Educating and Engaging Early Career Public Sector Employees
Written by Alex Hannah, ICMA-RC, Vice President Corporate Communications and Education
Today’s youngest employees — think 18 to 32 years old, are entering the workforce in record numbers. This group, known by most as Generation Y, and representing 60 million Americans is three times the size of Generation X.
Like most generations, as they start out their career, many will not even begin to start thinking about retirement for several more years. However, Generation Y differs from past groups in that they are starting their careers during very challenging economic times and often are entering the workforce with financial disadvantages already. According to a 2008 MSN article titled, “Why Generation Y is Broke,” the average college debt for recent grads is more than $20,000. In addition, this generation is the first to have easy access to credit cards early on in their lives and this has caused additional debt for many of them before they enter the workforce. According to a 2008 study by college-lending firm Sallie Mae, college seniors graduated with an average credit card debt of $4,138 — up 44 percent from 2004.
Many public employees who are just starting their careers are focused on paying off credit cards and student loans, buying their first homes and starting families. Those immediate financial needs will often trump savings needs. However, some members of Generation Y are aware of the personal responsibility it takes to build retirement security. A report from the Employee Benefits Research Institute (EBRI) shows that one in six Generation Y workers have given some thought to retirement. Twenty-percent say they have given a great deal of thought to retirement. A separate study by EBRI and the American Association of Retired People (AARP) showed that three in five young adults already feel that they are behind in preparing for retirement. The availability and abundance of financial-related information is partially responsible for this heightened sense of awareness among people starting their careers. The recent changes in the market may also have had an impact on attitudes and decision-making for this demographic. Interestingly enough, even with all of the media coverage about saving and retirement, only one in 10 young adults ranging in age from 19 to 39 consider saving for retirement, affording retirement, or maintaining one’s lifestyle in retirement as part of their definition of being financially secure, according to results from a 2008 joint study by EBRI and AARP.
What is evident about this group of individuals is that they are technology-savvy, plugged-in, constantly looking for stimulation, diverse, social, and smart. Having grown up with computers, the Internet, mobile phones, video games, and mp3 players, this demographic is always connected to information: from their peers, the media, and many other digital outlets. With this in mind, it makes sense to make financial education engaging, accessible, and distributable in the ways with which Generation Y are most familiar.
The challenge for plan sponsors and retirement plan providers lies in developing and implementing education and communication strategies and tools that will inspire early career public sector employees to save as well as manage their retirement savings. Effective solutions run the gamut but most tend to leverage technology and engage the user in a simple, fun, and interactive manner. Currently there are a number of noteworthy retirement education-focused tactics being used. The following are three we thought were worth mentioning.
Enrolling wirelessly. Most individuals who fall into the Generation Y category are “digital natives,” meaning that they were born into a generation where technology has been present throughout their lives. This group tends to adopt new technology early on and is usually very comfortable with using it in myriad ways. For these reasons, it seems natural to offer retirement plan enrollment through mobile technology. MassMutual Financial Group did just that by introducing a wireless hand-held device that allows workers to receive financial education and enroll in their employer-sponsored plan1. MassMutual calls it the e4, which stands for “Enhanced Electronic Education Experience.” When meeting with clients, MassMutual hands out the e4 to employees to give them a quick, fun, and easy way to receive financial education and information and sign up for the plan. The company has had a 95 percent success rate of enrollment among non-participants who use the device.
Turning saving into a game. Mortenson Construction, a private employer based in Minneapolis, MN, decided to partner with a software programmer to create a video game about saving for retirement2. The game, called “Cabin Fever,” requires players to make certain financial decisions which ultimately affect the type of home they will reside in the future. If the player makes the right choices he or she ends up in a comfortable and cozy retirement cabin. If the player makes the wrong choices he or she winds up in a cardboard box instead. Cabin Fever provides interactive and engaging scenarios where the player’s financial decisions can affect them 10 to 40 years in the future. The game is provided on disk with other Mortenson Construction HR benefit materials during new employee orientation. It was developed to stand out from all of the other information provided during orientation. So far the response has been positive among employees. In addition, the game has received industry recognition. It received a first place Eddy Award in March 2010 from Pension & Investments Magazine.
Leveraging social media and early career voices. ICMA-RC recently launched a new financial education Web site called www.thedreambigsite.org to connect with early career public sector employees. The site leverages social media and offers young public employees opportunities to learn about and discuss topics like saving and retirement in a way that is second nature to them: among their peers on various online media platforms. The site offers a number of features such as blogs written by and for Generation Y users focused on five main topic areas: credit, investing, loans, saving, and retirement. Also available on the site are RealityCheck, straightforward and simple savings and retirement planning calculators, and Save & Share, a Web-based application that allows users to discuss their dreams, post their savings goals and strategies, and share them with friends on Twitter or Facebook. Fans of thedreambigsite.org can get regular updates and articles on Facebook and Twitter as well. Since the Web site’s late April launch, metrics have been closely monitored and thus far, they show that the site has been well received.
Overall, identifying, creating and implementing effective financial education tactics for Generation Y public sector employees is necessary to inspire and help them build retirement security. As an industry group, we need to monitor and continually advance our education tactics and strategies to connect and engage this constantly evolving and technology-focused demographic.
[1] MassMutual Financial Group. http://wwwrs.massmutual.com/retire/media/blueglow/blueglow3.htm
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