HR Strategies for Attracting and Retaining Millennials
Posted in Human Resources Articles, Total Reads: 1507
, Published on 05 February 2016
Why is it that the software industry has a high attrition rate? A study on the IT industry showed that it is crucial for an employer to ensure that the value system of their employees is in consonance with the values of the organization. If not, the employee may either change his values or quit the organization. This is where human resource management intervention becomes primarily important.
Consider a workforce which will make up one half of the global corporate human resources in the next five years. These are the millennials, also known as Generation Y. Millennials were born between 1980s and 2000. As such, they have grown in a time of rapid change and advancement in all the fields. Thus, they have different expectations and priorities as compared to Baby Boomers or Generation X.
Deloitte’s fifth global Millennial Survey focused on the beliefs, values and ambitions that Gen Y carries. According the survey, if given a chance, one in four millennials would quit their current job in the next one year to work in an organization which offers something different. Moreover, this figure rises to a staggering 44% if the time period is increased to two years. By 2020, only 16% of millennials see themselves employed with their current organization. This poses a serious threat to any business who is majorly employing a large number of millennials especially in a market like United States. A recent analysis shows that they now make the largest labor market in the U.S economy, inching past other generations. If we take demographic sub groups into consideration, 32% of the millennials with children intend to stay with their present employer for 5 years or more as compared to 24% of those without children. This is a significant difference, however, it does not change the fact that organizations need to increasingly focus on new measures and methods to retain this workforce.
It is evident from the given statistics that millennials are looking for creativity, growth and innovation at the workplace. If they feel that they are not able to build on their career in the present work role or if their role efficacy levels are low, they will switch to a job that offers them these opportunities. A high paying, stable job is not their need anymore. In the survey conducted by Deloitte, 55% of the millennials ranked their personal values and morals as the factor which affects their decision making the most as compared to career progression which ranked second.
So how do we bridge the gaps and strengthen loyalty?
The HRM policies of any business should focus on aligning individual goals with company goals to ensure individual, collective and organizational growth.
Based on the data available, the strategies for attracting and retaining millenialls should be focused on:
• Identifying Millennial values and aligning organizational culture with the same
• Promoting organization cohesiveness so as to meet the needs of millennials as far as possible
• Providing growth opportunities to the employees to ensure potential effectiveness and job satisfaction
These approaches are given below:
The millennials feel that performance management and career opportunities are the most important engagement drivers. Managers need to realize that the engagement practices which worked for the baby boomers may not prove to be too effective for the millenials. As such they need to conduct annual engagement studies and find out the key engagement variables taking into consideration the generational differences. The new techniques which are formulated for engagement purposes should be equitable in terms of motivation and satisfaction for all the employees.
Collaborative Work Environment
An interactive working environment helps in relationship building. This helps employees to feel connected to the organization and the brand. Moreover, the work culture plays a significant role in inspiring and engaging the employees to rejuvenate the workforce.
Training and Development
According to a study conducted by Infosys and Future Foundation, 40 percent of the millennials believe that with the advancement in technology, their job could possibly become redundant in the next five years. Hence, they constantly look for jobs wherein the company believes in investing in their training and development. If they feel that their skills are not being honed or enhanced, they will look for other opportunities.
According to the millennial findings from the Intelligence group, 72% of Generation y would like to be their own boss. However, if they do have to work for a boss, 79% would like the boss to serve more as a mentor or coach. Moreover, considering their technical competence, their skills and knowledge can also be used for reverse mentoring. This helps the employees feel more effective in terms of adding value to the organization.
Business are not only competing with their competitors for talent but also the employees who dream of running their own business. According to a study, 54% of millennials wish to start a business within the next five years, or have already started one. Creating a culture of intrapreneurship thus, becomes critical. Every employee should be given flexibility and autonomy at the workplace to add value to the business through new tools and technologies. Google Glass and Google driverclass are results of examples of the same.
Millennials are highly educated and tech-savy. They prefer organizations which are dynamic, technologically advanced and believe in redefining their business processes to become more efficient. Organizations should increasingly work towards enhancing their technology and using social media for recruitment. Digital and social presence can increasingly help millennials feel connected to the brand.
A recent PwC study shows that 64% of millennials would like to have the flexibility to work from home and 66% would like to shift their work hours. Millennials want clear instructions and concrete targets. Their location of work should not matter if the employers know what are the results expected from them.
Millenials do not believe in semi-annual or annual review. A Viacom study shows that 8 out of 10 millennials value regular feedback to ensure they are meeting expectations and also expect opportunities to give feedback about the processes in place. This helps them gauge their performance and work towards their career goals accordingly.
Organizations need to find out what keeps the millennials motivated? Is there any change required in the benefits program? Based on this, companies may give customized benefits to the employees to increase motivation levels. Based on the findings of Kenan-Flagler Business School tuition assistance, loan repayment, global work and travel opportunities and health care incentives are powerful ways of attracting and retaining millennials.
Development and Growth opportunities
Less than a quarter millennials are satisfied with the developmental opportunities. In order to create a perfect job environment, it is important that organizations have excellent programs to develop this cohort. Deloitte’s and Virtuali's finding show that 95% of this generation believes that it is important that companies offer leadership developmental programs. Job enlargement, job enrichment and rotational assignments can prove to be beneficial in increasing job satisfaction and motivating employees. Moreover, they believe that results need to have a greater impact on promotion as compared to the tenure in the organization. To meet this expectation, organizations can add more grades/levels into the hierarchy which can keep the workforce incentivized.
It is important for employers to provide clearly defined job roles and remove any ambiguity. Millennials want to be clear of how each role would help them reach their objectives. Career planning thus, becomes crucial. A survey by Cap Strat found that 72% of Gen Y are willing to sacrifice higher paying jobs for a professionally and personally fulfilling careers.
A new study from Payscale.com shows that only 13% of the millennials think that they should stay in one job for atleast five years. Considering that by 2025, the millennial cohort will make up three quarters of the workforce, using metrics and data analytics in the context of talent strategy and strategic people planning is a critical measure to be undertaken by business houses. 85% of companies have already started changing policies to appeal to millennials. A higher pay package is not the only way of attracting and retaining this generation but the company has to offer a complete package. Millennials are pragmatic and companies need to ensure that if they wish to leverage the Gen Y potential, they need to be transparent and inclusive in their work culture. They need to meet the expectations of the workforce and deliver all that is promised. Whatever is emphasized in meetings and communications will signal what the business focuses on and what it cares about. As such, organizations should focus on creating the perfect job role and working environment in order to retain this generation.
This article has been authored by Ruchika Malik from Symbiosis Institute of Management Studies