ENGAGEMENT & RETENTION OF MILLENNIAL EMPLOYEES April 7, 2014 Kayla Cruz- Florida International University Policy Advocacy Memo
Aug 23, 2014
ENGAGEMENT & RETENTION OF MILLENNIAL
EMPLOYEES
April 7, 2014 Kayla Cruz- Florida International University
Policy Advocacy Memo
Problem Statement Recent survey results indicate that employee
disengagement has a negative impact on both employers and employees
For this reason, the development of effective HR strategies will prove to be crucial, as the success of organizations is highly dependent on their ability to attract, engage, and retain top talent
The ability to effectively hire, retain, and engage talent is the true competitive advantage of an organization
EMPLOYEE ENGAGEMENT MATTERS
Source: ENGAGE, 2013
Employee Engagement Findings
Only one out of every five workers today is giving full discretionary effort on the job
Put another way, almost four out of five workers are not living up to their full potential or doing what it takes to help their organizations succeed
This “engagement gap” poses serious risks for employers because of the strong connection between employee engagement and company financial performance
Source: Towers Perrin Global Workforce Study 2007-2008
Financial Impact of Engagement
The Towers Perrin Global Workforce
Study cites a recent study in which 50 global companies
were reviewed over one year to assess the financial impact
of employee engagement
Source: Towers Perrin Global Workforce Study 2007-2008
Engagement & RetentionThe Towers Perrin
Global Workforce Study reports the following:
• 51% of engaged employees have no plans to leave their
employer
• 78% of disengaged employees would consider another offer, are actively looking for other
jobs, or have already made plans to leave
Source: Towers Perrin Global Workforce Study 2007-2008
How Engagement Affects Retention
Engaged Disengaged
No Plans to LeaveNot Looking, But Would Consider Another Of -ferActively Looking For Another JobMade Plans to Leave Current Job
39%
4%
2%
51%
15%
35%28%
15%
7% 5%
Employees Want to be Engaged
“…our respondents care deeply about the world around them and generally feel positive about their work, their jobs and their lives. Most are looking to join and stay with a secure organization that allows them to grow and develop a career. And they’re willing to invest more of themselves to help their company succeed.”
Source: Towers Perrin Global Workforce Study 2007-2008
Engagement & Diversity
Source: Towers Perrin Global Workforce Study 2007-2008
Different employee groups = varying interests and perceptions at differing points in their careers
Today’s organizations are conducting extensive research on workforce views, needs, and perceptions to better understand their employees
“This leads to a competitive edge in attracting, retaining and engaging employees, as well as in channeling employees’ energy and brain power most effectively”
Engagement Across Generations
Source: Towers Perrin Global Workforce Study 2007-2008
Millennials Defined “The American teens and twenty-somethings
who are making the passage into adulthood at the start of a new millennium”
Roughly between the ages of 18-29
Born between early 1980s – early 2000s
Recent college graduates
Young professionalsSource: Pew Research Center, 2010
Millennial Workplace Values 1/2 of Millennials would rather have no
job than a job they hate
3/5 of Millennials feel that they will switch jobs in less than 5 years
1/4 of Millennials say that they are completely satisfied with their current job
Source: Red Tree Leadership & Development, 2012
Importance of Millennial Engagement
Source: VisionSpark
Cost of Millennial Turnover Survey of HR Professionals in various industries reported
the following:
87% of companies reported that it costs between $15,000 to $25,000 to replace each millennial employee
30% of companies lost 15% or more of their millennial employees in the past year
71% of companies reported that losing millennial employees increases the workload and stress of current employees
56% of employers revealed that it takes between 3 and 7 weeks to hire a fully productive millennial in a new role
Source: Millennial Branding & Beyond.com Cost of Millennial Retention Survey
Suggested Policy Alternatives
1• Increased Salaries/Compensation
2• Flexible Work Arrangements
3• On-Boarding/Employee Development
Initiatives
4• Development of Employee Skills & Interest
Databases
Evaluative Criteria
Cost
Effectiveness
Political Feasibility
Rating of Alternatives from
Least Favorable to Most Favorable:
1 = Poor2 = Average3 = Good4 = Excellent
Stakeholder Analysis
Millennial Engageme
nt
Employers
Non-Millennial Employee
s
Customers
Community
Millennial Employee
s
Alternative #1: Increased Salaries/Compensation
Organizations can increase salaries/compensation At time of initial base salary negotiation At time of annual performance review
Focus on “Total Rewards” aka “Pay and Perks” Compensation Benefits Paid Time Off Retirement Plans
Increased Pay Attracts Employees…
Source: Towers Perrin Global Workforce Study 2007-2008
But it Doesn’t Retain Employees
Source: Towers Perrin Global Workforce Study 2007-2008
• Would involve a significant increase in the cost of labor (Rating = 1)Cost
• May not prove to be effective as Millennials do not rank competitive pay as the primary motivator for increased engagement (Rating = 1)
Effectiveness
• Would not likely appeal to organizations as they attempt to cut back on costs (Rating = 1)
Political Feasibility
Evaluation of Alternative #1: Increased Salaries/Compensation
New strategies regarding when, where, and how work gets done: Working from home 4-day work week Limitless vacation time Varied start & end times
Seek to meet the work/life balance that employees desire
Alternative #2: Flexible Work Arrangements
Source: HUMAN CAPITAL TRENDS SURVEY, 2014
Source: Working Mother Magazine
• Not as costly as other alternatives• May be costly in terms of wasted
compensation if employees are not truly working (Rating = 3)
Cost
• Would allow employees the work/life balance they seek leading to higher engagement and longer tenure with organizations (Rating = 2)
Effectiveness
• Some employers may not trust that work will be completed at home
• Flexible work arrangements may not be feasible for all job functions (Rating = 2)
Political Feasibility
Evaluation of Alternative #2: Flexible Work Arrangements
On-boarding initiatives strive to prepare employees to succeed in their work environment Employee orientation Discussion of employer/employee expectations Programs that discuss & promote workplace
culture
Employee development Focus on career growth and expansion of
employee skill sets
Alternative #3: On-Boarding/Employee Development Initiatives
Problems With Traditional EDPs
• Tend to focus primarily on topics such as resume building, networking, interview process, etc. as opposed to specific technical skills
1• Don’t always provide opportunities to
actually implement the skills developed2• Some organizations are making employee
development mandatory, which puts additional stress on employees who may not be interested
3
• Can be very costly• Traditional employee training represents a
$130 billion global market (Rating = 2)Cost
• Allows employees to learn and develop new skills, but often fails to provide avenues for employees to put new skills into practice (Rating = 3)
Effectiveness
• Initially may be politically feasible, but as time passes, senior executives may become concerned with effectiveness of programs due to high cost (Rating = 3)
Political Feasibility
Evaluation of Alternative #3: On-Boarding/Employee Development Initiatives
Matching employee skills & interests with employer needs What are employees good at? What are employees interested in? How can we use those skills & interests to benefit the
organization?
Employers can and should leverage Millennials’ inexperience & desire to learn Allowing them opportunities to develop various skills of interest Encouraging stretch assignments (projects outside of their
normal job functions) Providing opportunities to connect with professionals from
various fields
Alternative #4: Development of Employee Skills & Interest Databases
Moving Away from Traditional EDPs
Source: PWC, Millennials at Work Survey, 2011
Creation of Skills & Interest Database would allow for these opportunities…
…and move away from these traditional learning practices
Which of the following training/development opportunities would you most value from an employer?
Millennials Want to Learn…
Source: Johnson Control’s Generation Y in the Workforce Report, 2010
Today’s employees value meaningful work and learning opportunities
Millennials Want Career Growth…
Source: Towers Perrin Global Workforce Study 2007-2008
… And It’s In The Best Interest of Organizations to Provide These
Opportunities People value workplaces that contribute to their personal
development as professionals
Millennial employees prefer working for companies that invest in developing their capabilities and keeping their skill sets relevant through constant learning and development opportunities
Talented people seek out opportunities to grow, and they will flock to organizations that provide ample opportunities to do so
Severe impact on retention… If people are developing more rapidly than they could anywhere
else, why would they leave?
• Not costly long-term• Cost associated with initial set-up (Rating = 4)Cost
• Would allow employees to learn new skills, apply skills already developed, and engage in meaningful work that they enjoy (Rating = 4)
Effectiveness
• Likely to be embraced by administrators as it provides value to the organization
• Efficient use of human capital resources• Allows for additional completion of work
(Rating = 4)
Political Feasibility
Evaluation of Alternative #4: Development of Employee Skills & Interest Database
Policy Analysis Matrix
Alternative 1INCREASED
COMPENSATION
Alternative 2 FLEXIBLE WORK ARRANGEMENT
S
Alternative 3EMPLOYEE
DEVELOPMENT
Alternative 4 SKILLS & INTEREST DATABASE
COST 1 3 2 4
POLITICAL FEASIBILITY 1 2 3 4
EFFECTIVENESS 1 2 3 4
TOTAL SCORE 3 7 8 12
Recommendation: Development of Employee Skills & Interest Database