Why Gen-Z and Millennial Money Anxiety Is Quietly Ruining Office Productivity

Key Summary

• A staggering majority of Americans—over 200 million people—report experiencing financial strain, with recent data revealing that only a small fraction of the population feels truly financially fulfilled.
• Age serves as the primary predictor of this economic anxiety; while older generations maintain higher levels of stability, a massive 95 percent of Gen-Z workers report feeling stressed about their financial standing.
• Because chronic financial worry significantly degrades both physical and mental well-being, employers should proactively consider the role of compensation in employee performance and recognize that younger staff may be disproportionately affected by these pressures.

Money woes are tanking motivation for millions of Americans who feel stuck with poor pay — and a new report shows younger workers are bearing the brunt.

In a tempestuous job market and when financial trends are unreliable, it makes sense that workers focus on the benefits of their current jobs — even if that means “hugging” onto roles that’re less than ideal. In such times it’s also natural for workers to worry about how much they’re paid. But a new report suggests that financial anxiety may be affecting younger workers much more than expected. Millions of workers may be stressing about money, and the psychological impact of these woes may even be affecting their work. It’s something savvy employers might think about as salary review time rolls around.

Data suggests that only around a sixth of Americans are feeling “financially fulfilled” right now. This means the greater majority, equating to over 200 million people, are undergoing “financial stress, strain, or uncertainty.” The study, from Missouri-based investment advice giant Edward Jones and polling expert Gallup, shows that this stressed share breaks down into 51% of people feeling stable in some areas and vulnerable in others, and 16 percent who feel almost constant pressure. 

The report notes that while feeling financially fulfilled “varies by gender, marital status, race and ethnicity” the analysis shows it’s “still predominantly explained by age and household income.” The data show just how differently the age groups feel about money: while 31 percent of Boomer age respondents said they felt financially stable, just 14 percent of Gen-X feel the same. Things get even worse for the two youngest generations in the workplace, with only 10 percent of Millennials saying they’re stable, and a mere five percent of Gen-Z. That means over nine in ten Gen-Z workers feel like they’re financially stressed on a passing or permanent basis. 

Feeling financially stressed is, we all know, an unpleasant sensation. The new report reminds us that it actually affects wellbeing and other aspects of life. For example, while 52 percent of people who say they’re financially fulfilled say their physical health is very good or excellent, just 30 percent of people who’re financially “conflicted” agree, and a mere 13 percent of people who are financially stressed feel this well. When it comes to mental health a similar, but much more polarized trend exists: 74 percent of people in the fulfilled category say they’re mental health is very good or better, compared to just 43 percent of people in the conflicted category and 13 percent in the stressed category.

The impact of feeling financially stable, on the other hand, leads to greater confidence and also to “meaningful differences in how people experience their lives and in what they are able to give back,” the report notes.

Digesting this news leads to two clear conclusions. First, that more people are experiencing financial stress than you may expect — which means that many employees will be in this state. 

Second, younger generations are more acutely affected by this stress. The new report points out that in some ways this isn’t unexpected, as older people have “had more time to build savings, recover from setbacks and establish financial direction.” The data also supports the narrative that there’s a strange generational flow of money right now, with aging Boomer generation retirees holding on to their accumulated wealth and properties longer than has been the case before, adding extra stress on the youngest generations. 

The Implications for Your Company

Though some managers try to follow a leadership style that asks workers to “leave their private lives at the door,” that’s not really a tenable position. It’s even less favored by workers from Gen-Z, who think very differently about workplace norms. Inevitably, the link between financial stress and mental and physical health dips will mean people bring these stresses into the workplace and they may underperform as a result. 

Come performance review time, it may be worth remembering that your workers could be suffering financial stress, particularly if they’re younger. Gen-Z is known for believing they’re due somewhat fantastical pay rates — but that doesn’t mean their struggles aren’t real, or that, even if they’re being paid well, they aren’t worried more about money than their older colleagues. These facts may also play into your recruitment efforts.

Lastly, if your business involves selling to younger generations, their higher sensitivity to financial stress means you may have to modify your sales pitches dramatically. 

Connect with an Old National Small Business Banker for more insights to help your business grow.

This article was written by Kit Eaton from Inc. and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.