Employee retention is a hot topic for business leaders. Increasingly, companies have been hearing dismal employee engagement numbers from polls from established sources like Gallup, which show that 70% of American workers — and a slightly higher percentage of the millennial generation — do not feel engaged at work. However, even as larger budgets are earmarked for employee engagement initiatives, companies may be focused on the wrong aspects of employee retention.
New research published in the Harvard Business Review suggests that elements such as compensation, training, and other factors may be the key to keeping employees — especially millennials and Generation Z (post-millennial) talent—on your team for the long haul.
Here’s how the Harvard research and other studies may clash with the current understanding of what keeps employees content to stay with your company.
Do You Need a Specialized Millennial Retention Plan?
Culture's fascination and focus on the fast-growing millennial workforce has bolstered a $150 billion dollar per year HR consulting field. Yet research suggests that across generations, workers are focused on the same issues that drive employee retention, engagement, and satisfaction.
Researchers from the U.S. Department of Defense (DOD) and George Washington University reviewed 20 studies on the generational differences between workers and found that meaningful differences don't really exist.
Make a Positive Impact on the Organization
The research highlighted in the Harvard Business Review notes that the top consideration among workers from different age groups is to "make a positive difference at their organization." This should lead HR leaders to ask three key questions:
- Are your company's mission and vision clear and communicated to all employees? In other words, do your employees understand why what they work on makes a difference in the world?
- Are you clear about how each person's contribution matters, and what that helps you achieve in the larger context?
- Are employees recognized for making a difference to the company?
Solve Social or Environmental Challenges
The notion of seeking greater meaning in our work is also a common theme. Millennials may want to make their impact on the world because they've been raised in a context that says that they can have an impact; as Baby Boomers begin to focus on their legacy, they may also be concerned about leaving the world a better place. Think about whether the social and environmental impact of your company's work is clear or whether you need to communicate it better to your employees.
Financial Security and Work/Life Balance
There's a lot of discussion at workplaces around the country today about the meaning of work and recognition. Creating a workplace that's diverse, engaged, and challenging people to deliver their best work will likely result in an energized environment. However, companies must not overlook the importance of financial stability and work/life balance when crafting employee retention programs. Today's workers have financial objectives, from paying off student debt to saving for retirement, buying a house, starting a family, or traveling for work. Compensation absolutely matters, as does work/life balance and flexibility. While research shows that these issues aren't going to singlehandedly keep your best employees engaged, it also reveals that compensation, benefits, and flexibility all play a role in the final decision.
When your company is approaching the question of employee retention, it's important to think beyond basic retention. Instead, understand what actually motivates employees to feel engaged. Break down where traditional benefits and compensation still matter, and where employees may be looking for a higher degree of meaning or recognition. By thinking strategically about these important issues, companies like yours can better positioned to keep their top employees engaged.