One out of every three U.S. workers is a member of the millennial generation. In fact, millennials have replaced Generation Xers as the largest segment of the U.S. labor force, according to a recent Pew Research Center survey. There are currently 53.5 million working millennials, a number that will only increase as more job-seeking students graduate from college. Another trend adding to the size of the millennial worker population: over the past five years, half of all new American immigrants have been millennials.
This drastic shift in the workforce requires companies to change how they manage and reward talent. The policies and incentives that worked for past generations are no longer effective, and companies that fail to adapt may find themselves facing a shortage of talented and motivated workers.
To maintain a strong and productive workforce, employers need to understand how to motivate, reward and recognize the millennial generation of workers. However, it doesn’t appear that employers are doing a good job in this area. For example, research from Blackhawk Engagement Solutions reveals that only 40% of millennials surveyed are happy with the rewards and recognition that their company offers. One reason for this may be that of those millennials surveyed, 33% said they were not currently eligible to receive any of their company’s bonuses and rewards. Though the report did not say why these workers were excluded, it could be for lack of seniority or lack of full-time employee status.
Among those who receive rewards:
- 43% aren’t eligible for employee recognition rewards
- 48% aren’t eligible for wellness rewards
- 67% aren’t eligible for spot rewards (rewards given on-the-spot)
- 82% aren’t eligible for safety rewards (for reporting potential safety concerns)
Company policies are a necessary part of business. But when they are outdated or exclude a significant portion of the workforce, perhaps they should be changed. Millennials like instant gratification. The concept of paying dues and waiting your turn, which may have been acceptable to earlier generations, does not appeal to these workers.
Blackhawk’s research also reveals that millennials like to receive recognition in a different way than other generations. They prefer personal and formal recognition from managers and executives. Their preference for how they receive this recognition is ranked in order as: (1) receive a personal email from their manager, (2) receive a personal email from a company executive or (3) receive a team email from their manager or other company leader.
And it seems most companies do not understand this preference. Of the millennials surveyed, about 40% said they usually received recognition through a companywide announcement, and 27% said they usually received no formal recognition at all for a job well done. Companies should make it a policy to give personalized and formal kudos in addition to regular avenues of recognition. A personal email does not cost anything (but a small amount of time) but can make a big difference in job satisfaction and employee retention.
Recognition of Purpose
Formal recognition for accomplishments is not the only way to engage and reward millennials. This generation also feels a sense of fulfillment when they think that their work is making a difference. And this is another area in which companies need to recognize what’s important to their workforce and make the necessary changes.
The global Deloitte Millennial Survey found that among millennials working in developed markets such as the United States:
- Only 48% feel their organization is committed to being sustainable.
- Only 42% think their organization works hard to minimize the environmental impact of their operations.
- Only 45% think their organization’s leaders are helping to improve society.
- Only 43% think their organization behaves in an ethical manner.
- Only 40% think their organization operates in an open and transparent manner.
Millennials want to earn a good salary, and they want their companies to create jobs and expand prosperity. However, unlike previous generations, they are more inclined to also care how the organization affects society on various levels. They also expect their leaders to be honest and operate with integrity. When they don’t think the organization’s actions are beneficial to society, they are less likely to want to remain with these organization, regardless of how well they are compensated.
Recognition of Input
In addition, millennials want to recognize their role in defining their jobs and shaping the future of the organization. Deloitte’s research found that only half of millennials believe their companies are innovative or even reward them for thinking of new ways to solve problems. Also, only half of millennials think their companies are providing opportunities for them to sharpen their skills and develop professionally.
This lack of engagement will cause organizations to lose the millennial employees they have, and also fail to attract top millennial job candidates. In another instance of the differences between this and previous generations, 70% of millennials surveyed said that at some point in their careers, they plan to work independently as opposed to working for a traditional company. Unless companies commit to creating a culture that is attractive to millennials, they will be faced with workers jumping ship to start their own businesses.
The Bottom Line
Millennials are now the largest segment of the workforce, and employers must understand how this generation differs from earlier generations in order to effectively engage and motivate them. Some changes, like writing more personal recognition emails, are free and relatively painless. Other changes may require shifts in company culture so that millennials can feel they are making a difference and working for an ethical organization.