Engagement & Retention of Millennial Employees - A Policy Advocacy Memo

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

https://www.youtube.com/watch?v=dSfDROxCuxI

https://www.youtube.com/watch?v=dSfDROxCuxI

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


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


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.”


Engagement & Diversity


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


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…


But it Doesn’t Retain Employees


• 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)


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)


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)


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…


… 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)


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

Engagement & Retention of Millennial Employees - A Policy Advocacy Memo

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