Millennials are currently the largest segment of the U.S. workforce. They’re expected to make up 50% of the nation’s employees over the next couple of years – a number that will rise to 75% come 2030.
On top of that, it’s projected that 61 million Gen Z job seekers will be entering the U.S. job market in the next few years, accounting for 20% of the workforce.
Compared to baby boomers and Gen X, the above two age segments come to the workplace with some differences in their expectations and desires in the workplace. Retaining these employees isn’t just about job satisfaction and loyalty — there are many other factors involved, varying from career growth and overall engagement.
Ceridian’s 2018-2019 Pulse of Talent found that 37% of surveyed employees aged 18 to 34 cited compensation as the number one reason for leaving their last job. The report also showed that 18% of the same segment resigned from their previous job because they wished to expand their scope, while 17% left due to not feeling respected.
According to the Pulse of Talent report, on average employees felt waiting 2.1 years is a reasonable timeframe to receive a promotion, yet they said they only get promoted on average every 4.9 years. With an age segment focused on expanding their scope, feeling respected, and wanting to make a tangible impact on their companies, it’s important that employers design an employee experience that makes it clear they’re willing to invest in their younger employees’ growth and development for the long-term.
The same report found that 55% of survey participants ages 18 to 24 are actively seeking new positions, compared to the 39% of those aged 39 to 45.
Younger generations aren’t sticking around if employers don’t meet their needs and desires. In today’s digital age, platforms like LinkedIn make networking far more convenient than it once was. Millennial and Gen Z employees are aware that other career opportunities are available just around the corner.
We live in the era where market data is more accessible than ever. Compensation comparison sites like Glassdoor and PayScale offer salary information with a few clicks of a button. As such, the millennial and Gen Z workforces are assessing comparative salaries frequently – meaning they have a good idea of what makes for fair compensation. Also, the topic of pay is becoming less taboo, especially amongst younger employees, which means conversations about pay are being more openly shared with one another.
Transparency around how compensation is structured and how pay decisions are made should be a priority for all organizations. Ceridian’s Pay Experience Report found that 59% of survey respondents said they don’t have clearly defined annual pay reviews.
Furthermore, many companies’ pay reviews only align with the corporate budget cycle. With well-informed millennial and Gen Z employees, the job market is too competitive for such an outdated approach. As Ceridian’s CHRO, Lisa Sterling says in the Pay Experience Report, “The way we compensate people should be tied to their contribution, their influence, and their impact on the organization.”
Fair compensation and transparency go a long way in retaining millennial and Gen Z talent. However, to effectively retain younger employees, companies must go beyond that. There’s a direct correlation between companies investing in employee growth and development and retention.
Companies must create clear development paths and communicate how they will support the success of their employees. Succession planning is an effective way to define a clear path within the organization, and helps managers and employees work together to outline the steps needed to get to an employee’s next milestone.
Only 51% of employees feel they’re making an impact and 92% of those who responded this way say they were happy in their jobs and plan to stay 7.9 more years. Shockingly, studies show that only 7% of employees today fully understand their company’s business goals and what’s expected of them to achieve these goals. When employees’ goals aren’t aligned with those of the organization, they may feel like they don’t have a voice in setting expectations that are “relevant, fair, and challenging.”
Aligning an employee’s performance and growth with the direction of the organization will promote their overall engagement, commitment, and sense of ownership. Companies can leverage technology to cascade goals down through the organization so employees can understand how they’re going to accomplish them.
Despite millennials job-hopping up to 20 times throughout their career – a number that is double that of their Boomer counterparts – they’ll stick around if they see a chance for internal mobility. Almost 90% of millennials claim that they would choose to stay in a job for the next 10 years if they knew they’d get annual raises and upward career mobility. Organizations that provide various internal opportunities for their employees will support longer-term engagement and retention.
When work takes over an employee's life, it can adversely affect their overall performance and can ultimately lead to turnover from burnout. However, as technology becomes part of our everyday lives, it’s increasingly difficult for employees to separate work and life. This is especially true for younger generations that are constantly plugged in.
Companies must understand that their workforce consists of many generations and each employee is at a different stage in their life. At Ceridian, we advocate for work-like blending where we support employees addressing life matters while at work if needed, and vice versa. Our Fun@Work team coordinates events and team-building activities so employees can let off steam while getting to know their colleagues.
Companies can also consider offering discounted gym memberships – a mutually beneficial act. Not only can it improve an employee’s overall health, but it can drastically improve their focus at work.
It’s time to start viewing employees as consumers or subscribers – especially if retention is a top priority. And just as retaining customers requires a personal touch and long-term relationship building, retaining employees requires an understanding of your people and a tangible investment in their success. Leadership should mandate weekly one-on-one time to discuss career plans with employees to make them feel valued.
Millennials and Gen Z employees come from the information era. They’re less likely to embrace outdated practices, nor will they sit idly waiting for promotions. To thrive well into the future, organizations must work to retain their multi-generational employees by adapting to their unique set of expectations.