How To Turn Millennial Workers Into Your Competitive Advantage (And Stop Complaining)
Traveling the country in recent months, visiting with clients and working on transactions, it seems every middle market CEO I visit is struggling with changing labor markets: skill shortages, rising market compensation, higher-than-desired turnover.
Then, once we’re on the topic of employees, the conversation inevitably turns to millennials; every boss seems to have his or her own story about worker entitlement, disloyalty, lack of social graces or just plain cluelessness. And, to be sure, running a boutique investment bank that hires young professionals and seeks to turn them into seasoned deal pros, I can relate; not every youngster hired at Verit Advisors in recent years has been a dream employee.
But, as with any people problem, the solution often lies in putting ourselves in the shoes of the other person. And I’ve gotten some great help doing that recently by talking with Diane Swonk, one of the country’s best-known and smartest business economists, running her own firm now after long tenures at Mesirow Financial and at Bank One and its predecessors. Bluntly put, while the rest of us have been sitting around complaining about young workers, Diane has been researching and thinking, and she helpfully provides an economic and cultural context that could help business owners turn millennial workers into a competitive advantage.
–The oldest millennials are turning 34 this year, graduated without much debt and got jobs prior to the financial crisis, when entry-level wages were robust. They’re beginning to have children and, after a long period of renting, buying homes and settling down. They’re also less likely to irk you. A happy story.
–Their younger siblings came of age during a very different time. They were locked out of getting internships and minimum wage jobs, which left them without the “soft skills” (more on this term below) older generations were able to attain when they were in their teens and early 20s.
–They took on historically high levels of debt to gain an education at the same time that entry-level wages were cut. In fact, the gap between entry-level wages for college graduates and overall wages widened to a post WW I high in the wake of the crisis and years that followed.
–Employers cut training programs during the crisis, and have yet to reinstate many of them. That left younger workers, with lower starting pay, feeling as if baby boomers pulled up and hid any ladder millennials might climb. The result is reduced loyalty among younger workers.
–Lower entry-level wages made free time relatively more valuable, further undermining incentives to work harder, and to be loyal to employers.
In this light, millennials seems less like the spoiled, lazy brats of stereotype and more like rational economic actors, stuck in a bad situation. How to win, I asked Diane, with the different and difficult young workforce:
–Realize the possible upside: millennials are the most educated and diverse generation of workers we’ve ever seen. They’re also the most tech-savvy. This means that they have tremendous human capital to tap if employers adjust how they manage this workforce. How? We think of them as being accustomed to a high level of freedom and thus may provide them a less-structured workplace. Wrong. They need structure. A big project might require six mini-deadlines, with a supervisor checking in, instead of one at completion. Hours might best be set rigidly and enforced, even if you’re accustomed to not tracking the comings-and-goings of middle-aged employees. And if they want to text rather than email with you, that’s a small concession, right?
–They need time and mentoring to pick up the soft skills they missed out on during the crisis. They may find that they would benefit from their business having access to a mentoring software from somewhere similar to Together Platform so they are able to learn all they need to know about how to make them succeed in their chosen career. Many millennials are accustomed to being surrounded by peers (and indulgent parents) and don’t know to moderate their behavior around “grownups.” Rather than suffer regular cases of TMI (too much information), the first time an employee begins inappropriately regaling the office with after-hour escapades, take him aside and explain what is and isn’t a good office topic. Some will need to learn how to manage up, finding a balance between open disdain for older adults (not appreciated) and being Eddie Haskell-obsequious.
–Teaching of soft skills is trendy in education circles and one might guess, therefore, that the definitions of such skills, how to help students attain them, and how to measure that attainment has all been heavily researched and settled. Sadly, no. The movement is in its infancy. So, to avoid spinning your wheels, your efforts in this realm should be practical (around job performance, not building character), your ambitions modest (if ten teachers couldn’t reach this kid, can you?), and somehow measurable; if nothing else, keep notes: “asked Joe Jones to come to work on time, gifted him with an alarm clock,” not necessarily to build a termination case but to remind your busy self what you’ve tried and what works.
–They need to see a path to success, which means re-instituting and rethinking training and professional development programs. This doesn’t mean a six-week offsite, or anything quite that elaborate. You know who your best teachers and mentors on staff are, and organizing either formal or informal talks by them on work skills and how to get along at work might be a start. Institutions outside your four walls may offer relevant training and you can figure out who’s time and dime it ought to be on.
–Millennials are overburdened with debt, which suggests a bargain: set up a program, as some companies have been doing, to help with student loans and structure it to improve loyalty and reduce turnover (similar to an earn-out, with a claw-back). You can even integrate this program into your existing payroll system. Whether you outsource your payroll to a payroll service such as Cloudpay or manage employee wages in house, helping staff to pay back debts can prove highly lucrative.
–Accept that your business doesn’t have the option of skipping a generation of employees. Once you’ve decided to tackle this challenge, as opposed to grumbling about it, you’ll probably discover methods and shortcuts the experts have yet to see. (Please share them when you do!)
I’ve always admired companies that turn the broader market’s HR problem into their strength, such as the savvy trucking company and the step-ahead-of-the-competition grocery chain using employee ownership to vastly reduce turnover and improve customer service. Millennials are just the latest challenge and opportunity.