Generations Y and Z will become the largest living generations in 2019, having already have surpassed Generation X in the workplace, and by next year will represent half of all workers globally. With so many working for you, understanding what makes them tick – and stick with you – is essential to attracting and retaining the best available talent to support your business goals.
You’ve got your work cut out for you: the younger generations don’t have a very high opinion of business. The 2019 Deloitte Global Millennial Survey found a decreasing percentage of Gen Y – 55% in 2019 versus 61% in 2018 — believe business has a positive impact on society and that 67% of businesses “have no ambition beyond wanting to make money.” That’s important because Generations Y and Z often put purpose before their paycheck.
But despite their reputation as job hoppers, Generations Y and Z are slightly less likely to leave a job after a short time than Generation X. In 2018 about 50% of Gen Y reported working for their current employer for at least five years, and 80% said they had stayed at their job at least 13 months.
Jobvite noted a 20% drop in workers who say they change jobs every one to three years (16% in 2018 versus 20% in 2017). However, despite job satisfaction at 68%, workers say they’re still open to other opportunities. With unemployment at record lows, these workers have more possibilities if they choose to leave.
What’s driving them away? Gallup’s 2017 “State of the American Workforce” report noted 91% of the thousands surveyed said they left their last job because there wasn’t a compelling reason to stay. And Deloitte found that almost half would quit their current job within two years if they had a choice.
It’s well past the time to rethink your recruiting, hiring, and retention practices to keep Generations Y and Z in your workforce.
In this post, we will discuss the state of employment in 2019 as well as what the younger generations believe is important at work, what Gen Y and Gen Z don’t value at work, and strategies to keep these employees working for you. We’ll cover:
What’s not important to Millennials at work:
- Perks such as free food and games
- Certain benefits, such as 401(k), are less important
- Being told the company holds their values – without backing it up with action
- Maintaining the status quo
What’s important to Millennials at work:
- Company values and transparency
- Work-life balance, including flexible work hours, working from home
- Diverse and inclusive culture
- A variety of benefits
Strategies to keep Millennials working for your organization:
- Create a company culture with their input
- Develop their talent
What’s not important to Gen Y and Gen Z at work
Pointless Work Perks
The startup and tech culture of the West Coast perpetuated the idea that free cereal bars and fancy coffee machines in the breakroom, foosball and ping pong tables in the hallways, and artsy open concept office spaces were all that was needed to attract and retain workers. This is not so. Gen Y and X employees know that perks like these don’t equal benefits – or say much about the true nature of a company’s culture.
If your recruiting materials and HR discuss a company culture that embraces diversity and inclusion, but leadership at all levels doesn’t support those ideals, Gen Y and X will figure that out quickly – and they don’t appreciate these inconsistencies. In fact, about two-thirds of those surveyed by Deloitte said business leaders only give lip service to diversity and inclusion in the workplace.
The younger generation saves for retirement and wants you to contribute to their 401(k). However, this cash-strapped generation saddled with student debt also emphasizes other financial benefits available to them now and emphasize financial wellness such as access to financial education platforms, budgeting tools, and financial coaches.
A “this is the way we’ve always done it” philosophy perpetuated by managers and staff resistant to change will turn off younger employees. They want to be heard, and have their suggestions taken seriously. They have spent their lives adapting to ever-changing technologies and expect to use technology to enhance work productivity.
What is important to Gen Y and Gen X at work
How they spend their time, who they work for, and what they do is often more important to Gen Y and X than earning a big paycheck. These generations do not only expect their employers to strive for financial success, but also want the organization to make a positive impact on the world. Working for an organization that supports charitable causes and gives back is also important to 75% of job seekers.
They’ll also expect you to maintain transparency by communicating about finances and leadership. Generations Y and X want to learn about challenges and mistakes made by their organization from leadership, not the rumor mill.
Flexible schedules and work-from-home options are no longer benefits offered to favorite employees. Employees from the younger generations understand that technology makes it easy for them to work remotely and they don’t want to commute to the office every day. They expect you to treat them as adults and understand they will be productive from home and outside of the traditional 9 to 5 working hours. This isn’t a new concept: the 2015 AfterCollege Career Insight Survey noted 68% of Gen Y wanted the option to work remotely.
The United States isn’t exactly known for work/life balance: employees are expected to work long hours, take work home, and skip vacations. But the AfterCollege survey noted that 68.78% of entry-level job seekers value work/life balance more than any other factor after salary. A flexible work schedule was No. 4 on the list, with 53.8% noting flexibility as an essential factor.
Diverse and Inclusive Culture
It won’t take employees from Gen Y and X long to learn whether you back up your diversity and inclusion policies with real action. They will review your leadership – C-suite and corporate board – for diversity of race, ethnicity, age, gender identity, and more. In the era of the Me Too Movement, these employees won’t settle for an organization that’s mostly-male with a top-down management style.
Don’t be mistaken, a focus on values and flexible work schedules does not mean Gen Y and X are willing to forego traditional benefits. Gen Y and X are more cash-strapped than previous generations because of student loan debt, and many entered the workforce during the Great Recession. In addition to flexible work schedules, traditional and non-traditional benefits that are important to Millennials include:
- Financial wellness and literacy programs
- Student loan repayment assistance
- Unlimited PTO plans
- Opportunities for advancement
- Health and wellness benefits
What you can do to keep Gen Y and Gen X working for you
Gen Y and X want to work for companies that understand and support their values and understand their differences and the challenges they face. Generally speaking, generations Y and X are better educated than previous generations – and a higher percentage of women have degrees than men. But they also have more student debt. They are more racially and ethnically diverse. Many delay marriages and creating a home longer, often living with their parents. More would rather travel and experience the world than buy a home. And they’re delaying parenthood.
Diversity and Inclusion
There is a correlation between Gen Y and Xers who want to stay with their current employer and their belief that the organization supports diversity and inclusion. How they define diversity and inclusion varies from typical demographics to ideas/ways of thinking, and tolerance, inclusiveness, and openness in the workplace, Deloitte’s global survey noted.
Share how your leadership defines diversity and inclusion. To understand what your workforce values under diversity and inclusion, ask them. Then develop policies that support these values and train all levels of employees as these definitions evolve.
These generations often value experiences over financial gain and possession. However, they also want to be paid for the work they do rather than work long hours in salaried positions that cause their work/life balance to suffer.
Because they’re choosing to delay becoming parents, flexible and work-from-home work options help retain Gen Y and Xers who want to keep working for you but still be close to their kids.
These generations also want the flexibility to work a schedule that supports vacation time for travel. And employers are responding: the State of American Vacation 2018 found that employers are beginning to encourage vacation cultures and as a result, employees are feeling more confident about using earned time off. For three years in a row, the amount of vacation time used increased. Still, 52% of American workers didn’t use up all their vacation time in 2017. The younger generations are likely to decrease that number.
Career growth opportunities rank No. 1 on the list of factors most important to job seekers surveyed for a 2019 report by Jobvite. The same survey noted only 17% of those who left their jobs within the previous 12 months did so for more money.
Accurate Job Descriptions
Providing Gen Y and X with clear expectations of their work begins during recruitment and hiring. A Jobvite study found that 43% of new hires who left within their first 90 days did so because their job duties were different than their expectations based on job descriptions and interviews.
Training that Adapts
Nearly two-thirds of employees are concerned about the impact of AI and robotics on the workforce. Although generations Y and X are a tech-savvy generation, many feel unprepared for Industry 4.0. They expect their employer to provide the training they need to be productive and successful.
Just because purpose may be more important to many younger workers than the size of their paycheck, don’t think that means Gen Y and X aren’t ambitious: Deloitte found that more than half strive to be high-earners. They’ll seek out opportunities for training and advancement at work, and if they don’t find what they want, they’ll move on. They are more comfortable than other generations in striving for jobs for which they don’t have all the required skills if training is offered.
The great news is that making your workplace more friendly for Gen Y and X will benefit your employees of all ages. Offering flexible work schedules and work-from-home options not only appeal to younger workers but also Baby Boomer caretakers of aging parents and grandchildren. Supporting a variety of community organizations better ensures your employers will feel you value what’s important to them. Developing the talents and strengths of every employee while training them to adapt to ongoing changes in technology increases productivity and adds to your bottom line.