How to Make Your Organization More Attractive to Millennials
There is no universal rule for how often promotions should be granted, but for the typical organization, the bare minimum is every two years.
In contrast, 40 percent of millennials—the generation born between the early 1980s and mid-1990s—expect a promotion every one to two years. According to survey data reported in this SHRM post, millennials are also more likely than baby boomers and Gen-Xers to say that raises, promotions and bonuses should be provided more than once a year.
Experts agree that a high level of career impatience is a defining characteristic of the cohort often referred to as “Generation Me.” There’s no shortage of anecdotes from exasperated managers grumbling about entitled millennials seeking promotions before they’ve “paid their dues.”
It can be tempting to quickly dismiss this desire for a fast-track career as a kind of Instagram-fueled need for instant gratification. After all, millennials (now the largest generation in the U.S. workforce) switch jobs more often than older generations, and at a rate that ends up costing the U.S. economy $30.5 billion per year.
However, new data suggest that if organizations really want to retain and engage millennial workers, this career impatience deserves some serious investigation.
Millennials, Promotions and Retention: What’s Actually Happening
The internet is flooded with studies and surveys devoted to deconstructing the millennial mindset. The term itself, millennial, is more than 30 years old. It’s been 12 years since psychologist Dr. Jean Twenge’s book, Generation Me: Why Today’s Young Americans Are More Confident, Assertive, Entitled—and More Miserable Than Ever Before, started making headlines.
But over the years, much less has been shared in terms of what actually happens when the career expectations of this ambitious generation aren’t met.
This is one question we sought to answer with our latest Visier Insights research report, which leverages an aggregated database of 1.5 million U.S.-based employees from over 60 companies (a subset of the overall Visier Insights database). For this report, we divided workers into two groups: millennials (those born in 1983 or later) and non-millennials (those born in 1982 or before).
The database yielded some key insights related to millennial career impatience:
Millennial managers who have not received a promotion since the start of their employment leave at a rate that is 5.2 percentage points higher than average. (This is significant, given that an increase of turnover by just 1 percent in a company of 30,000 employees can cost $32.9 million per year, according to Deloitte data.)
- Comparatively, not receiving a promotion has a nominal impact on non-millennial managers, causing them to resign at a rate that is only 0.57 percentage points higher than average.
- Millennials who are managers resign two-thirds less often than millennials who are not managers, with an 11.9-percent resignation rate compared to 36.2 percent.
- This manager effect is greatest for, but not limited to, the younger generation: Non-millennial managers also resign at a lower rate than their non-manager counterparts—about half as often, with an 8.8 percent resignation rate, compared to 21.7 percent.
These findings confirm that millennials’ high career expectations are having a real impact on U.S. organizations: lack of promotion opportunities are a key driver of millennial resignations.
However, when we place these data within a broader context, a more nuanced view of these accelerated career ambitions—and what organizations should do about them—emerges.
Arguing about whether millennials are generally entitled or empowered is about as futile as engaging in a Yanny vs. Laurel debate. In truth, there is evidence that this generation can be simultaneously defined by divergent traits. As the work of research scientists Jennifer J. Deal and Alec Levenson shows, millennials are both entitled and hardworking, needy and independent, committed and peripatetic.
In order to effectively address this career impatience, a more helpful approach is to move away from the labels and focus instead on the motivations that potentially have the most leverage for employers. The evidence suggests there are two significant drivers fueling millennials’ career ambitions: personal development and income security.
Millennial Career Driver #1: Personal Development
Seeking promotions may be just one of the many ways that millennials are trying to reach a higher goal: personal development.
According to a 2016 report from Gallup, the only aspect of retention that “separates millennials’ needs from those of non-millennials” are opportunities to learn and grow. And the main generational difference—according to a 2017 Best Workplaces for Millennials ranking published by Fortune—”boils down to higher expectations for the level of personal fulfillment and connection [millennials] want from work.”
Findings from a millennial behavioral assessment conducted by Deloitte reveal that “while a significant number of all generations have aspirations to be a leader, leadership is not millennials’ only brass ring. Millennial respondents are more likely than other generations to aspire to be a top performer, expert or innovator.”
Data from our Insights report support this notion that, for millennials, career development is about both horizontal and vertical growth: Overall, millennials change jobs within a company almost twice as often as non-millennials (22 percent compared to 12 percent). This finding indicates that workers who are earlier in their careers—managers, in particular—are more likely to experiment and “try out” more roles.
This desire to find a true calling was reflected in a recent cinematic Courtyard by Marriott TV ad targeting the Millennial demographic, which tells the story of a young woman in a creative profession interacting with locals in exotic lands. The takeaway for employers is obvious: for millennials, career advancement is about more than climbing a ladder.
Millennial Career Driver #2: Income Security
In the midst of a tight labor market, it can be easy to forget that the U.S. experienced the worst economic recession since the Great Depression between December 2007 and June 2009. During this time, millennials were likely either seeing parents or colleagues getting laid off, trying to enter the job market, or getting laid off themselves.
Evidently, this increased perception of expendability has had a lasting impact.
“Pressing for higher pay or leaving for higher pay and better opportunities doesn’t mean millennials are impatient, it means they’re prudent,“ writes the Center for Creative Leadership’s Jennifer Deal in this WSJ piece. “When they are told to just wait and pay their dues because they’ll have a long career with the organization and eventually be paid well, they don’t believe it. They don’t trust the organization to keep the promise.”
On top of this, the average student-loan debt has more than tripled in the last 20 years. Clearly, factors other than mere entitlement are motivating millennials to get raises and promotions at a faster rate.
How to Nurture the Millennial Growth Mindset
Over-focusing on promotions as a retention lever carries a high level of risk for organizations. Move people up too soon, and employees may become overwhelmed or (arguably) develop a sense of entitlement. To nurture the millennial desire for career growth and security in a way that benefits the entire organization, employers can focus on these key areas:
- Think outside the promotion box. Career advancement encapsulates more than just promotions. Help employees define what career advancement truly means to them—whether it’s really about advancing to a top leadership position or actually about deepening professional skills.
- Allow people to wear multiple hats. By performing different roles, people can gain perspective on several functional areas and see where their personal aspirations fit into the bigger picture. Exposing millennials to different types of roles in the form of temporary assignments can also help them determine where their skills can be of greatest benefit to the organization and how they can foster their own growth.
- Demonstrate employee investment earlier in the career stage. Review top and critical talent and look for stagnation in promotions. Consider putting long-term incentives that would traditionally be available at higher pay grades in place at lower levels of management.
Millennial Ambition: A Tale of Two Wolves
An old Cherokee legend speaks of the two wolves who fight within a person: One represents characteristics like serenity and humility, the other represents false pride and ego. The one who wins is the one you feed.
In the same way, the two wolves are at play in the process of seeking a promotion: One represents the need to prove self-worth and superiority, and the other represents the pursuit of personal development through career growth. When organizations deliberately (and meaningfully) foster the development needs of millennials, a more-humble wolf gets fed, one that focuses on learning from mistakes and achieving positive outcomes.
With an organizational focus on career growth (both horizontal and vertical) employers can achieve a not-so elusive goal: millennial commitment and productivity.
Dave Weisbeck is the chief strategy officer at Visier Inc.