RELATIONSHIP statuses, hashtags, Instagram, Rickrolling, LOLcats, OMG, #Yolo – ten years ago, these meant nothing. To a lot of people, they still don’t. They exist in a world of communication dominated by the youngest generation in the workforce: millennials.
The world has changed rapidly in the past 20 years. The question, ‘where are you?’, was redundant prior to large-scale adoption of mobile phones, as you needed to know where someone was to call and ask. This fact is often overlooked, as the iPhone and its Android competitors are now so ubiquitous that it’s surprising to remember Apple didn’t launch its flagship product until seven years ago.
This is the environment millennials, or Generation Y, have grown up in: always on, always accessible, always developing. As a result, there are significant differences between the youngest members of the workforce and the generations that came before them.
While the trend of older workers staying on in the workplace is growing, so is the proportion of the workforce made up of millennials. How do businesses and finance directors understand their differences, their strengths and their motivations in order to get the most out of younger employees?
Generally speaking, millennials began entering the workforce around Y2K: the years of dotcom, fledgling social media and birth of mobile internet. For some of the youngest in the cohort, Facebook, Twitter, iPhones and Blackberry Messaging (BBM), and all their former iterations, have been omnipresent from adolescence. If there’s one thing these people know, it’s the digital world.
McDonald’s senior vice president and UK chief financial officer Paul Pomroy says that millennials bring “fantastic” skills to the business due to their technological aptitude.
“As they have grown up in a digital world, you’ll often find younger team members coaching managers through new tools and bringing a fresh perspective to how a modern and progressive business can operate,” he explains.
According to Thomas Cooper chief financial officer Arif Kamal, millennials really set themselves apart by their understanding of social media. Growing up in a world of instant gratification has shifted their world view, however.
“I find younger employees very enthusiastic, but the loyalty factor is not there in most of them,” Kamal says. “They get bored easily, so if they don’t get what they want, they’ll move on.”
This is a common observation among employers. PwC’s NextGen research came about due to a worrying trend of young professionals turning their back on the business that trained them after a few years. This raised issues, as the firm predicted 80% of its global workforce will be millennials by 2016.
The firm’s December 2013 report, which involved more than 180,000 people across 158 countries, highlighted some stark truths. More than seven out of ten (71%) PwC millennial workers felt work interferes with their personal lives – and they were not convinced it is worth the sacrifice. And 38% could be willing to vote with their feet, as they did not expect to work in one place for nine years or more.
When they’re in work, Gen Y appears to adopt a ‘self-first’ approach to performance and progression. According to a YouGov study from incentive provider Xactly, millennials aged 25-34 are more individualistic than their older colleagues. The research, carried out among 600 UK businesses in March this year, identified a preference for competition among the younger workforce.
Almost half of respondents aged 25-34 prefer to be in direct competition with colleagues, compared to 21% of those aged over 55. This dogged commitment to self has also seen 16% of millennials put their personal targets ahead of customer interests in the last 12 months, compared to 3% of baby boomers. This could have serious implications for businesses, Xactly said, as millennials will replace the 40% of older workers expected to retire in the next five to ten years.
But this perceived self-first stance appears at odds with millennials’ views on wider society. According to Deloitte’s 2014 millennial survey, half of respondents born in 1983 or later prioritise working for a business with ethical practices and have strong views on responsibility for resource scarcity, climate change and income equality.
Employers need to understand this difference in priorities for millennial workers compared to more senior staff, Robert Half managing director Phil Sheridan says. A commitment to corporate social responsibility and “a respected brand with strong ethical values” is also important to younger workers choosing an employer.
Working nine to five?
Millennials have a different perspective on business and a different way of working – for better or worse. Younger workers are more likely to mix business with pleasure, rather than keeping their personal interactions outside of nine to five.
In an environment where three generations – baby boomers, Generation X and millennials – are working together, there are instances where “people don’t understand the way other people operate”, CIMA technical specialist Peter Simons says.
“You’ve got baby boomers with an old-fashioned work ethic. Then you have people on social media. They have two mobiles on their desk: their work one and their personal one, and they seem to mix work and pleasure through the day. That’s anathema to baby boomers.”
Flexibility is important to millennials, with two-thirds of respondents in PwC’s NextGen survey looking for the ability to occasionally work from home. A similar proportion said they would like to shift their work hours.
However, this supple approach to hours and location should be seen as a benefit, not a burden, ICAEW director of qualifications Gavin Aspden argues.
“The younger generation don’t think twice about getting an email on a Saturday, because that’s how they’re used to communicating,” he says. “Being robust as a manager about people being in the office at 9am, you have to ask – does that really matter?”
In order to get the most out of young professionals, businesses “have to look at people’s strengths differently”, Aspden says.
Millennials aren’t just takers, however – their use of technology and way of working are influencing the way businesses approach work. Pomroy says McDonald’s has “seen a shift in the use of data and analytics” that has been driven by younger, more tech-savvy members.
“As a team, we have benefited from this, as our insights are now of a much higher standard than five years ago, with more time being spent on analysis adding value rather than generating reports,” he explains.
Attract, recruit, retain
Attracting top talent from the millennial generation requires a different approach that reflects their values and motivations, Robert Walters director of accountancy and finance recruitment Andrew Setchell says.
A study by the specialist recruiter found 26% of millennials use job boards to find their next roles, while half use social media to research a prospective employer in terms of its culture, career opportunities and the image the business projects.
“While millennials strongly value being part of a team, they are likely to be more mobile and less loyal to the brand or business than the generation before them, so it’s important that employers recognise their individual talents,” he says.
“This is the generation that grew up in an era of fast-evolving technologies, with multiple sources of information and entertainment competing for their attention. They will be looking for employers to keep them engaged with regular feedback and encouragement.”
Indeed, the need for reinforcement was reflected in PwC’s NextGen survey. Two in five millennials prefer to be rewarded or recognised for their work monthly, if not more frequently. Transparency was valued highly, particularly in regards of career path, compensation and rewards and almost all wanted face-to-face discussions about future development.
McDonald’s tends to recruit either newly qualified accountants or university graduates into its finance division, Pomroy says. A clear career path is “one of the key attractions” it offers as an employer.
“The progression we offer is attuned to their needs. Members of the team spend no more than 18 months to two years working in different parts of the finance function before we rotate them to a new area, building their knowledge base,” Pomroy explains.
Every year for the past five years, McDonald’s has taken on a small number of candidates straight from university, who then spend three years getting to grips with the business while studying for accountancy qualifications. “This path to progression is something that we know millennial candidates value,” he adds.
CIMA has conducted interviews with major UK employers as part of its syllabus research. In these interviews, patterns have tended to emerge regarding the types of employers that are more successful in providing a nurturing environment for millennial workers.
“Generally, traditional employers – Rolls Royce, Ford, Unilever, Procter & Gamble, Boots, Marks & Spencer – have a paternalistic attitude towards their people. They want to develop them,” Simons explains. “On the other hand, certain financial institutions tend to want to hire in skills.”
While some of the less development-focused employers are able to offer flashy offices and high remuneration, they are more likely to operate a “Darwinian ecosystem” of thrive-or-flounder, Simons says. This may mean that millennial employees who are middle-skilled at entry but will offer long-term value to a business are missed. “Sensible young people are less swayed by quick money today than [they are by] the question, ‘Where will I be when I’m 30?’” he adds.
An obvious requirement for attracting millennials is meeting their technological needs. The members of this generation are “digital natives”, Robert Half’s Sheridan says, “so will automatically see work through a lens of new technology”. To meet these expectations, Thomas Cooper CFO Kamal provides “gadgets and software” for younger workers to enable them to work in the way they want to.
However, ICAEW’s Aspden warns against dangling the carrot of devices and remote working in an effort to attract millennials. He says: “One of the dangers is that the more we shout about technology, the more anti-technology we sound. When you keep telling everyone how good your business is at flexible working, it usually means flexible working isn’t something that you really embrace.”
The ability to work flexibly is “just an assumption now”, Aspden explains. “Digital transformation is a wonderful thing, but the younger generation don’t need to go through it because they’re already part of it.”
Millennials are the future of business, literally. Failing to meet the needs of younger workers means that “your business is going to miss out on recruiting the brightest and best”, Robert Walters’ Setchell says. Given their motivations and ambitious nature, “offering a structured programme of long-term rewards can pay real dividends”, he adds.
While much is made of the differences between millennials and the preceding generations, CIMA’s Simons is less convinced that Generation Y breaks the mould in terms of young professionals.
“Survey results will tell you that young people are more idealistic and have unrealistic expectations about how they will get on,” he says. “I can assure you that would have been true of any generation that had become ‘the next generation’ for as long as anyone can remember.”
That said, Aspden explains that millennials are under much greater pressure to perform than previous generations, owing to the ‘always-on’ nature of the business world. And, he argues, they cope with it a lot better than their elders may have.
He explains: “Calling trainee chartered accountants ‘students’ is almost a bit of an insult, because these guys are young professionals from the minute they start. Expectations are higher and people are much more able to deal with complex situations at the age of 21 than I was ever able to at that age.”
Ultimately, finance directors and senior staff will have to acknowledge that the generation they are currently mentoring for future leadership roles “are probably better at some things than we are”, Aspden concludes. ?
Baby boomers (1946-1960):
born in the years following World War II, during a surge in birth rate. Considered loyal to employers, most enjoyed benefits including final salary pensions, but are increasingly remaining in the workforce past traditional retirement ages.
Generation X (1961-1980):
is currently reaching the mid-point in their careers. Gen X became associated with increasingly disposable consumer culture and disaffection following Douglas Coupland’s 1991 novel Generation X: Tales for an Accelerated Culture.
Millennials/Generation Y (1981-2000):b>
first generation to grow up with large-scale access to computing technology and the internet. Considered technologically savvy and driven, but also selfish and with unrealistic expectations.
• Half (50%) want to work for a business with ethical practices
• About half think business must do more to address resource scarcity (56%), climate change (55%) and income equality (49%)
• Half perceive government as negatively affecting unemployment (47%), resource scarcity (43%) and income inequality (56%)
• Two-thirds (63%) give to charities, 43% actively volunteer or are a member of community organisation, and half (52%) sign petitions
Source: Deloitte, The Millennial Survey 2014: Big Demands and High Expectations, January 2014