The Gen Z engagement context
About this toolkit / Module 1 - The Gen Z engagement context
Many workplace retirement and savings plans were designed around traditional assumptions:
Many younger employees understand that saving is important.
The challenge is that workplace retirement and savings plans can feel disconnected from their immediate priorities, financial realities and concerns about the future. When saving feels disconnected from what matters today, people are less likely to act.
This means engagement challenges are often driven more by relevance than awareness. The real question is whether employees see workplace savings as meaningful, practical and useful in their lives today – not just whether they understand the benefits of saving.
They entered the workforce during uncertainty
- Youth unemployment sits at 14%
- Entry‑level jobs are down 29%Opens a new website in a new windowOpens a new website in a new window
- Only 45% currently hold a single full-time role
- Workers change roles every 1.1 years on average
Gen Z is starting their careers among global economic, climate and geopolitical uncertainty. They’re bombarded with negative messaging and are more focused on potential dangers than on long-term planning. The risks feel real, immediate and overwhelming. Compared to other generations, they’re:
70% more likely to think and 140% more likely to talk about the end of humanity several times a week
They don’t make decisions that hinge on the future of the world being predictable.
4.4% lower probability of setting up automatic contributions toward long-term savings for each additional hour spent doomscrolling daily
They’re feeling anxious or overwhelmed and they’re focusing on immediate concerns and avoiding long-term planning, even if planning would help them. When people feel the future is unstable, they naturally discount it more heavily.
4 percentage point decrease in the likelihood of holding long-term savings products from thinking about the end of the world
Our research showed Gen Z’s savings behaviours are the result of several contributing factors:
Gen Z is saving, but they’re also accessing their savings differently.
According to our internal data, Gen Zs withdraw from RRSPs
12% more than Gen Y at the same age
42% more than Gen X at the same age
If Gen Zs aren’t saving for their retirement, this lower early-life investing has long-term consequences including:
- Limiting compounding and capital growth
- Greater reliance on public assistance
- Reduced spending power in retirement
- Delayed retirement
If Gen Zs continue to under-save, the risk for employers isn’t just a future retirement issue – it’s a broader workforce well-being and productivity issue.
Here’s how it could show up in your workplace:
Fewer savings = more financial stress and reduced productivity
Financial stress consistently ranks as the top source of stress for Canadians – and that stress comes to work. This can impact productivity and engagement on the job.
Increased disability risk and cost
Our research shows that mental illness accounts for approximately 30% of short- and long-term disability claims but represents about 70% of workplace disability costs. Financial stress – including from a lack of savings – might contribute to the mental health challenges that could lead an employee to take a mental health disability leave.
Reduced savings isn’t solely a retirement issue. It’s also a workforce wellness issue. Employees with stronger financial foundations tend to experience less stress, better mental health and greater resilience. These are outcomes that benefit the entire company’s workforce – employees and employers – through improved productivity, attendance and engagement.
Given Gen Z’s high turnover rate – with workers spending an average of just 1.1 years with an employer – and the fact that only 45% hold a single full-time role, many have limited opportunities to fully benefit from employer-sponsored savings programs. Short tenures can:
- Reduce eligibility for workplace plans
- Limit the time available to build meaningful balances
- Increase the likelihood of withdrawing savings when changing jobs
Put together, these factors can create a significant risk of retirement savings shortfalls over time.
All of this makes employer programs an essential part of supporting Gen Z’s financial security.
The combination of size, instability and mobility we see in Gen Z makes them a critical demographic for employers who are looking to support financial resilience, improve retention and modernize plan offerings.
While there are obvious challenges, there’s an equally big opportunity.
Younger employees aren’t disengaged. They’re looking for answers. They want clear, honest acknowledgment of their reality and small, achievable steps that help them feel more in control. They’re looking for practical ways to make progress in a world that feels increasingly uncertain.
Using research, we’ve identified the critical psychological insights for addressing this solvable problem.
Before you start, you need to understand where your organization currently stands to determine what tactics will work best for you.
Next module:
Assess your current state
This publication provides general information applicable to group benefit plans and is based on information available at the time of publication, which is subject to change.