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Where's Gen Y Going to Work (and Why)?

Recent research finds nearly 80 percent of millennials are employed at small- to mid-sized companies. Experts say HR leaders at large organizations must focus on creating flexible and social media-friendly environments to get Generation Y on board and engaged.

Thursday, September 6, 2012
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You've heard all about the distinct attributes often attached to Generation Y workers. They're a plugged-in, tech-savvy bunch with an innate feel for social media and a flair for creative marketing. They possess a unique aptitude for science as well as the artistic and entrepreneurial. They're an achievement-oriented group that seeks out meaningful work and new challenges.

But you may not have seen many of these qualities on display in your organization, as most millennials seem to be taking their talents to smaller employers.

That's according to a recent survey conducted by PayScale Inc. and Millennial Branding, which sees a majority of Gen Y workers employed at small- to mid-sized organizations. The analysis of about 500,000 employees ages 19 to 30 across cities, companies, careers, college degrees, company size, compensation levels and job skills finds 47 percent of Gen Y workers at companies with fewer than 100 employees, and 30 percent at organizations with 100 to 1,500 employees. Just 23 percent of respondents indicated they work for companies with 1,500 or more employees.

So, what types of smaller companies are millennials going to?

According to the study, the most common jobs held by Millennials are "merchandise displayer" and "clothing sales representative," with members of Gen Y about five times more likely to hold these positions -- which also rank among the lowest paid jobs in the analysis.

Many Gen Y members working in retail, however, are college-educated. Overall, 63 percent of those studied indicated they have a bachelor's degree, with 83 percent of clothing-sales associates holding a bachelor's degree.

Millennials are widely perceived to seek the type of creative, collaborative and flexible environments not always associated with large, structured corporate organizations. While some Gen Y workers are clearly eschewing big firms in favor of smaller ones with the characteristics they crave, that's just one factor at play, says Dan Schawbel, founder and managing partner of Boston-based Millennial Branding.

For starters, there are simply a greater number of small businesses, which means more available opportunities in a tight job market. What's more, younger workers -- many of whom are eager to start tackling hefty student-loan balances -- can often find work faster with smaller outfits, says Schawbel.

"Large companies have extensive and exhausting recruiting processes. Gen Y workers could start a business today or email a [small business] founder and potentially get hired this week, when it could take a few months to get hired by a Fortune 500 company," he says. "Gen Y is fed up that they have to do a series of interviews, and then still might not get the position. Instead of the recruiter sending a custom note, it's an automated message, which turns Gen Y off."

So then, what turns them on?

"Gen Y is an entrepreneurial group that wants to have a positive impact on society through business. Most large companies don't have intrapreneurship programs [which allow employees to initiate new projects without being asked to do so], have strict employee policies and make it hard to take risks," says Schawbel.

HR executives should focus on adding or augmenting the types of offerings -- intrapreneurship programs, internal hiring programs, flexible work arrangements, transparent meetings, casual dress codes and permitting social-network use during work hours, for example -- that are most important to younger workers to attract them and keep them engaged, he adds.

"Create an authentic and trusting environment, where Gen Y feels comfortable sharing their ideas, being part of discussions and having a say," Schawbel says. "Employers should also embrace reverse mentoring, so that Gen Y can get executive mentors, and so that there is a knowledge transfer between the generations."

Indeed, large organizations that pair younger employees with their more experienced colleagues can get a leg up over smaller firms in the competition for Gen Y's services, says Renee Romulus, a director in PwC's advisory practice in McLean, Va.

"The experienced staff gains new expertise from the Gen Y talent, and the Gen Y talent benefits from working directly with experienced staff and resources that a small organization cannot provide, facilitating career growth and opportunities to learn," says Romulus. "The old model of waiting your turn and paying your dues may be outdated and, frankly, may create a disadvantage for a global-business organization. Gen Y employees do not want to wait for 10 years to advance when they have opportunities to gain experience now."

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Schawbel points to companies such as DreamWorks and Google as examples of large organizations that know how to provide the immediate growth opportunities sought by many millennials.

At DreamWorks, for instance, employees of all ages and job titles can attend classes that teach them how to pitch business ideas to executives, and are then offered the chance to present those ideas to leadership, he says.

Google allows employees to spend 20 percent of their time working on projects that aren't necessarily in their job descriptions. "They've created an ecosystem that's all about sharing ideas, collaborating and changing the world -- all of which attract Gen Ys to work there," says Schawbel.

Perhaps nothing better exemplifies the idea of continuous sharing and collaborating than social-media networks such as Facebook, LinkedIn, Twitter and so on. While some employees may view this type of technology as a tool, it's "a way of life" for Gen Y workers, says David Ulrich, professor of business at the Ross School of Business at the University of Michigan. Tapping into this generation's experience and expertise with new technology, including social media, benefits the organization as well, he says.

"For one, work boundaries are not defined by geography. [Employees] don't have to go to or from work, but work can be done remotely when employees share common values. Gen Y employees can do work anywhere, anytime.

"Two, work focuses less on information and more on decision-making. One of the challenges of technology is that we have ubiquitous access to information," says Ulrich, who is also a co-founder and partner at the RBL Group, a Provo, Utah-based consulting firm. "The challenge now is to turn that information into insights that inform decisions. We can be overwhelmed with information unless we have insights. Gen Y technology experts need to be taught that more information is not a source of business success unless it can be used to inform decisions."

Lastly, large employers that don't embrace the idea of employees using social media to make business decisions -- as well as for personal purposes -- can count on being bypassed by this generation and those to come, adds Schawbel.

"[Today's] students and young professionals won't work at your company if you block social-network use. They also won't work for you if you don't give them the ability to choose which mobile device they can use. If employees are spending time outside of the office doing work, then they should be able to use part of work for personal time. What matters most is that the job gets done."

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