Young professionals can be flighty, and organizations struggle to find strategies that entice them to stay. Millennials may be notorious for their need for constant recognition, but they’re now the largest generation in the U.S. workforce. By 2020, Millennials and Gen Z will comprise 66% of U.S. labor, yet nearly half of Millennials plan on leaving their job within the next two years.
Turnover costs a company between 20% and 200% of an employee’s annual salary. So how do organizations keep young grads from jumping ship? How can employers help early-career employees envision a long-term future together?
Consider these three ways to create a culture where young employees and leaders thrive:
1. Never compromise on character.
Because of increasing work hours, many young people look for belonging in the workplace. Millennials spend more time working than any modern generation and often view their co-workers as a second family.
How does a company create the kind of culture young professionals want? Start by simply doing the right thing. Ultimate Software, for example, earned the top spot on Fortune’s 100 Best Workplaces for Millennials list. One employee told Fortune that the company’s moral scruples were a selling point for staff.
Millennials and Gen Z want to feel proud of their work family. They won’t say “no” to performance rewards, but many of them simply want to work with a team that is honest, has integrity, and cares about the people it serves. They look to company leadership when making those judgments, so be sure executives demonstate moral backbone. If that means firing a disrespectful or dishonest client, so be it. The long-term payoff in terms of a happy and productive staff will likely negate any losses.
2. Create internal awards.
No matter how often you praise your employees, you can always do it more. Nearly eight in 10 Millennial and Gen Z workers say more recognition rewards would make them more loyal to their employer.
Blend this strategy with the character-oriented one. Justin Bell, CEO of management and technology consulting firm Credera, gives an annual award to the employee who best embodies the company’s core values. Alex Moore, the company’s director of talent acquisition, won this year’s award based on her work ethic, integrity, and humility.
Give young employees something to strive for. Whether the cadence is annual, quarterly, or monthly, an internal awards schedule ensures top performers receive regular recognition from their peers. Look for fun, low-cost rewards to attach to it: Maybe the winner gets an additional day off, a prime parking spot, or a one-on-one lunch with the CEO.
3. Offer the right benefits.
While benefits are always key to attracting talent, not all benefits are created equal. What kinds of benefits keep young people around? Increasingly, they want competitive pay, ongoing professional development, flexible schedules, and healthcare benefits.
More than previous generations, non-salary compensation drives Gen Z’s employment decisions. Tom Carter, the national vice president of Workforce Health Consulting Group and Kaiser-on-the-Job at Kaiser Foundation Health Plan, Kaiser Permanente, argues that while stronger benefits can cost more upfront, they reduce costs via attrition.
With healthcare costs rising, young professionals see strong benefits packages as a major priority. Because young people comprise such a significant portion of the workforce, organizations need to protect their young leaders’ health and wellness. Insurance coverage, health savings accounts, and discounted gym memberships can go a long way toward becoming an entrenched part of an employee’s life.
Don’t discount the value of “free” benefits, either. Millennials cite a lack of professional development as a major motivation for leaving their employer. Head off feelings of stagnation with mentorship and training. For developing job-specific skills, more formal education may be necessary — think of it as an investment in your company’s future.
4. Make moving on an open discussion.
If you’re sick of conducting exit interviews with Millennials, Aaron Levy, founder and CEO of HR consultancy Raise The Bar, has an idea: Hold “stay” interviews instead. In contrast to exit interviews, the sort of meetings Levy has in mind are proactive and focused on employee needs.
Levy’s advice came after one of his Millennial clients, Scott, left his employer the same day he received a promotion. Although Scott had brought up his growth and development with his manager multiple times, Scott felt his boss didn’t have the time or desire to discuss his future.
Every employee, from administrative assistants to account executives, deserves time to discuss his or her growth with you. If you can’t afford to take everybody out to lunch individually, what about a walk around the block? Simply asking people where they see themselves in a decade is a great way to open the discussion.
Contrary to popular belief, young professionals want professional stability, and they’re willing to commit to the right organization. Many young people have signaled what they want with their feet, and companies have paid for poor retention with their pocketbooks. Companies need to build cultures that champion a mission and invest in people. They’ll be paid in kind.