As the big baby-boom generation begins to leave the workforce, companies should waste no time in learning the best strategies for recruiting and retaining their replacements – Generation Y. These young people promise to radically change the workplace with their technology and multitasking skills. They also will have high expectations of their employers for such things as career development, flexible schedules, and frequent feedback and guidance.
The recent economic crisis may provide employers with a golden opportunity to attract new talent without the usual intense competition for the best and brightest. In particular, far-sighted employers should take advantage of the weak job market and focus more than ever on the generation that will become their future workforce when baby boomers start to retire in larger numbers. Members of Generation Y are pouring out of schools into the workforce by the millions each year and ultimately will dominate the workplace. So now is the time to learn what makes Generation Y tick and to start to master the best strategies for recruiting, managing, and retaining these promising – but challenging – young people.
Born between 1980 and 2000, Generation Y – also referred to as the Millennial Generation and the Net Generation – is very ambitious and achievement-oriented. These young people offer employers the opportunity to make many of the changes that will be necessary to adapt to new technologies and the increasingly global economy. The digital natives grew up tethered to computers, cell phones, and video game players, so they are unmatched in their technology skills. They also tend to be more nimble and versatile than older workers. These flexible multitaskers like to take on new roles and responsibilities at their companies as often as possible to keep life interesting. They also have grown up in a multicultural environment so they work well with internationally diverse teams and relish the chance to work abroad.
But Generation Y will also test the limits. In fact, it’s the most entitled and demanding generation ever to set foot in the workplace. These self-confident young adults are highly ambitious and care little about hierarchy. To them, the ideal workplace is a meritocracy where employees advance at their own speed based on their accomplishments, not their seniority. Before job opportunities dried up over the past year, they also were likely to switch employers every year or two in their quest for career growth, more engaging work, and higher salaries.
It should be noted that Generation Y is not just an American or European phenomenon. Many of Generation Y’s traits are cross-cultural. In his book The Trophy Kids Grow Up: How the Millennial Generation Is Shaking Up the Workplace, author Ron Alsop finds that young people tend to be similar in many ways no matter where they live. He writes that, “Millennials around the world share many of the same characteristics, including their technology savvy, drive to succeed, job-hopping tendencies, and close connection to parents. But some career counselors worry that the stronger work ethic of millennials in some Asian countries may prove to be a competitive threat to young Americans, who are overly concerned about their personal needs and passions.”
Indeed, a study of Generation Y in China by Egon Zehnder and IBM revealed that young people there consider owning a home, earning a good salary, and starting a family to be extremely important. In contrast, many young Americans are delaying traditional milestones of adulthood such as marriage, children, and home ownership.
But the study also found a number of similarities between Chinese members of Generation Y and their counterparts in America and other countries, including their desire for work-life balance, commitment to social responsibility, high expectations for themselves, and their superlative technology skills.
A comprehensive talent management plan
For now, of course, members of Generation Y can’t afford to be as demanding in their expectations of employers. With the world economy in the doldrums, this certainly is no time for young people to behave arrogantly. They must learn patience. They will have to put their long-term dreams on hold and seize the best career opportunities they can find for the time being. But that doesn’t mean that employers should take advantage of the depressed job market and try to transform Generation Y into a bunch of regimented workaholics. Once the economy bounces back, Generation Y will likely be as demanding as ever and apt to switch jobs freely again.
So the wise company will take steps now to make the workplace so appealing that young people will want to stay put even when jobs become more plentiful. That means designing a comprehensive talent management plan specifically for Generation Y. First and foremost, that plan should include providing meaningful, engaging jobs and plenty of opportunity for career development through training, mentoring, and rotating job assignments. These young people have little patience with boredom and expect work to always be fresh and challenging. Give them promotions as often as they are deserving of such career mobility, and they will show their appreciation through greater loyalty.
Regular communications will also be an important retention tool in the talent management plan. Members of Generation Y require much more attention than previous generations. They thrive on frequent feedback and praise but don’t always react well to criticism. Annual performance reviews aren’t nearly enough; this generation wants feedback after every assignment and special recognition when a job is especially well done.
Employers also should be prepared to provide Generation Y with close guidance and clear directions. These young achievers can get the job done but often need tasks and responsibilities spelled out in great detail. Independent thinking and decision making simply don’t come naturally to a generation, whose parents have provided support throughout their lives and shielded them from many of the world’s challenges. Managers may feel like babysitters at times because they will have to provide more hand-holding than they’re used to – at least initially – to guide this generation through their projects and other assignments. But gradually, employers should be able to wean their young hires of such close support by encouraging them to think more for themselves before seeking help from colleagues and supervisors.
A different set of values
In recruiting and retaining Generation Y, employers will find that work-life balance resonates very strongly with this demographic group. While older generations also strive for work-life balance, Generation Y will accept nothing less. Indeed, that may be one of the greatest challenges for companies. Managers must figure out appropriate ways to accommodate young people’s need for balance in their working lives, such as through telecommuting and flexible hours, while still getting the job done.
For this generation, face time in the office is meaningless. They want to be able to work to their own schedules, whether at home, in the office or even at the beach. They also prefer a casual workplace, where people dress comfortably and enjoy breaks to listen to their MP3 players or to visit their favorite online social-networking sites. But there obviously must be limits to flexible work styles. Employers will have to make this generation mindful of the reality that personal interaction between teammates is essential and while work-life balance is important, the top priorities always are meeting project deadlines on time and serving clients and customers well. The best approach: Be willing to provide flexibility whenever possible so that Generation Y will be willing to give its all when overtime is required for a pressing assignment.
Finally in recruiting Generation Y, companies should strive to create an employer brand based on a culture of ethical behavior and a commitment to social and environmental responsibility. Virtue and integrity matter greatly to Generation Y, which prefers to work for companies that demonstrate a commitment to make the world a better place. In fact, many young people will expect employers to give them time away from their jobs to do volunteer work in local communities or take a sabbatical in a Third World nation for a social or environmental project. Such programs will not only create a stronger bond with young workers, they also will enhance an employer’s reputation with many of its stakeholders.
Achieving generational harmony
Given Generation Y’s distinctive traits, companies will inevitably face generational tensions in the workplace. Typically, older generations view Generation Y as spoiled, lazy, and entitled. For their part, young people tend to find bosses rigid about face time in the office and technologically inept.
How to promote generational harmony? Communication and compromise will be essential. Companies must encourage frequent communication to overcome misperceptions and motivate the generations to make accommodations. Through generational counseling sessions, younger workers will likely come to appreciate the experience and maturity of older generations and want to share their technology skills with their colleagues. Similarly, older managers should begin to understand that Generation Y actually has a strong work ethic. It’s simply a different work ethic in that young people believe work can be done anywhere, anytime. Employers also will need to help the generations find a happy balance when it comes to styles of communication. Older workers should make an effort to become more comfortable with instant messaging and texting, while Generation Y must spend more time in face-to-face interactions with colleagues.
There’s little doubt that many employers will likely find this new species of worker a bit overwhelming. But it is actually a fascinating generation with great potential to change the workplace for the better. In time, smart managers and their young employees will learn to get along and make accommodations. Generation Y will eventually have to temper some of its grand expectations, while employers will need to be creative in keeping these clever, valuable young workers engaged and motivated. The difficult job market may actually prove to be the perfect opportunity for both employers and Generation Y to get to know each other better and to start the adaptation process.
The authors wish to acknowledge the contribution of Verena Fussberger, Leadership Strategy Services Specialist, based in the Hamburg Office, who herself belongs to Generation Y.
About the Authors
Catherine Zhu is a consultant with Egon Zehnder in Hong Kong. She was born in China a decade before Generation Y. With a technology management background, she has focused her consulting work on organization transformation, leadership succession, and talent development in the IT, Internet, and consumer sectors.
Magnus Graf Lambsdorff was a consultant at Egon Zehnder from 1995 to February 2016. For several years he was head of the firm’s global Leadership Strategy Services Practice. He advised clients from the high-tech and telecommunications industries, as well as from the digital economy and the private equity sector.
ILLUSTRATION: ANDREW BAKER
