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What entrepreneurs need to know about how to recruit and retain the young generation of employees
With the lowest unemployment rate in decades, the competition for talent is fierce. To recruit top candidates, companies are thinking hard about what employees want, and increasingly that means what millennials want.
At 80 million strong, millennials are now the largest generation in the workforce, surpassing retiring baby boomers and older gen X-ers. They now comprise about half of all U.S. workers, and it's estimated that by 2030, they will be 75% of the workforce.
“There is strong competition for good labor and with millennials as the backbone of this workforce, they don't feel tied to one employer like the old days,” says Richard Kollauf, Vice President and Director, Business Advisory and Estate Planning with BMO Wealth Management. “Therefore, pay alone is too singular to attract and retain the best and the brightest.”
“Millennials are constantly looking for new challenges and opportunities,” says Nicholas Chiricosta, Senior Wealth Planning Consultant with BMO Wealth Management. “Millennials want to feel empowered and are often looking for a workplace where they feel they are working for something greater than themselves.”
Need to be heard
Whereas previous generations subscribed to the notion of paying their dues and eventually working their way into positions of influence, millennials expect to have a voice much earlier. And why not?
Not only are millennials the single largest generation of workers, they're also the single largest generation of consumers. Companies that want to understand their views can gain insights by listening to their own employees.
Some employers may bristle at giving a voice to these youngsters. Others, embrace it and see the value of everyone's contribution. In this world, flatter hierarchies can thrive, while strict, top-down cultures may struggle.
Work can be done whenever, wherever
In a pre-mobile world, it made sense to have everyone in a particular location at a particular time. Being off-site is no longer a deterrent to collaboration. Today's technology tools make it possible to work anytime, anywhere. They even increase a company's ability to work across geographies and time zones.
That hasn't escaped the notice of millennials and they want employers to use those tools to create a better work-life balance than their baby boomer parents had. A top priority for them is a flexible remote work policy, generous family leave and plenty of vacation time to recharge.
“Face time in the office is less important, less efficient and in many cases, is a detractor for millennials,” says Chiricosta. “Companies should recognize this and transform office space to more collaborative/functional workspaces that are inviting and less restrictive than the confines of the traditional office setting.”
To make the most of this trend, companies can reserve a few conference spaces for occasional meetings and work sessions, with the bulk of work being done remotely. In the process, businesses can reduce their real estate footprint, instead redirecting those resources toward technology investment and talent acquisition.
More than a paycheck
There's a reason why millennials are dubbed the “Giving Generation.” They want to make an impact—but they want it integrated with other aspects of their lives. That means, the workplace must be a reflection of their values in a significant way.
In fact, surveys show that when seeking out job opportunities, this generation emphasizes work that aligns with their values. In one survey, an overwhelming number of millennial respondents said they would be willing to take a pay cut for the opportunity to work at a company whose mission they believe in. What's more, a significant number of respondents said they would leave a job if their boss asked them to do something in conflict with their morals.
“Many millennials want to change the world and creating those values into the job structure will go a long way,” says Kollauf.
Today, perks like free food or the iconic ping pong table may not resonate as much as a company that makes giving back a priority. For example, the accounting firm EY held a volunteering day for its 23,000 employees in which the firm participated in 940 volunteer projects with 650 organizations around the world.
Build technology for digital natives
The generation that learned to code in grade school and post the details of every meal to Instagram, expects a seamless technology experience. They rely on technology to perform their jobs and businesses that don't provide it may not be seen as desirable employers.
“Communication and customer interaction is carried out primarily through email, text and social media,” says Chiricosta. “While this may seem anti-social and less personal than the way previous generations did things, this is what the millennial generation has become accustomed to and is comfortable with.”
Human resource departments should consider technology like webinars, video meetings and email to educate workers about company benefits.
In addition, technology can also be leveraged to help millennials learn and sharpen their skills with certification programs that make use of video, audio training and quizzes. These programs can help firms retain valuable employees by showing them that they can gain professional development opportunities.
Help with finances
Though they hold some idealistic views about their careers, millennials also happen to suffer a number of financial stresses. As a group, they hold significant amounts of student debt, struggle to purchase homes in overheated real estate markets and have low rates of savings. They need help shoring up their finances and many are looking to their employers for that.
“By providing alternatives to signing bonuses like paying down student loans or offering loan options for first-time homebuyers, employers can help millennials while helping themselves,” Kollauf suggests.
A number of companies such as Nvidia, PwC and Penguin Random House are helping their young workers deal with their student loan burden by offering a student loan repayment benefit. And a growing number of companies are establishing financial wellness programs, understanding that employees have difficulty staying focused on their work if they are experiencing financial stress.
While profitability and the bottom line can’t be ignored, employers must also pay attention to what drives the millennial workforce. Like all generations, these young employees want a fair wage for their work. But they’re also motivated by purpose and passion. Employers who commit themselves to creating a workplace where millennials can do their best work, have flexibility to deal with pressing life issues and have their voices heard will be able to attract—and keep—the best and the brightest.
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