As we progress through the third calendar year of COVID-19, the pandemic’s far-reaching implications continue to unfold as new data and updated trends emerge for large populations and generations. These trends include financial impacts and mental and physical health concerns that may affect each generation differently.  

The pandemic has drastically impacted many people’s economic standing. COVID-19 has been credited with a legacy of increased debt, with 70% of adults holding personal debt. Over half of Americans said they took on consumer debt because of the pandemic, and 48% said it would take over a year to pay it off. As we continue to move through the pandemic, many of these Americans have been able to pay back credit card balances and recover—this trend is likely to continue as we move into the endemic phase. However, the long-reaching financial impacts go beyond debt. They include delayed start to careers, many leaving the workforce altogether, not advancing as expected and having to retire later than planned. 

Additionally, the pandemic’s effect on mental and physical health cannot be understated. While older generations face more risk of contracting the virus, nearly half of Generation Z and Millennials report mental health deterioration and relationship hardships, decreasing their psychological well-being due to COVID-19. 

Research shows that misinformation, especially related to health, can increase the presentation of mental health issues. Anxiety and depression were already on the rise before the pandemic, and stressors and isolation caused these illnesses to become even more commonplace. This increase in anxiety can lead to poor health choices, leading to people exercising less at home, exacerbating stress and developing, or poorly managing, chronic conditions. Resiliency is not a given, and many people are still struggling. 

 Employer- and employer-sponsored benefits can provide vital support, resources and education for employees. While some themes run through all generations, there are ways you can target and support each generation specifically.

Generation Z (Born 1997-2012, Aged 10-25)

Generation Z (Gen Z) is entering the workforce during a tumultuous time. Currently, 46.5% of young adults live with their parents. Many experienced canceled internships and delayed careers while facing $1.57 trillion in education debt. On top of this, Gen Z has less work experience than previous generations did at this age. In 2018, only 18% of Gen Z teens aged 15 to 17 had a job, compared to 27% of millennials in 2002 and 41% of Gen X in 1986. Combined with canceled work experiences and decreased opportunities due to the pandemic, many enter the workforce with less training and support than previous generations. 

 Already labeled the most stressed-out generation, the pandemic has furthered the toll on Gen Z’s mental health. In 2021, it was reported that nearly half of Gen Z struggle with feelings of hopelessness and that work and financial issues contribute to these feelings of stress. Therapy can be an option to help with these feelings; however, it is often seen as counter-intuitive because of the cost. Today, young Americans hold less than half of the amount of wealth the previous generations held in the 1990s, and their financial futures remain unclear. In addition, these stressors can overflow into the workplace, impacting focus, engagement, decision-making and overall motivation to work. 

 Despite being born into the digital age, 40% of Gen Z prefer returning to the physical workplace rather than remaining remote. This generation is the most eager to return to offices, as for many, this signifies their first professional job. 

 Many Gen Z employees are still eligible to be on their parent’s benefits plan. Since they are still entering the world of employee benefits, this group may need additional resources, training and guidance on benefits.  

 How Employers Can Support Employees 

• Begin with basic education on benefits and financial well-being. Explain what you offer, who is eligible, how to use them, how to transition off a parent’s plan, whom to contact with questions and where to begin. Provide reminders throughout the year on how to access benefits. 
• Explain telemedicine benefits and how they can be used for mental and physical health. Younger people are more open to using telemedicine (74%) than other generations, and it provides convenient and affordable options. 
• Provide the foundation for future financial success. Offer benefits that can boost their immediate and long-term financial health by providing benefits such as a 401(k) with employer matching contributions, student loan repayment assistance and access to financial counseling. 
• Train managers on identifying and speaking with employees about stress and anxiety.

Millennials (Born 1981-1996, Aged 26-41)

Out of all of the generations in the pandemic-era workforce, Millennials suffered the most job disruption during the pandemic. Many lost their jobs either temporarily or permanently and 30% report a cut in their pay since the start of the pandemic. Financial stress disrupts an individual’s focus and concentration both at home and work, which means employees may struggle to perform their expected duties when under large amounts of stress. 

There is seemingly a split in financial impact between younger Millennials and older Millennials. The impact of student loan debt and smaller savings resulted in the younger side of this group quickly burning through their savings, with 43% reporting that they have less saved now than they did at the start of the pandemic. Meanwhile, as a whole, the wealth of the Millennial generation more than doubled during the COVID-19. Much of this group entered the workforce during the 2008 recession and have gradually recovered, especially as they move up in their careers.  

 There are varying levels of enthusiasm when it comes to working remotely. Many report feeling less connected to coworkers and friends due to isolation and having higher levels of sleeplessness and anxiety compared to older generations. Fifty-five percent of Millennials also found it difficult to maintain a work-life balance while working from home, working more hours compared to the amount they spent at their office, and reported having more stress. Even with these statistics, nearly three-fourths of this group do not want to return to the office full-time. 

 The increase in stress could be due to many factors, including the additional responsibilities that working parents face. From online school to lack of childcare, working parents spent months of the pandemic juggling heavy workloads and keeping their children on task with schoolwork and activities throughout their day. While in-person school and childcare have mostly resumed full-time, parents still face unexpected disruptions due to childcare closures. 

 Compared to the generations before them, this group delays significant life changes, such as marriage, having children, undergoing medical procedures or making a career move, and the pandemic seems to have delayed these decisions even further.  

How Employers Can Support Employees 

• Financial worry is at the forefront for many employees. Assist employees in prioritizing and understanding their finances. Clearly show what impacts their take-home pay, demonstrate how and why they should re-direct earnings toward meaningful benefits and provide tools that let them confidently make financial decisions. 
• Support their mental health and childcare needs by decreasing costs for mental health support, adding mental health or well-being apps to your benefit plan, providing childcare assistance and reminding employees of any resources for mental health or childcare through your Employee Assistance Program (EAP). 
• Show employees how benefits work meaningfully in their lives. Giving real-life scenarios of how your benefits directly work for them allows them to see their value. Provide examples of how the Family and Medical Leave Act (FMLA) works with short-term disability, how and when they can use leave, tax implications of different planning methods for retirement or the ins and outs of starting a family. 

Generation X (Born 1965-1980, Aged 42-57)

Financial woes have burdened Generation X (Gen X). In 2019, 65% of respondents within this age group were stressed about finances, with 60% carrying credit card debt. Of those with a credit card balance, 40% struggled to make minimum monthly payments, and one-third of them indicated that financial stress distracted them enough at work to impact their productivity. To add to this, nearly a quarter of this generation saw a decrease in their income by 50% or more in 2020.  

 While they have recovered over the past few years, Gen Xers find themselves in a strange predicament – they are now the generation making some of the highest salaries while also dealing with the highest rates of debt. They are facing increasing levels of mental and financial stress from raising children while also caring for aging relatives.  

 Only a tenth of this group reported that they saved more than they spent throughout the pandemic, and half of Gen X are worried they will not have enough saved for their retirement. 

 How Employers Can Support Employees 

• Start a savings program that helps employees build or increase their emergency fund. This generation finds themselves in a crucial time period to build wealth before retirement. 
• Assist with caregiving for both children and aging relatives. For employees who care for aging relatives provide resources or services to ease the process. This will help minimize related stress. 
• Highlight the financial benefit of telemedicine, especially when faced with an urgent care need. 
• Go back to the basics of benefits education. Provide insights on benefits terms, how to use different benefits, examples of how they can be implemented in their lives and who to contact with questions.
• Remind employees of the convenience and affordability of telemedicine for their families. 

Baby Boomers (Born 1945-1965, Aged 57-77) 

A noticeable impact on Baby Boomers is their age and rate of retirement. The retirement rate rose faster from 2019 to 2020 than in previous years. As of the end of 2021, 50% of U.S. adults aged 55 and over have retired. It is speculated that some exited the workforce to avoid working through the pandemic, as they are the demographic most susceptible to health complications from COVID-19. Others decided on early retirement due to layoffs.  

 However, a recent report states that 79% of Baby Boomers would prefer to semi-retire rather than fully retire, with over half pointing to unsustainable savings as their reason. The average Baby Boomer only saved $152,000 for retirement, and early retirement or slashed retirement funds could significantly draw down pensions and retirement plans.  

 Largely, the COVID-19 pandemic has imposed the most negligible financial impact on this generation. Only 16% claim that COVID-19 significantly impacted their financial security. Those from this generation that are still working are the most excited to return to the office, preferring it much more than working remotely.  

 How Employers Support Employees 

• Set up resources for financial planning and retirement planning. 
• For employees staying in the workforce, provide education on the transition to Medicare and social security. 
• Encourage telemedicine for checkups, prescription renewal, chronic disease management, surgery and in-patient follow-ups. They should also be encouraged to minimize their risk of COVID-19. 

How We Can Help 

Brown & Brown strives to provide your employees with premium benefits, while supporting your financial costs. Our teams can provide a multi-faceted approach that includes strategic plan design, holistic employee communication plans, innovation strategies, connecting you with resources in all areas of employee benefits, deploying best practices by industry and providing deep data analytics.  

Connect with us to see how we can help you deliver an employee benefits plan to help meet the unique needs of each generation.

Employee Benefits Team