Remember the good ol’ days when employees stayed with a firm for 30 years, then retired?
OK, you probably don’t. Most of us entered the workforce as pensions and retiree benefits were disappearing in favor of Medicare and 401(k) accounts. Average tenure for employees continues to decline, with employee loyalty on the wane. This dynamic is most prevalent in the younger workforce. Firms are becoming increasingly concerned that the time and money they spend to hire and train new employees will be wasted when those workers take their skills to a competitor. No one likes to see investment dollars walking out the door.
The current reality is that the 32-and-under workforce (the Millennials, or Gen Y) only knows 401(k)s, has always had benefit portability through COBRA, and sees few reasons why anyone would commit to an employer for five years, never mind 30. The long-term guarantee of pensions and benefits is disappearing. Therefore, young workers are looking for career progression, development opportunities and meaningful work. According to a 2010 Pew Research Center report, nearly six in 10 employed Millennials said they had already switched careers once. This group is mobile and very willing to change employers if they perceive a better opportunity to achieve their aims at another firm.
So is the only option not to hire the young and less experienced? Of course not.
Challenge your assumption that you are hiring, investing in and losing young talent. A quick hire-to-turnover analysis focused on your young workforce will tell you quickly if you actually have a problem. You might be losing the exact people you wouldn’t want to have stay. That’s perfectly fine. You can accept the loss of fairly recent hires if you’re keeping the ones you really want.
You will not keep all of your young talent. But here’s a little secret: Every firm that hires young workers is going to have this problem. The firms that win the talent war will be the ones that are proactive in evaluating and determining who they want to retain. These firms will then put strong retention programs in place to keep those young employees that fit the skill sets, growth plans and unique culture of their firms.
This is a team-building approach not unlike the training camps and final roster processes used by the NFL. Each year, the rookies are invited to camp, and they are evaluated along with the veterans as the coaches determine the talent needs for the team. Top talent is given starting positions and more lucrative contracts. Strong rookies earn starting positions, while other players do not make the cut.
Once a firm has identified its top talent in its pool of newbies, retention strategies can be put into action. Strategies should focus on career tracks and include mentoring and frequent feedback. About 73% of respondents to the Gen Y Workplace Culture survey, by Career Edge Organization, cited continuous, informal performance feedback from their manager as a leading quality of great workplaces. The respondents also valued transparency in communications, doing meaningful work and being rewarded both financially and through recognition.
Most firms set annual goals through a process of cascading goals, performance reviews and compensation tied to these results. Unfortunately, this is not enough structure and feedback to engage the young workforce. This process needs to be taken a step further through the effective use of Individual Development Plans (IDPs). All employees want development opportunities, but unlike your 40- and 50-something employees who can figure out development from a list of goals, this younger work group is used to structure.
By providing IDPs to your young workforce, you will gain a reputation as an attractive potential employer. According to a survey by the Institute for Corporate Productivity and American Society for Training and Development, more than half the participants surveyed believed the Millennial generation requires specialized leadership development programs, yet just 15% reported that their companies had such a program. An effective IDP process starts with the cascading goal process to connect the goals of the firm to the young employee’s individual contributions. This workgroup needs to know they’re making a meaningful contribution to the company.
The process of developing the IDP starts with a discussion between an employee and supervisor about the employee’s goals and the support needed to achieve both the business’s goals and the employee’s career aspirations. But to make this discussion effective, supervisors need to shift their perspective. Instead of seeing a young, inexperienced employee who needs to earn his stripes, the supervisor should ascertain what the employee knows and determine how best to leverage that knowledge for the good of the firm.
The younger workforce often works well on project teams, and this type of activity should be built into the IDP. Combine experienced employees with their more tech-savvy younger colleagues to provide learning opportunity for everyone. Creating teams to enhance internal technologies are an obvious fit, but also consider externally facing projects. Who better than the workforce that grew up with LinkedIn and Facebook, combined with your seasoned business-savvy professionals, to develop or enhance your firm’s social media presence?
Once the IDP has been agreed upon, regular check-in meetings need to be established. These should occur at least quarterly and should be independent of operationally oriented one-on-ones. Because career development and feedback are critical to retaining this group, supervisors need to set aside time to fulfill these needs. Make feedback supportive but constructive. Make it conversational, with both parties providing input and noting progress. Supervisors should recognize when goals are met and make clear the outcomes expected from this process.
Once you’ve put in place an effective IDP process, how can you take it even further? The key is having a culture that gives the employee accountability and ownership of development and the IDP. If you’ve correctly identified your top talent, those employees will have the most robust IDPs and will execute them without needing a lot of support. They will come to the check-in meetings prepared, having made significant progress, and will offer ideas and suggestions about how to improve the plan and their own development. To their own and the firm’s benefit, they’ll be fully engaged.
A disengaged employee has excuses, misses meetings and may require additional handholding. These signs can help you identify an employee you could afford to lose. Move investment dollars and other support away from them in favor of those who are performing.
No NFL team wins the Super Bowl by riding solely on last year’s roster. To win, develop a deep bench of young talent by providing a culture that supports their development, offers meaningful work, and compensates them with tangible rewards.