Most of us in labor intensive businesses would agree that one of the most challenging things we must find balance with is our people, or the human capital, in an organization. It has been said that any business problem is a people problem. That has never rung more true than now.
As Boomers are retiring rapidly, companies are seeking to backfill the positions vacated with the Gen Y population, or Millennials. They represent 25% of American workers, according to the U.S. Bureau of Labor Statistics. By 2020, that number will grow to more than 40%. The oldest members of the generation are turning 30 this year, the beginning of their most productive work years.
What is the problem? Millennials view the world differently than any previous generation before it.
Here are a few characteristics you may have noticed:
- They tend to be very socially conscious and expect their employer to be as well. I had a millennial client who recently left his management job where he made a good living, to go to work for a competitor for less money who was more in alignment with his personal beliefs and world views.
- Millennials ask a lot of questions and want to have a voice in the decision making process. They want to be working for more than the money.
- They are not afraid to make changes and can be somewhat impatient. They will make changes quickly if it serves their goals or if their employer seems disinterested in them.
- Recent studies indicate that Millennials favor smaller businesses. According to a 2012 report by Payscale, 47% of Millennials in the workforce are employed by small businesses of 100 or fewer employees and 30% for businesses of 100-500 employees. Only 23% work for larger companies and many are entrepreneurs.
Seeing how the average Millennial will have twenty jobs over their lifetime tells us we have to make some significant changes to how we hire and retain our best people. Some reports show that average turnover cost can be as high as $24,000 per person! Another thing to consider is that employers will be facing leadership gaps as the retirement of Baby Boomers continues. To develop those leaders, and retain them, companies must change their approach to hiring them. Potential employees are now interviewing companies as much, or more, than the companies are interviewing them.
Three tips to get you started:
- Get an outsider’s perspective of your current culture and identify where you need to improve and what you are already doing well. Hire someone with deep listening skills and business leadership experience for best results.
- Ask Millennials outside of your organization, and within it, what they look for and expect from an employer. If at all possible, craft your offerings around the answers you receive. For example: flexible work time, round table discussion groups, and adding value to the community (and the world) are three great places to begin.
- Don’t underestimate the importance of integrating soft skills training into your company culture. Coaching as a management style, along with encouraging authentic communication protocols, would be a great start that will resonate with the younger generation.
Annual turnover costs have been estimated at $416 billion in the U.S. With turnover at an all-time high, this is decreasing efficiencies and shrinking profits. This can cripple a business on the edge and create long term issues for those currently doing well.
It is time to decide how we will accommodate the millennial generation in our businesses and develop the future with them. This is not just an HR issue that they can “figure out.” It is a leadership issue that warrants being moved to the top of the “to do” list.
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