 percent less.
5.Millennials are likely to stick with their first employer
Despite the reputation they've earned as being flighty and noncommittal, millennials are actually quite likely to remain with early-career employers for long periods of time. According to the White House report, Gen X workers were actually far more likely to leave their first jobs very early into their careers than their younger counterparts. This is because millennials grew up during a recession and therefore value job security and steady income.
So instead of assuming young workers are only using you as a proverbial stepping stone, invest in them as if you were grooming them to be long-term members of your team. Chances are, they aren't planning on jumping ship within a couple of years - unless they don't feel supported by your company's culture. If you treat millennials as though they're in it for the long run, they likely will be.
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