The ability to understand how to manage millennials may prove crucial to your company's long-term recruitment and retention strategies. Born between 1981 and 1996, this generation (sometimes known as Generation Y) recently became the largest age group in the American workforce.
As with previous generations, companies should take millennial preferences into account when developing aspects of their human capital management strategies, such as recruiting and compensation strategy.
Companies that approach employee retention in the same way that they did five years ago may struggle in attracting millennial talent. Here's a closer look at what millennials seek in a workplace and how you can translate those values into effective millennial employee retention strategies.
What do millennial workforces want?
Your millennial workforce may want flexible work environments, with benefits such as telecommuting or remote work opportunities. Increasingly, they focus on these and other factors that make it easier to achieve work/life balance.
To get better at recruiting millennials — and retaining them — evaluate how millennial employees approach their work/life balance and what changes, if any, can be made to make for a more accommodating working environment.
Also, many members of this generation seek out employers whose corporate social responsibility reflects their own values. This may include finding employers that give back to the community.
Employers can consider even small efforts to help make an impact. For example, to give back, you could:
- Celebrate the end of the quarter with not just happy hour but also a canned food drive for a local food pantry.
- Help a nonprofit with your product or service. Give employees pro bono opportunities or empower them to find and work with organizations that could use your product or service.
- Use charity events, like 5K runs, as team-building exercises. Coworkers can train together, have fun, and give back to great causes.
In the end, how you give back can be one of your best millennial employee retention strategies. Some members of Gen Y have reported that they would rather start their own business than join a workplace that doesn't fit their values.
What is an ideal workplace for millennial employees?
As employers reflect on how to manage millennials more effectively, it bears noting that millennials want many of the same things other generations want: a rewarding career, friendly coworkers, and fair compensation. Nevertheless, millennials may want to work on different terms than previous generations. Since they've grown up with technology, they may be more accustomed to working in a variety of locations — not just the traditional 9-to-5 workplace. As they take these habits into the world of business, many prefer flexible working options.
Millennials may be looking for:
- Flexible office hours
- Opportunity for telecommuting
- Compressed work week
- Job sharing
Not all flexible options will fit with every business, but providing some options shows that your business values the millennial mindset of balancing work and family.
Companies that provide some level of flexibility often attract more millennial talent by experimenting with unlimited vacation time and implementing structured telecommuting policies. In general, the more you can provide your workers with flexible benefits, the easier it may be to achieve effective millennial employee retention.
What else could millennials be looking for in the workplace?
- Opportunity for advancement/career growth
- Ample time to get up to speed
- Being engaged on a personal level
- Emphasis on teamwork and social interaction
- Mobility, independence, and flexibility in work hours
- Reflection of their social values in a business's policies
Strategies for attracting millennial talent
Millennials may sometimes appear to be a "breed apart" from previous generations when it comes to recruitment and hiring. The more focused your efforts are on meeting this generation's needs and desires, the more success you may see in recruiting the right people and keeping them within your organization.
Consider the following factors when attracting millennial talent:
Get to know them personally to encourage performance. If you want to attract millennials, you need to intentionally engage with them on a personal level. For instance, work to understand their personal goals and craft strategies that integrate those goals into performance metrics and meaningful job deliverables.
Renew your organization's commitment to a team-centric focus. Teams, teamwork, and social interaction are important to millennials who have grown up around social media, text messaging, and near-constant connectivity with others. A team-oriented focus often resonates with this group.
Establish a culture of mentorship and growth within the organization. A complementary tactic to the team approach is formalizing a mentorship program as well.
Other strategies for recruiting millennials can include:
- The use of mobile-optimized applicant tracking systems
- Applications that integrate with LinkedIn
- Learning about career opportunities through social recruiting
Finally, remember that within the context of career development, millennials still have decades left to work. So, the moves they make during this stage of their career often influence their long-term trajectory. A clear path to career development can mean many different things, from providing a formal progression and mentorship, to training opportunities. It may help to evaluate your career progression opportunities and find better approaches to enable employees to develop skills, earn promotions, and generally grow their careers.
How to manage millennials in the workplace
As stated above, this generation is often motivated by strong ideals and values, so one way to motivate them is to identify how the company is doing good or adding value within the community or beyond. As so-called digital natives, they are also likely to respond to strategies that incorporate the smart use of technology.
Largely, millennials prefer to be judged by their performance or output rather than, say, the amount of time they put in behind a desk. It doesn't matter where the work takes place — just that it gets done right and on time. Therefore, take a flexible approach with millennial employees to working remotely. And when giving feedback, be straightforward and welcome any questions they might have.
If the following elements aren't already included in your employee handbook, consider including policies that address:
- The use of technology and social media in the workplace
- Compliant anti-discrimination and sexual harassment policies
- Rules about smoking, vaping, or other unhealthy behavior
Remember: It's important to many millennials in the workplace that their employers' values are in keeping with their own. The expression of those values on a day-to-day basis is laid out in a company's employee handbook, so it's a natural place to start if you want to improve how you manage millennials.
Benefits that are attractive to millennial employees
Money is obviously an important factor in attracting millennials to your organization. However, it's helpful to look at compensation within the broader context of the full employment environment. Is your total compensation (salary + benefits) competitive for your industry? Correcting any imbalance in these areas may help with attracting and earning the loyalty of workers from all age groups.
Key benefits to consider offering your workforce:
- Paid time off policies
- Health insurance
- Offering more days for vacation and sick time
- Leave for new parents
- Paid days off to volunteer
- Contributions to employees' favorite charities
- Work-from-home policies
- Tuition reimbursement
- Retirement plans
- On-site day care
- Car tune-ups
- Dry cleaning
- Student loan assistance
- Employee discount programs
- Flexible spending accounts
- Child and elder care
- Financial wellness programs
- Telemedicine plans
- Legal plans
- Identity theft protection
The Gen Y workforce has a strong desire to contribute, but also wants a competitive benefits package as part of their overall commitment to an organization. By recognizing what energizes them at work, it may be easier to create more effective millennial employee retention strategies.
How student loan assistance can improve millennial employee retention
Student loan assistance is an employee benefit program where companies offer eligible employees the opportunity to receive monthly contributions toward their student loans along with resources to help manage their student debt.
Student loan repayment assistance has proven to be a particularly powerful benefit for college-educated millennials. Employees can save thousands in principal and interest from fast-tracked loan repayment. They can also feel comfort in knowing that their employer cares enough to offer a benefit that is relevant to them.
One of the keys to learning how to manage millennials effectively (and anyone, really) is signaling to them that you are aware of the issues most affecting them. Employees appreciate working for an employer who shows empathy and possible solutions for financial challenges, including student debt struggles. And they are more likely to stick with their employers as they see the monthly contributions shorten the payoff date of their loan.
Contribution amounts vary and should be driven by the employer's talent and business goals.
Why you should be thinking about millennial retirement
It's never too late to start planning for retirement, and help in this area can be a highly effective tool for recruiting and retaining millennial employees.
Of course, millennials may not be thinking about stashing savings away for retirement, but you can help them understand that the sooner they start saving, the more freedom they will have during retirement. As an employer, show your employees the importance of a long-term financial strategy and help them get on track.
Here are some ways to facilitate millennial retirement planning:
Millennials may not have much experience with saving, so simply removing a chunk of their paycheck may not sound appealing to them. When you are just beginning in the workforce, it's hard to imagine the immediate need to start saving for the day you retire. For this reason, retirement planning may not be priority for younger staff members — the idea of "I'll eventually get around to setting up my 401(k)" may be prevalent. If you automatically enroll your employees in their 401(k), they will need to make the decision to not participate, which is often a harder decision.
Set up automatic increases
Experts suggest increasing 401(k) contributions by about 1 percent to 2 percent each year (or more if possible), presumably the amount of increase you would expect to see from an annual raise. The goal is to maximize annual contributions to the annual limits as often as possible. The suggested percentage increase each year is an attainable amount and could help immensely in the long run.
Incentivize contributions with a match
Overcoming debt should be a priority; however, if an employer offers a match to 401(k) contributions, an employee should consider contributing enough to earn the match, even if they're in debt. "Free money" is hard to come by and can be a lifesaver at retirement.
Offer education about saving for retirement
When it comes to retirement planning, some millennials may not know where to begin. Stocks and compound interest could be new to them, and without having much understanding about these high-level concepts, they may feel overwhelmed and choose not to participate in their plan. An innovative idea (and company perk) may be a training seminar about the basic functions of retirement plans and diversifying a portfolio.
Helping your employees save for their retirement is a valuable asset. Emphasize the importance of contributing to a retirement account; you can be sure your employees will appreciate it.
How employers can benefit by adapting to the millennial workforce
Part of managing multiple generations in the workplace is making adjustments to accommodate those respective groups — especially for the largest of them. Companies that recruit and retain the best of Gen Y are already making efforts toward creating the incentives they want in work. Creating more opportunities for giving back, career advancement, and flexible work can help in hiring millennials and retaining them.
Members of this generation have a strong desire to contribute but also want work/life balance, flexibility, and collaborative environments. By recognizing what energizes them at work, it becomes that much easier to figure out how to manage millennials and create more effective employee retention programs for them.
Offering millennial employees the benefits they want can give your business an edge when competing for top talent. It can be helpful to work with an expert to gain access to the most desired benefits, which can include retirement plans, section 125 plans, and group and individual health insurance.