Any investment management firm knows there is only one opportunity for a sustainable advantage over the plethora of rivals. That would be to hire and retain superior talent. Many organizations are discovering that hiring sharp, young talent and keeping it engaged is more difficult than with previous generations.
Dare I say it? We are talking about the millennials, those born in the 1980s and 1990s and raised on digital devices, social media, video games and parental coddling. The rap against millennials is that they are lazy and have a sense of entitlement. Despite the perceived liabilities, this is not a group employers can afford to ignore, considering millennials are now the largest component of the U.S. workforce.
Even a redoubtable resource-rich organization such as PwC has found the millennials to be a challenge. About eight years ago, PwC noticed new employees were staying only 12 to 24 months before decamping for a new scene. The first thought among PwC human resource executives was they were hiring the wrong people. But when the giant accounting and consulting firm commissioned a study of its youngest staff members, the results were evident and didn’t have to do with bad hiring practices. The problem was bad retention practices. Anne Donovan, the firm’s human capital formation leader, recently told Fortune magazine the study found millennials want to “work differently,” to put it kindly, and they were too impatient to wait around for things to change to their liking.
One might be inclined to take a lesson from Silicon Valley, a place where you find millennials in great concentration. The average age at some technology companies is less than 30 years. You might automatically conclude that what millennials want is a casual dress code and perks of every conceivable kind, ranging from free meals to napping and meditation pods. But companies that have had success with millennials discovered something different, though not entirely. Their experience points to five things companies can do to make their workplace into an environment more amenable to attracting and retaining these callow young brats (as some people regard them).
- Scrap the 9-to-5 workday. That one couldn’t be more obvious when you consider every generation has been carping about flexible hours. But flexibility of all kinds is exactly what millennials want. Donovan says PwC directed its managers to devise “flexibility plans,” and that is the single most important of a set of initiatives PwC has enacted to solve the millennial problem. It did a firm-wide survey in 2011 among millennials, and 95 percent of them cited work/life balance as important, and more than one-quarter of that group expressed disappointment about their inability to achieve that in their current work environment.
- Provide training. A 2016 survey by PwC archrival Deloitte found two-thirds of millennials expect to leave their current employers by 2020, with more than 70 percent of respondents citing a lack of leadership development as to the reason why.
- Increase the frequency of employee reviews. The annual employee review is passé, as far as millennials are concerned. IBM is one of the companies that acted on this by creating a team called IBM’s Millennial Core, which is a community of young employees from around the world. The company rolled out a new system called Checkpoint this year. That system calls on employees to set short-term goals whose progress is assessed during quarterly check-ins.
- Give them a sense of purpose. Again quoting the Deloitte survey, six in 10 millennials said a sense of purpose was part of their calculation in accepting their current jobs. (Maybe they’re not so callow and bratty after all.) Almost half declined to perform assignments that contradicted their values. (Readers, you might want to expunge that parenthetical statement I just made. In the old days, “declining” to perform work assignments was called insubordination and employees were summarily fired.)
- And, yes, they want the perks too. Silicon Valley has set the standard on lavish bennies and perks, and most companies from less vigorous and profit-rich lines of business cannot keep pace. Don’t despair, though. Donovan says perks are the tangible signs of a caring company culture, but millennials are also driven by the non-tangible, more emotional rewards of being employed by a functional organization. She told Fortune: “Millennials are driven by how well their team works together, how supported and appreciated they feel. They’re all about how it feels.”
Fortifying an organization with primo talent has never been easy. Keeping it is even harder. Even in an era of diminishing employment opportunities, millennials are making attraction and retention a Sisyphean task.
The views, statements and opinions expressed in this article are those of the author and are not necessarily those of Institutional Real Estate, Inc.
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Mike Consol is editor of Real Assets Adviser.
