The Millennial Workforce – A New Corporate Reality!
Updated: Jul 26, 2019
The world has now gotten used to Millennials. The jokes and ribbing have ebbed somewhat and the world has come to recognize that as a generation, they are probably the most dominant generation in the workforce. According to the department of Labor, they will be the most dominant segment of the population in the workforce. With immigration adding more numbers to this group than any other, the Millennial population is projected to peak in 2036 at 76.2 million.
Thereafter, the oldest Millennial will be at least 56 years of age and mortality is projected to outweigh net immigration. According to Pew Research, by 2050 there will be a projected 74.3 million Millennials.
For the first time ever in history, there are 5 generations in the workplace, creating a huge shift in our economy and how organizations must function[i]. This shift has created both some organizational angst as managers attempt to manage organizations based on new generational norms as well as individuals seeking to figure out how to align their personal values with organizational needs as well as to meet the needs of the organization as a functional manager able to manage multiple generations.
It therefore becomes necessary to define these generations in the workforce and what they desire from organizations and their managers and then a discussion can be had as to how to align all of these various individual needs with the needs of the organization. It is important to note that having 5 generations in the workforce has created a stagnation and lack of movement that has been hereto unseen.
Up until the 1980s, most people retired by the age of 65. Those retiring were the denizens of industry and so that allowed a natural movement of mid and upper level managers into senior and C level positions in corporations. With the crash of the market in 2008, many saw their nest eggs depleted and many others were now unable to retire, as such there are many Seniors and Traditionalists in their late 60s and 70s who are still working. So if persons in the 60s and 70s are not retiring and still maintaining C level and upper level management positions, this then means than Gen Xers and Millennials are now unable to rise to higher ranks thus creating a stagnation in many organizations. Organizations must now wrestle with how they will continue to energize their employees while also keeping abreast of the constant changes in the marketplace.
The Reality of Millennials and the Job Market
For many years, Millennials have gotten a very bad rap and been labelled as entitled, lazy and narcissistic. However, what we do know is that they are the most educated generation in history. More than 50% of Millennials have a Bachelor’s degree or higher. The natural assumption is that with education comes an elevation in the standard of living. The entire basis of the achieving the American dream is being able to elevate oneself though education and hard work. However, the issue of give generations in the workforce has put a huge crimp in that particular pattern. So now Millennials while the most educated generation is also the most indebted. As a group, they have more than a trillion dollars in student loan debt with each person averaging approximately $35,000 in student loan debt and 40% of millennials believe they cannot pay this off for at least 10 years making them between 35 and 39 before this debt is paid.
The even larger issue that is not often discussed is the earning potential of Millennials. The current 4% unemployment rate is very deceptive because while people are working, many Millennials are working multiple jobs in order to make a living wage and many are not.
So it’s not that Millennials are lazy and do not want to move out of their parents basements, they are often unable to because they simply don’t have the earning potential. They cannot step into entry level supervisory jobs because those jobs are occupied by older Millennials and Gen Xers unable to rise to higher levels because Boomers and Seniors are still actively working. This is a very sad commentary on society because if Millennials are unable to earn enough money to sustain themselves, then this ultimately affects the housing market because they can’t afford homes. What is happening more and more is that Millennials will live together to cut the cost of living, but not participate in the other trappings such as marriage and having children because they cannot afford the expense.
So any judgment of Millennials and who they are and how they functions must be balanced against these two key facts: Their level of education and their ability to be paid for that education. The net result, therefore is that Millennials seem to job hop. It appears from the outside that they do not stay with any job long enough for the employer to get their ROI from the training. More than 60% of Millennials expect to leave their jobs within the next two years. 39.2% expect to leave if they are offered a better job while 37.3% will leave for career growth opportunities. So employers are forced to grapple with this reality that if they hire someone, that person will most likely leave right around the time they’ve become an expert in and perfected the role.
With only 11% of Millennials expecting to stay in their employment for between 5 to 10 years, many organizations have now begun to shy away from hiring Millennials for jobs which are viewed as needing someone for the long term and this has invariably led to a skills gap in many organizations.
Here is what employers are saying as to why they have a skills gap:
· 56% of employers say they can find no good match
· 48% state employees don’t have the skills and employers aren’t doing OJT
· 41% say there are too few qualified candidates
· 35% there is no official commitment to training/OJT
In 2015, Manufacturing today estimated that every manufacturing job creates another 2.5 jobs in the goods and services area. There was an estimated 3.5 million new jobs that would be created with an estimated 2 million unfilled jobs. This is unprecedented. How many of these unfilled jobs could become higher paying jobs that Millennials would be able to take and fill. It becomes necessary for organizations to determine if they need to change their model in order to meet the new evolution in the workforce.
Aligning Millennials to Organizational Needs
In my research as well as my experience in discussing what employers are looking for from graduates, there seems to be a stark difference between what Millennial employers are looking for and what those hiring them are seeking. So what are the top things Millennials are seeking in their next employer? Depending on what articles you read, there is always some disparity in where these times rank; but these are invariably the top things Millennials are looking for:
· The opportunity for training and development that will lead to growth.
· Flexible work schedules including the ability to be virtual if possible
· A good culture fit between themselves and the organization
· A good manager who provides regular and robust feedback
· Ability to have a good work/life balance
· Compensation commensurate with what they believe they are worth to the organization (this may not always align with the organizational beliefs)
Now conversely, here is what most employers are looking for in their employees be they Millennial or not. Employees who have:
· Strong Leadership Skills
· Ability to work as part of a team
· Strong oral and verbal communication skills
· Strong critical thinking skills for taking the initiative, decision making and problem solving
· A good work ethic (which often translates to fitting into whatever the current ethic is of the organization such as long work hours, etc)
· Strong technical skills (in the area in which the organization specializes)
· Strong digital literacy skills
· Professionalism (which is often very specific to an organization or even sometimes to a specific manager)
Now while there may appear to be a disparity between what Millennial wants and what organizations seek, what is actually key to note is that there are actually not that many dissimilarities between what ALL the generations are seeking. The graphic indicates that most persons actually want the same things, organizations just need to be savvy about how to meet the needs of each individual in a way that’s personal to them. Organizations have long been focused on the needs of the organization. With the advent of the technology era and the rise of companies like Facebook and Amazon that are largely built on ensuring consumer satisfaction and giving the consumer what they want, many organizations are realizing that they may need to change their approach to some of most important customers: their employees.
For organizations to position themselves are employers of choice for Millennials so that Millennials will stay longer and employers can get a better ROI from them, these are the key things that employers should employ as part of their Employee retention and satisfaction strategies
· Regular & consistent feedback
· Mentorship/Training to advancement
· Show a path for success
· Using Technology for collaboration and efficiency
· Allow Flex time for work life balance in roles that allow
· Offer to help pay off student loans as an alternate to 401Ks or other options
Regular and Consistent Feedback – Most Millennials want to know how they are doing. Twenty years ago, feedback was not a routine part of employee management. Staff were either reprimanded for doing something wrong and/or given either an annual review. Millennials need more routine feedback and this can be done weekly, monthly or quarterly; but there should be a clearly established schedule of feedback. According to HBR.org 50% of Millennials would prefer monthly feedback; 30% prefer quarterly and only 10% prefer weekly.
Mentorship/Training to Advancement/show a Path for Success – Millennials are looking to learn and to grow. If there are no opportunities for this in an organization, then we know that 37.3% of them will leave. As such as part of the routine feedback, it should be clear how what they are doing and how their performance will lead to overall organization learning and thus growth within the organization. If this growth is also commensurate with salaries, then this is also an additional incentive. It’s important to note that Millennials much like Gen X need to be challenged and given opportunities to grow.
Both generations do not like to be bored in their tasks and so managers should be aware of this and build in those opportunities. The only difference is that Gen X does not prefer mentorship; they accept it if it is offered. Millennials prefer to be mentored.
Using Technology for collaboration and efficiency – Millennials like and are very comfortable with technology. They spend 18 hours a day connection to their media. More than 60% of them would much rather use technology for collaboration than to have meetings. As clouds and remote technology have become more popular, this has given rise to a number of applications and software applications that can help companies keep in touch, give feedback and track work projects more effectively. Some of these technologies are: Chat/Message; File Sharing; Intranets, Discussion Forums; Video Chats; Podcasts; Document Management, Activity feeds and Notice boards. These are extremely effective tools, especially if used to overcome a local skills gap or to keep an experienced staff member who may be relocating, needs a flexible schedule or prefers to work remotely.
Allowing Flexible Schedules to facilitate a better work life balance - 75% of Millennials would prefer to have a flexible schedule. And with regards to increasing productivity, 77% of Millennials believe a flexible schedule will accomplish that; 39% say remote working will accomplish that and 23% say less meetings will accomplish that. So pairing flexible schedules and more technology could result in a greater level of organizational productivity along with closing a skills gap in a given area. The counter argument to this has always been that some jobs require employees to work a set schedule and to also be on site. This is a very valid argument and needs to be taken into consideration. However for jobs that don’t have a set time, organizations should take advantage of the fact that Millennials are wired and always on. As such it is not uncommon for them to work longer hours because their emails and apps are on their phones and tablets and so they work even long after they’ve put in the regular 8 hour day. In fact 47% of Millennials say they now work longer hours than in the last 5 years. So this is an advantage for organizations.
Compensation – the ability for a company to compensate its staff is always something that organizations wrestle with. Once organizations understand that Millennials are seeking to be decently compensated for their education and skills, then the organization needs to determine how attractive can they make themselves to the Millennial to attain the longevity that is desired in a given role. No company should expect a Millennial to dedicate their life to an organization. That is unlikely to happen. Instead organizations should be realistic about a given job role and what is needed to that the cost of employment for the company is reasonable. The compensation standards have always been (a) Salary (b) Bonuses (c) Insurance – Health and Life (d) Stocks and Investments (e) Retirement. These are all still very valid parts of the compensation package and should be tailored to meet the needs of the employee. However, there is now one more perk that many Millennials are happy to see within companies – helping Millennials to pay back their student loans. Companies like Graadifi partner with companies to help students both pay down their student loans as well as save for the future.
So Millennials are not the evil horrors that many make them out to be. They have some of the same desires that Gen Xers and Baby Boomers want. All 3 groups desire to have a positive impact on the organization, work with a diverse group of people, work with an organization that is an industry leader and work on social and environmental challenges. Millennials just differ in ‘how’ they want to do these things. The key is for the organization to be able to meet the needs of all the generations within their organization.
Allowing for flexible work schedules allows organizations to have staff working in different time zones, on different schedules which undoubtedly could lead to a greater level of productivity. Allowing for remote employment and the use of technology can decrease an organizational skills gap by having qualified staff who work remotely and not losing that staff member if they relocate. Using effective feedback and motivational tools will also create a more engaged employee. Forty percent of Millennials who engage regularly with their managers are engaged in the organization; and engagement leads to productivity.
It is important to be cognizant of the new reality of Millennials. They are highly educated; but have a large amount of education debt and like everyone else, they are seeking a way to pay that debt in order to increase their discretionary income. This means that they will always be on the lookout for a job and or opportunity that will not only pay them more but also enhance and improve on their current skills, teach them new skills and allow them to create a path to their own professional success.
Millennials want to be mentored so that they can learn how to be successful not just within your organization; but successful on a whole. Over 60% of Millennials would like to own their own business and so they are looking at the skills and mentorship they receive as part on ongoing learning and education. Part of this mentorship would be regular and consistent feedback reinforcing for them that they are learning, are contributing meaningfully to the organization and also to provide personal validation.
Finally, if an organization is one with a strong sense of Social and Corporate responsibility, then this is an added bonus. Over 74% of Millennials either contribute to charitable organizations or participate in charitable work. As a generation, they are very concerned with social and environmental issues and like to be aligned to companies and organizations that have a positive impact on those areas.