It’s an understatement to say that the way work is seen and done in America is changing rapidly. The workforce of today has different wants and needs from their employer, and this is change that successful organizations must hone in on to continue to thrive.
If you’re one of the companies that ignores this change there’s a good chance you’ll find yourself on the wrong side of the talent pool in just a few years. And we all know that without an adequate talent pipeline, you’ll lose out on the driving force of innovation and engagement.
Over the next several weeks, we’ll focus on four key aspects of change to the American workforce, what drove this change, and how your company can adapt to the change in values of today’s workforce.
So let’s get started.
Flash back to 1966. The Beatles were the hot pop band. Color TV was just making its foray into the living room. America was deep in the Vietnam War, and the country was divided. But among those in the workforce, when someone took a job with a company, he or she most likely intended to make a career there – staying for an average of 32 years. Thus employees were groomed to grow or stay, unless something disastrous – like being terminated for poor performance - occurred.
This means that most people had no more than two jobs in their lifetime.
Today, the average worker stays with an organization for 4.4 years. That's it. Most people own a car for longer than that. In fact, the new “socially accepted minimum” for staying with a company is 18 months and you'll get bonus points if you can round out to a full two years. Based off of the average career span, that means most Millennials (anyone born 1981-2000) will be racking up 15-20 jobs during their working years.
So, what the heck happened to make this drastic shift occur?
New Values = New Rules
As mentioned earlier, most people found a company and stuck with it. Leaders within companies planned for that, and they rewarded employees who were loyal by offering them benefits to keep them content. Pensions, which were essentially a retirement royalty (I define it, as they are pretty hard to come by these days) were so common, they became an expected component of the employee benefits conversation. Nearly every company offered them, and the Baby Boomer generation remained loyal to their employer to have a safe and comfortable retirement after 20+ years of service.
Today, only 20% of companies offer a defined-benefit pension plan and the employers that do are decreasing the benefits annually. This is not (necessarily) because they don’t want to reward employees who stay with the company for long periods of time, but rather for these reasons:
- There are other opportunities for retirement – In the mid-60s, the average person didn’t have significant access to retirement vehicles, such as IRAs, investment accounts or mutual funds. Hence, they planned their entire retirement off of a pension. Today, there are a plethora of options, so candidates for jobs often don’t consider this to be a primary criteria for taking a job.
- Turnover is now considered healthy – As the desired focus shifts from becoming a Megaconglomerate to an agile and innovative company, most businesses have realized that fresh talent can bring new perspectives.
- Layoffs increase turnover – Pre 1980's the idea of widespread corporate layoffs was considered negative and avoided at all costs. Shareholders viewed turnover as dangerous and a sign of a company in trouble, thus smart companies kept all turnover quiet and as small as possible. However, in the wake of IBM's historic layoffs in the 80's and 90's this became a societal norm, and stockholders rewarded large companies for cutting costs. Soon following the bursting of the dot com bubble and the recession of the 2000s all of which shifted a loyal and steady workforce into one that was fearful and flighty.
- Better Opportunity is, well, better. - Unlike their baby boom-ing predecessors, the Gen X and Millennial employee is more opportunistic and entrepreneurial. They find value working in a fast paced environment where they can have an impact, but if something better presents itself, they are very likely to change paths. With growing feelings of certainty and stability in the market, loyalty has quickly become a thing of the past (and this is the case on both sides of the employer-employee relationship.)
Career < Meaningful Impact
The Millennial employee has quickly become a hot point of contention – not because they can't add value, but mostly because they are not yet understood. Soon Millennials will make up the largest component of the American workforce, and with that they bring complex changes (and perspectives on work) that many long-standing “Fortune 500-esque” companies aren’t prepared for.
For a company to be successful with a Millennial talent pool, they're going to have to embrace a few key concepts:
- Throw out the rule book – Traditional incentives and rewards programs that have had impact for Boomers & Gen X employees won't work with them. Many Millennials don’t find value in more money, 401(k) matching or the aforementioned pension. While this is a generalization, often Millennial employees want to feel they are having an impact on their business (and society), and contributing to the greater good of their company and local community.
- Make it fun – If you were to ask anyone over the age of 50 if they considered their job “fun” most of them would look at you like you had lobsters crawling out of your ears (a reference from my favorite Christmas movie). But, if you hope to attract a Millennial you’d better find ways to inject fun into your work environment. This group is social, they want to be a part of a community, and they want to enjoy themselves – which means the traditional grey cubicle environment won’t appeal to most candidates.
- Commuting and Location – In the 50s and 60s, companies that young people wanted to work for were often based in the cities, more often than not, New York City. But with high crime, expensive living and long-commutes, there was a massive shift into corporate parks in the suburbs. For example, companies such as IBM, Pepsi, and GE were all based in New York City but moved their headquarters to large suburban campuses in Westchester County, NY And Fairfield County, CT, and attracted talent with built-in gyms and softball fields. This is what young people wanted. Fast forward to now. We’re back to the cities. Young people have moved back into the cities en masse. They’ve traded their cars for bikes. And they want to live next to where they work, and they refuse to commute for two hours in traffic. While offices in the ‘burbs might be the desired location for Gen X’ers and Boomers with families, you’ll have to trade-off if you want to recruit and retain this generation (check out Part 2 of this blog series for more on the changing location of the American workforce).
- Adopt 1:1's – Millennials can truly be an untapped goldmine for your organization. This group is driven to impress and they want to succeed, but they're also the first generation to really crave feedback. Transition away from the stale “Annual Review,” it is impossible to get an accurate depiction of a person's performance over an entire year. More frequent weekly or quarterly touch-bases to discuss areas of success and opportunities for improvement will help Millennial employees feel valued, and will keep them accomplishing any goals you put forth.
- Pick up the Pace – They don't call them the “NOW” generation for nothing. This segment of your workforce will move more quickly, adapt more readily, but wants results right away. While this may seem great, there are also drawbacks – at times Millennials can become overly confident in their work, and their high ambition may not be met with an equal amount of focus. A desire to succeed may also be met with a lack of interest if opportunities for advancement are not clear.
How to Adapt
Shifting corporate values to accommodate a component of your workforce might seem like a drastic step. However, if your company wants to attract and retain (for an average of 4.4 years) the top talent in your industry, some changes have to happen. Instead of calling up a Bain or Booz Allen to rewrite your core values, consider a few of the following ways to freshen up your offerings for a new generation of employee:
- Volunteer/Outreach Days – Creating corporate-sponsored outreach days giving back to the community will benefit your company in multiple ways. First, your Millennial employees will breathe easy knowing that they have chosen an organization that cares about social responsibility. This is also a great way to build and unify your team (remember, these guys and gals are very social) and you might even get the added bonus of positive PR for doing good locally.
- Travel time – Instead of just offering traditional vacation days that your employees can use as they see fit, encourage them to take vacations. Millennials love to travel and many consider the added benefits of cultural immersion while they are young to be a highly important life experience. Many companies even offer “Vacation bonuses” to encourage their employees to take a vacation and go somewhere meaningful with it.
- Dog friendly work environment – This goes hand-in-hand with the idea of injecting 'fun' into your culture. Employees will invest more in an organization that they feel comfortable and at ease in – so even if four legged friends are against building policy consider overall comfort in your work environment. Shift away from the suit & tie to business casual or just casual, offer comfortable working spaces aside from just cubicles where employees can be creative.
- Free Lunch – Who said there's no such thing as a free lunch? Millennials are foodies, so offering free lunch, once a week or snacks and complimentary beverages in the break room has become a pretty expected perk in most companies.
- After work social events – Along with the Social Media savvy of this generation, comes the desire to connect with coworkers outside of office hours. The faux pas of not socializing outside of business hours is a dated concept, and will not be embraced by this group. After work happy hours are quickly becoming the norm, and many start-up type companies have even embraced the idea of stocking beer and wine in their fridges for Friday afternoons.
- Beach balls around the office – This one works in tandem with the 'fun work environment' idea. Having silly ways for employees to burn off steam, like beach balls or Nerf guns, to play with in the office, can keep these employees engaged and more productive.
Just because the values of the American workforce are once again shifting, doesn’t mean that your company cannot adjust to the new talent pool. Following the tips listed above, and embracing the idea that a great employee may only stay for four years, instead of 40, will go a long way in helping your organization to remain successful. Check out this blog next week for Part II: How a Change of Venue is Shifting the American workforce.