The next engineer, software developer, pharmacist or freelance writer you hire will likely be a millennial. With millennials, American adults ages 19-35 in 2016, rapidly surpassing Gen Xers and the Baby Boomer generation as the largest portion of the American workforce, there will be a subtle, but noticeable shift in the way companies attract and retain top talent. Each generation brings with them a set of working preferences—where they want to work, for whom, how they want to work, what they want to work on, and for how much. While investment bankers were icons of success in the 1980s, startups, technology companies and organizations disrupting the status quo, top the list of desirable employers for millennials.
As millennials enter the workforce in record numbers, here are three trends to watch that will change the way companies work, and shape the future of the job market:
- Reputation race and the authenticity test – We live in an era of crowdsourced reputation, where the collective wisdom of the crowd provides input into everything from the restaurants where we eat to the products we buy to the professional services we seek and the politicians we vote for. As the first digitally native generation, millennials have grown up networked to social media, online reviews, and instant access to global information. With data easily available, savvy job candidates can quickly learn about everything from an organization’s leadership, mission, and priorities to their reputation, employee experience, salary ranges—and even prospective interview questions. Independent online reviews have become the go-to source for millennials for information about companies, jobs, and bosses. If online reviews from disgruntled restaurant patrons or hotel guests can dissuade future customers, imagine how first-hand reviews from an employee might form a lasting impression about an organization’s reputation, impacting their ability to attract top talent.
It’s the organizations that have been at the forefront of the digital evolution that are rapidly adapting and capturing the attention of millennials who use their products or services. Fortune’s first list of the 100 Best Workplaces for Millennials was published in 2015, and the outcomes were surprising. If you expected to see Google top the list, think again—they came in at number 25. The top ten companies earning the great workplace title (and reputational boost) were not the household technology names that have become synonymous with millennial talent—Google, Facebook and Apple. Instead, you’ll find a collection of less-know but authentically rated companies. The inaugural list was determined by employee reviews, providing first-hand insight into the work environment, culture and employee experience.
While the list is still in its infancy, the message is clear, this generation of workers can’t be swayed by large salaries and Fortune 500 might alone. They want a working environment suited to their skills, work style, and career goals. Having strong global brand recognition is also not enough to entice millennials. Over half of the companies on the top ten list are private companies and are not well known. The status quo and play it safe mentality that can come with the pressure of public companies may be a barrier for many millennials who are now turning to innovative companies less beholden to the short-term ebbs and flows of quarterly results.
Breaking through the constant barrage of information means that organizations can no longer rely solely on professional advertising, marketing or competitive benefits packages to entice top talent. Rather it is the actual experience employees have with the company—and the online reviews they share—that bring authenticity to a company, brand, product or service. Online reviews are the new incarnation of “word of mouth”, providing a window into the employee experience and an aggregate rating of the employer’s reputation. While corporate reputation is going to become even more critical for organizations looking to attract top talent, mission statements and corporate branding alone won’t be a draw. Organizations will actually have to live their principles if they are going to pass the authenticity test with millennials.
- Fewer politics, more flexibility – Millennials have witnessed the failure of the some of the largest institutions shaping our modern economy, from the Great Recession and the fall of global banks to the gridlock in Washington and near shutdown of the federal government. The results of the Pew Research Center’s surveys on “Millennials in Adulthood” show that millennials have little faith in traditional institutions, with 83% of millennials agreeing with the following statement: “there is too much power concentrated in the hands of a few big companies.” This coupled with the 2015 Gallup “Confidence in Institutions” survey results show that confidence in corporate American is waning, ranking only slightly higher than congress—slotted in the last place.
Millennials have grown up less attached to traditional institutions (whether they be religious or political institutions), and they are leery of investing in the stock market, cynical towards politics, and allergic to hierarchy and bureaucracy. The organizations that millennial talent tends to gravitate towards all have one thing in common: they enable millennials to express themselves. Whether it is through meaningful purpose-driven work or limited bureaucracy and no pressure to conform, millennials want to be themselves, learning and growing with their job. The millennial generation views work through a slightly different lens, opting to first ask: will the working environment be entrepreneurial and unencumbered by politics?; is the work meaningful, societally relevant, or constructively disruptive?; and, is the organization supportive of my growth?
As employees, millennials want will gravitate towards environments that enable them to tap into technology and social networks to source new ideas. They want to use their knowledge and networks to tackle problems, leaning on the wisdom of the crowd to help curate opportunities and develop collaborative approaches to intractable problems. Millennials want to work the way they shop—online, anytime, from anywhere, and on their phone (and then they may share their experiences or best practices with their networks). While an open office concept may have been revolutionary in its day, the mobile office (anywhere, anytime) will become the prevailing norm. Work from home options and hoteling offices are already taking over companies—and even government agencies—as lean business models and limited budgets change the way organizations work.
Socially conscious, impact-driven millennials will be drawn to companies and jobs that appeal to their sense of purpose, provide them flexible opportunities to grow, and are free from office bureaucracy.
- “Gig” economics – Millennials are at the center of the rapidly growing gig economy, whether as consumers opting out of owning cars in favor of car sharing and bike sharing options, or as freelance workers and entrepreneurs leaving behind traditional office environments in favor of shared working spaces and short-term job assignments. They are fueling a new wave of self-employment that is a response to both a dismal job market and a preference for an entrepreneurial, flexible way of working.
Millennials entering the workforce during the great recession (2007-2009) were faced with stagnant wages, layoffs, and dismal job prospects. With the Bureau of Labor Statistics clocking unemployment rates above 10% in 2009, the number of part-time and underemployed workers has been on the rise since the great depression. Limited full-time job options and minimal opportunities for career advancement (despite an increase in student loan debt) have led millennials to embrace short-term gigs, opting to take on short-term assignments and micro-work—or gigs, as they are commonly referred to—to earn a living. With millennials staying at home longer to conserve funds (and for many, to pay off student loan debt), the prospect of working from anywhere, at their own pace, has an appeal. This coupled with the growing number of online businesses that make microwork readily available has fueled the rise of the gig economy.
As the job market rebounds, many millennials used to the culture of the gig economy are opting out of a salaried job and all of the benefits that come with it—healthcare, retirement plans, paid time off—to go their own way. Millennials that can’t find organizations free from office politics, confining cubicles, and stagnant thinking, have turned to freelancing, setting their own work environment and schedule. With startups such as Uber and Fiverr, anyone can freelance from almost anywhere, bringing added flexibility to when and where you work.
Adapting to disruption
Whether it’s finding a new generation of government employees and civil servants to restore trust in government agencies or attracting top MBAs to Fortune 500 companies, the talent war is coming. As millennials overtake the American workforce, organizations that embrace the shift and adapt, will survive. And organizations that don’t will lose their appeal and ability to attract top talent. Without a pipeline of top talent to fill leadership roles and future business needs, innovation will slow and bureaucracy will rule. Employers don’t have to philosophically agree with the idiosyncratic way millennials work or with their preferences, but they do have to adapt. And the organizations that are successful at attracting—and retaining—top millennial talent will win the talent war.
About the author: Daniella Foster is Co-founder of the Emergent Leaders Network and Director of Corporate Affairs and Science Communications at Mars Symbioscience. Follow her on Twitter @deeindc.