Benefits are evolving to better address the financial realities Gen Z faces

Written in collaboration with The Business Journal.

 

A new class of college graduates is entering the workforce with more than a résumé in hand. Many are starting their careers with student loan debt and limited savings while also managing the cost of rising rent, grocery bills, gas and other everyday essentials.

 

Financial stability is a priority for young job seekers who are increasingly focused on whether starting salaries can keep up with living expenses.

 

Nearly half of Gen Z cite the high cost of living as a barrier to financial success, while 35% point to insufficient income, according to the Bank of America 2026 Better Money Habits Gen Z Report.¹ Among those ages 23 to 29, nearly six in 10 say debt is one of their biggest challenges.

 

While balancing these demands, many Gen Z workers are also preparing for the future by building emergency savings, paying down debt and thinking ahead about retirement.

 

For employers competing for early-career talent, what makes a job offer competitive is changing. Salary remains important, but younger candidates are also asking whether an employer can help them manage the financial demands of early adulthood.

 

“Gen Z is facing financial pressures that are distinctly different from their older counterparts”, said Stacy Bucchere, Managing Director, Workplace Benefits at Bank of America. 

 

 

As Gen Z becomes a larger share of the workforce, employers are rethinking what attracts these candidates.

 

Office games, lounge spaces and other trend-driven perks may be nice-to-have additions, but they don’t solve the financial pressures many young employees are bringing to work.

 

A recent Bank of America Workplace Benefits Report² shows that 85% of employees have debt, including nearly nine in 10 Gen Z and millennial workers. For younger employees, that can mean balancing student loan payments, credit card debt, emergency savings goals and retirement planning early in their careers.

 

“Younger employees are looking for workplaces that meet them where they are — not just with a salary, but with real support for the challenges they're navigating right now”, Bucchere said.

 

In response, many employers are expanding support beyond traditional benefits like health coverage and retirement plans to include financial education, debt management tools, emergency savings support and wellness reimbursements.

 

“Benefits that help employees cut down on the costs and stresses of daily life provide the opportunity for these employees to bring their best selves to work”, Bucchere added.

 

 

A benefits package only helps if employees know it’s available and understand how to use it. That is especially true for Gen Z workers, who are often learning about retirement plans, health savings accounts (HSA) or financial wellness tools for the first time.

 

Young employees are asked to make important financial decisions early in their careers, like how much to contribute to a 401(k) plan or whether to pay down debt first. These choices can affect their financial future for years to come, yet many make them without much guidance.

 

That uncertainty shows up in how few participate in retirement planning. Only about 22% of Gen Z contribute to a 401(k) plan, according to the 2026 Better Money Habits Gen Z Report.¹ Among the youngest workers, ages 18 to 22, participation drops to just 10%, before rising to 33% by the late twenties as income and familiarity increase.

 

“The first step is to offer consistent and clear communication about your benefits offerings, so employees know what’s available to them and understand their value”, Bucchere explained.

 

Tools like automatic enrollment and automatic contribution increases can make saving easier by removing the guesswork for employees who may not know how much to contribute or how to get started.

 

For employees with student loan debt, however, building long-term financial wellness can be more complicated. According to a recent Workplace Benefits Report², one in four employees has student loan debt, and the number of employees who want their employer’s help paying it down has nearly tripled over the past two years.

 

In response, more companies are adding student debt support to their benefits packages. The SECURE 2.0 Act also gives employers another way to address that challenge by allowing matching retirement contributions based on qualified student loan payments, helping employees reduce debt while continuing to save for retirement.

 

Taken together, these patterns indicate an opportunity for employers: benefits programs are more valuable when they’re easy to understand and enroll in, and when they’re directly tied to employees’ goals.

 

 

To stay competitive, employers need to keep their benefits strategies aligned with the evolving needs of younger workers. The number of employees seeking help with near-term financial needs² has doubled since 2023, showing that financial wellness resources are no longer a rare perk, but a growing need.

 

“The external environment moves quickly, and needs can change on a dime,” Bucchere said. “Getting real-world feedback from employees on what they need most is the only way to ensure employers are offering benefits that will retain and attract talent.”

 

Younger workers are not only seeking employment. They’re looking for employers that understand both the financial pressure they are under now and the long-term goals they are working toward.

 

When employees feel that kind of support, they’re more likely to engage, stay and grow with a company.

 

With Bank of America Workplace Benefits®, your employees have access to the benefits and solutions they need — no matter where they are on their financial journey. Learn more about how to elevate your benefits program.³

 

Written in partnership with The Business Journals, by Sydney Wiederhold, Writer, TBJ Content Studio.

 

The views and opinions expressed are those of the writer, are subject to change without notice at any time, and may differ from views expressed by Merrill or other divisions of Bank of America. These materials are provided for informational purposes only and should not be used or construed as a recommendation of any service, security or sector.