There are ways to attract and retain young talent without turning your company upside down. But, it is necessary to first acknowledge their differences and address them, even if only in small, but highly symbolic ways.
This story accompanies Head of the Class.
Generation Y -- computer-savvy, multitasking, constantly in touch and tuned in -- have entered the workforce. While some may believe the current economic climate will save them from the need to "cater" to these young upstarts, that will at best be a temporary condition.
HR organizations that ignore this do so at their peril.
Companies that attract and retain Generation Y often have hip young management, a playful environment, casual clothes, lots of technology and social opportunities that blur the lines between work and play.
Executives at many large corporations find themselves in a dilemma. On the one hand, they have an image to protect, clients to serve, security to maintain. On the other hand, they need young people to fill entry-level jobs. And companies that have bought into the need to attract Generation Y employees still struggle to keep them satisfied and retain them.
"We need a plan for recruiting Generation Y," declares a senior HR executive. "We need to reach out to them at their level, with their tools, in their style. Does anyone know how to do that?"
"We can't keep Generation Y employees," complains a senior executive at a large financial services firm. "They join with great fanfare, and we pay well. Still, they are gone within a year at most. What are we doing wrong?"
Are people in your company asking these questions? What is Generation Y anyway? What attracts them to a workplace, and what keeps them there? And why should we care?
As the dean of business at Bentley College in Waltham Mass., I was responsible for educating Generation Y and sending them to their first jobs. Seeking to learn what companies thought about the "product," I interviewed over 50 recent graduates to find out first-hand what makes Generation Y unique, how well they are doing and how they feel about the work experience.
Bentley students major in business and most enter corporate or consulting positions right after graduation. They generally have a reputation for being able to hit the ground running in their first job.
Generation Y is defined as anyone born between 1977 and 1994. They represent the first generation that grew up with the Internet, multitasking and they are in constant real-time communication with family, friends and classmates. The oldest are now in the workforce and expecting to work with the same level of connectivity.
My interviews bore out much of what I have read about Generation Y. They expect to be treated differently from their predecessors, and managing them poses some unique challenges.
They are entitled, demanding and ambitious. In her first assignment at a technology research firm, Alexis convinced the company to use live social-media tools in their national conference. Although management saw it as a risk, she persisted. She expressed her attitude toward work to me: "We are the future. Face it. Get over it. Companies are not going to do well until they start listening to us. We know a lot more than you think we do."
They challenge traditional corporate culture. Brian, who works for a large financial services firm, refuses to accept its culture at face value. "One of my principles is, 'Don't ask for permission; ask for forgiveness.' "
They are self-absorbed, self-empowered, independent and fearless. Jason works at a small software firm specializing in HR applications. He's responsible for lead generation, and he figures out how to reach the senior HR executive or CEO of Fortune 500 firms. "I will call anyone, and call again and again until I reach them. The biggest strength I bring to this job is NO FEAR."
Gen Y are completely dismissive of hierarchy and titles. They expect the door to the CEOs office to be open at all times, that they will be well received and that the ideas they have will be seriously considered.
Michael decided to have lunch with every one of the senior executives at his commercial real estate firm over a three-month period. At first they resisted, but now it is a formal program for all new hires. "People like to talk about themselves, so it is pretty easy. They feel like they have invested in me. It is now easy to drop into their offices and get advice."
Gen Y workers are used to doing many things at once. In school, they would do their homework while Instant Messaging, e-mailing and watching TV all at the same time. They expect to work the same way. Many Gen Yers I interviewed confessed to both lack of focus and trouble with completion. To them, this is perfectly normal -- and it's not their fault! If the work isn't challenging they get bored quickly and become easily distracted.
Jeff does research and analysis for three partners of a small consulting firm. "There is no way I would spend more than an hour on only one project. I need to bounce from one thing to another. When I finish an analysis, before I go on to the next one, I might check Facebook and look in on my Bentley friends or check my gmail [personal email]. So I use the other sites as a distraction."
Do his bosses know? "They give me enough room to work in my own way. They know that I work hard, and they know that I will meet my deadlines. But no, they don't know."
Gen Yers need, and demand, a lot of feedback and want to work collaboratively, almost to the point of distraction for older employees. Alexis: "At my old job, they would be so mad at me when I turned stuff in early. I needed to know what I was doing wrong. I would get documents back with red all over them and they would say, 'You have to pay more attention to detail.' I would say, 'That is just not how I work. I need more feedback.' "
They are impatient with any form of rules-based structure, whether it's a rewards system based on length of service or regulated work hours. They want meaningful work and want to be recognized for a job well done.
Dan was recently promoted to the position of social media specialist, his third job in less than two years in a global technology firm. "If I have 10 projects, I will put all my effort into the one or two that make a difference and will be successful. Otherwise it isn't worth the effort. If my work is not meaningful and impactful, forget about it."
They expect to work hard, play hard, and not simply put in hours for the sake of it. In addition, many seek more meaningful relationships at work. Kelly, a marketing specialist for a line of children's shoes in a large clothing manufacturer: "I would like to see more team building, and more focus on personal relationships. The older generation are so focused on work that they don't take time to chat and share personal lives."
If they are so much trouble, why do we care?
Frankly, we need them.
The demographics of the workforce are changing. According to the Conference Board, 64 million baby boomers will be eligible to retire by the end of this decade. At the same time, the Bureau of Labor Statistics reports that the number of workers ages 18 to 34 (Gen Y) will increase by 10 percent over the next decade, while the number of workers ages 35 to 44 (the so-called Generation X) will decrease by 6 percent. Within 10 years, Generation Y will represent more than half of the U.S. workforce.
If we can manage to overlook their brashness, their blatant disregard for the rules (such as dress code and hours) and their neediness, they are very good workers! They can be very productive given a job that is a good match.
This means a project with a deadline, collaboration with others and a focus on research. They are whiz kids with technology and can "find things out" faster than their counterparts who have been in the same company for years. They are excellent at multitasking, highly adaptable and quick to learn new skills and concepts.
Andrew is one of the lucky few who found the perfect niche in his job for the education division of a global technology company. He is the "go-to guy" for the vice president of the division.
"I sit outside the VP's office, and he calls me in several times a day. He might have an idea and will say, 'Can you find out about X?' and I will go and do it. He may be trying to get a straight answer, for instance, on sales in a certain geography, and the sales manager always tries to put a certain spin on it, so the VP will ask me for the straight answer. At the end of each quarter, I get lots of queries like that."
Andrew was hired for a position that didn't exist. An enlightened vice president gave him rope (and budget) to figure out how to support business decisions on an ongoing basis. He built an analytics platform, created management dashboards for executives and generated reports for analysis of specific business decisions. He created some sales tools that have been incorporated into the sales partner platform.
Now he is hoping to expand the operation. "My goal is to grow the team to the point where the company has confidence in my team and not just in me. Right now they have confidence only in me, which is a precarious position to be in. I want to have a whole team of Andrews."
It is not hard to figure out that Generation Y is happiest in a workplace that is hip, young and open. Here are some examples of what appeals to them:
* A physically open work environment. They are used to working while surrounded by many distractions and thrive on having many conversations going on at once.
* Casual dress code. "Business casual" is now the norm in most corporations, at least for those who are not customer-facing. But companies that appeal to this generation celebrate the casual part rather than tolerate it.
* Flexible hours. They value the option to come in late or leave early, and to take time out during the day to go to the gym (a VERY common practice). They see no point in being at work when there is not enough to do.
* Flat hierarchy, lots of cross-functional activity. Since Generation Y workers are autonomous and self-motivated, they work well in fluid environments with lots of cross-functional collaboration. In companies where the chain of command is rigid, they will continually break the rules and then wonder why they are not rewarded for coming up with new ways of doing things.
* Open technology platform. Generation Y employees highly value the ability to mix work with life outside of work while sitting at their desks. They want to use gmail, gchat and Facebook when they take a break from the task at hand. They resent workplaces that block certain Web sites and prevent them from doing personal chores at work.
* Transparent and explicit reward system. Gen Y employees expect, quite simply, to be recognized and rewarded for a job well done. They need to see the value their assignment brings in the bigger picture.
* Frequent feedback. Rather than shying away from criticism, they welcome constructive feedback that helps them learn how to improve their performance.
* A work hard, play hard culture. Gen Y employees want their employer to be more like a family. They love events and celebrations, whether it is a casino night or an afternoon of outdoor competitions. They love bosses who take them out drinking after work. They love to be on equal footing with their superiors and they love playing this out on a social basis.
It may be that these are the workplaces of the future, but in many companies, successful companies thriving in a global marketplace, that future is far away. And their culture is not about to change to accommodate a bunch of demanding upstarts who don't know how to act their age!
And yet, we need them.
If you, like many executives, work at a company with an inherently conservative culture, don't despair. You can still attract and retain Gen Y workers, but you will need to make some changes.
The most important first step is to observe your corporate culture with the eye of a 22-year-old just entering the workplace. Forget about your vast knowledge about why things must be the way they are and just try to see it their way. Think about the aspects of the culture you can't change, and why they may cause problems for Gen Y.
One thing you can't change is middle management. You can't personally coach each and every person who has been there 10 to 20 years, gradually working their way up the hierarchy, and tell them to treat their direct reports completely differently than they were treated.
Some companies are trying. They are seeking partnerships between executives and Gen Yers on a one-on-one basis -- part executive assistant and part reverse-mentoring -- to teach executives more about the technology. These may help, as in the case of Andrew above, save one Generation Y employee at a time (and maybe one baby boomer at a time).
Here are some other things you can do to bridge the gap.
Be authentic about who you are as a company.
Repeatedly, Gen Y employees complain that, when they were hired, they were told one thing, and found "the truth" to be otherwise. They feel betrayed.
Many companies are creating a special recruitment plan to attract Generation Y where they live. They create groups on Facebook and use current Gen Y employees to "reach out" to prospective new hires. They follow up with instant messaging instead of e-mail or telephone.
This is a relatively easy tactic for HR, but to a new employee it can be downright deceitful if the actual culture uses none of those tools or, worse, bans them from use.
Other companies made the case that since so many boomers would be retiring soon, there would be significant opportunities for rapid advancement. New employees discovered that the word "rapid" was relative (and to them, highly misleading) and no real program was in place to change the traditional means of advancement.
But, overall, the perceived act of deception itself was even more serious than the consequences. Gen Y employees don't like to be duped into taking a job. And they use their networks to get the word out. An expert on Generation Y from a large financial services company observes, "If you are not honest in recruiting, they will tell others and your reputation will be hurt. Word gets around. And they value authenticity highly."
Make the rationale for restrictions and regulations transparent.
If you need to block certain Web sites or restrict certain applications, make the reasons clear. Most companies have practical business reasons for doing so. I suspect that some companies are overly cautious, but few companies explicitly prevent employees from doing so-called unproductive tasks, or personal tasks, on the job.
If a company really doesn't trust its employees to such an extent that they need to control all of their time on the job, that company is never going to succeed in retaining Gen Y. But if there are good business reasons for restrictions, and Gen Y workers know what they are, they will be much more accepting. With lack of information, they will think the worst.
Communicate often and be explicit.
I have seen many companies where corporate strategy is not communicated well or often enough. It is more important than ever to change that.
Gen Y employees need to know where they fit in the scheme of things. They need to know how their department, their division, their project, fits into overall organizational performance. There are, of course, many things that can't be communicated until the time is right, but a steady stream of information is important. Open forums, with top executives communicating visibly and preferably in person -- if possible -- work best.
Here are some other simple tactics you might consider. They won't change the culture entirely, but they are not difficult and are likely to improve retention.
* Create cohort groups of Gen Yers across divisions. While they may work in vastly different parts of the company, Gen Yers can compare their experiences and become their own network and support group.
* Create special projects above and beyond their normal duties (as long as their direct bosses agree). One company gave the cohort a special project to design a Gen Y recruitment program!
* Implement a job-rotation program. This gives employees the opportunity, much sought after, to learn more about the business as a whole.
* Pay attention to job design. A well-designed job has variety, inherent significance, autonomy and clear performance feedback from the job itself.
* Provide options to improve work/life balance. Gen Y employees highly value the little things the company does for them. Access to a gym during the lunch hour or discounts on public transportation or cultural events are very important to them.
* Where possible, take advantage of special situations to create partnerships and opportunities for individuals to excel. Why not invite a Gen Y employee to be your personal analyst? You might learn something new!
You don't have to turn your company upside down for Generation Y. But to be successful at keeping them and getting the most from their unique talents, you do need to acknowledge their differences and address them, even in small but highly symbolic ways. After all, this is just the beginning of the workplace of the future!
Margrethe (Margi) H. Olson's passion is understanding what makes enterprises prosper with that illusive combination of leadership, business process, skills and technology. From 2002 until 2007, Margi was dean of business at the McCallum Graduate School at Bentley University in Boston. She previously held strategic change roles both as an executive (Lend Lease) and a consultant (Lotus / IBM and DMR). She also was a professor at the Stern School of Business at New York University. Margi has written three books and many articles. She currently works as a volunteer with World Vision and OxFam.