By 2030, millennials will account for 75% of the global workforce, according to IBM.
But studies are already showing that 43% of current millennials envision leaving their jobs within two years of being hired and only 28% seek to stay beyond five years, according to Deloitte. If that’s how millennials are feeling about their employment in 2018, what will the turnover rate be like in 2030, at a time when most businesses are relying on a millennial-driven workforce?
For employers to crack the code to millennial happiness in the workplace, addressing the issue of disengagement is a good place to start.
Disconnected workplaces have been linked to nearly 40% higher rates of absenteeism, 60% higher rates of avoidable errors and 50% in voluntary turnover, according to The Harvard Business Review. Other negative impacts disengagement has on a workplace includes lower productivity, lower profitability and higher levels of workplace stress.
“Engagement in work — which is associated with feeling valued, secure, supported, and respected — is generally negatively associated with a high-stress, cut-throat culture” – HBV
Another study shows the turnover costs associated with recruiting, training, lowered productivity, lost expertise, and so forth, are significant – approximately 20% of the employee’s salary.
Some companies are aware of the damage a disengaged workforce has on its staff and have introduced financial benefits and perks to increase staff motivation. But more will need to be done to satisfy the needs of the growing force of millennials.
Here are some factors that are proven to increase millennial loyalty.
Factors That Increase Millennial Loyalty
According to the 2018 Deloitte Millennial Survey, business focus, salary, work flexibility and a sense of purpose appears to strongly influence the length of time millennials intend to stay with their employers.
Business focus – 51% of millennials hoping to leave within two years of their employment say one of the main reasons is that their companies prioritised too much on making profits. Profit-driven workplaces are usually associated with a high-stress, cut-throat culture, as described by the Harvard Business Review.
Salary – On the other hand, millennials consistently show that they believe in employers “sharing the wealth” in the form of high salaries. It also reflects that maturing millennials may be saving for their children’s education and struggling to purchase big-ticket items—especially housing, the cost of which has far outpaced salaries globally.
Work Flexibility – 55% of millennials who plan to stay with a company for over 5 years, say work flexibility is their main priority. Not only do millennials appreciate not being tied to strict hours or locations, they also value the trust their employers demonstrate in granting that flexibility. Thus, highly flexible working arrangements enhance the degree of employee loyalty.
The study also shows that millennials believe that employers who are offering flexible working environments are achieving greater profitability and providing work environments that are more stimulating, healthy and satisfying.
Having a sense of purpose – Millennials want to interact with a business and contribute to its success. In fact, for 6 in 10 millennials, a “sense of purpose” is part of the reason they chose to work for their current employers. Deloitte research shows that among businesses where millennials say there is a strong sense of purpose, there is significantly higher reporting of financial success, employee satisfaction, and staff retention.
Another major factor that employers seem to be unaware of, is the power of mentorship in the workplace.
Research shows that millennials thrive best when they have a work mentor who can provide guidance when needed, celebrate their wins and listens to their rants and grievances. A work mentorship creates the opportunity to keep the employee engaged and connected in the workplace, which would tackle the issue of disengagement which is present in many current working environments.
A big part of fostering happiness in the work environment means creating opportunities for meaningful connections between co-workers. In fact, a study by PGi, shows that 88% of millennials want to work in more “social” workplaces and 70% of those millennials want the people they work with to function as a sort of second family.
In LinkedIn’s Relationships at Work study, work mentors made millennials, particularly the younger subset of 18 to 24, happier and bolstered their spirits and performance.
Employers must remember and understand that this tendency to connect with other people comes from a generation who grew up with social media, constantly sharing their lives on Twitter and Facebook. While baby boomers are familiar with traditional 9am to 5pm working weeks, most millennials have spent most of their employment in part-time gigs with odd hours. Boomers are used to going home to established relationships and don’t have interest in building friendships while at work, whereas millennials are the opposite.
This tendency to connect with others and share feelings and thoughts, makes millennials more likely to speak up about job satisfaction or dissatisfaction, according to the LinkedIn survey.
Companies that keep all these factors and stand-out statistics in mind, will almost certainly find themselves with a more motivated, productive and loyal workforce. But to do so, employers will need to meet the demands and offer higher pay, flexibility and mentorship programs.
If they choose not to, they could see a large segment of their workforces heading for the exits.