Top strategies to attract and retain a multigenerational workforce
Companies must offer what potential employees value
THE REAL ECONOMY |
The number one staffing challenge that companies across industries are facing today is the lack of qualified workers available. The inability to find workers poses significant challenges, not only for businesses and policymakers, but for the broader economy. Moreover, if federal policy isn’t aligned with the tight labor market, bottlenecks in the economy due to a lack of supply that is already evident in agriculture, residential construction and manufacturing may spread to other areas of the economy, causing overall growth to slow.
Among the drivers behind this challenge, according to executives in the RSM US Middle Market Leadership Council (MMLC) survey, are competition for potential employees and simply finding people who want to work in their industry. Incentives that address the work environment, career development and compensation are attractive, and these are being offered by a plurality of middle market companies.
But age can have a profound impact on the way incentives are viewed. While most baby boomers and Gen Xers might see the inherent advantages of retirement plans and health care benefits, for example, fewer than half of millennials place value in these incentives. Many incentives being offered by a majority of companies are important to this cohort; conversely, fewer organziations are offering the benefits with universal value.
Finding the balance
Workforce needs differ among industries, let alone specific companies. Given the importance of millennials in the workforce—by 2030, the cohort is anticipated to make up 75 percent of the labor market[xi]—companies would be expected to cater to that generation’s workplace preferences through their recruiting and retention initiatives. But millennials are not the only ones working or looking for work today. Boomers, with all of their experience and knowledge, are putting off retirement and working longer; Gen Xers are raising families and need to work as well. Companies need to identify which generation holds the talent they need and adjust their recruiting efforts accordingly.
Some offerings that companies should seriously consider are relatively easy and inexpensive to execute; others are more expensive and complex. To attract and retain a desired workforce in a tight labor market, however, management will need to strike a balance between the incentives they can afford to offer and those that potential employees value.
What companies are offering
Health care benefits (offered by 90 percent of MMLC participants) and retirement programs (offered by 86 percent) are the foundational benefits that, depending on the company, will offer programs that may include options for cafeteria plans, wealth protection, health reimbursement and saving accounts, and the like. Perhaps not surprisingly, given the perspectives that younger adults often have on health and long-term issues, these benefits are among the least valuable to them when considering employment.
A majority of companies are offering opportunities to have input on how work is done (67 percent).
According to a recent survey of construction workers, “feeling in on things” was second only to “feeling appreciated for a job well done” as a priority for what workers look for in a job.[i] Establishing a work environment where employees have opportunities to offer relevant input can go a long way towards making the employee feel valued—and want to stay.
It should not be surprising that compensation—hourly or annual, based on commission or performance—is among the top attractions offered by companies. A low majority of middle market executives anticipate increasing compensation levels (58 percent) and offering competitive incentive compensation arrangements (56 percent) in their efforts to recruit and retain labor, according to the survey. Total compensation considerations aside, it is worth remembering that compensation and benefits are not the primary attractions for employees—more often, it’s the quality of the job.[ii] And while a work-life balance may not be considered a high priority by boomers[iii], most millennials (84 percent) view it to be the most important factor in evaluating job prospects.[iv]
Because acknowledgement by leadership of work done well is important to employees, recognition programs are offered by many companies (63 percent). A culture of recognition can be a relatively easy and low-cost effort that provides a high return on the investment in terms of work performance and employee retention.[v]
Other somewhat traditional offerings—and one that appeals to employees who want a clear career trajectory—include internal and external training or education (offered by 56 percent). From apprenticeship programs to employers’ work arrangements with colleges and universities to individual professional development courses, companies understand that these programs are some of the most effective ways to identify, develop and retain the skilled workforce they need.
What companies should consider
Conclusions in studies of the behavior and values of different generations range widely, but, whatever the perspective, these studies make it clear that understanding what drives potential workforce talent is critical to attracting and retaining them. Many companies are missing opportunities to engage potential employees by focusing more on traditional incentives and less on what they value.
First, companies need to recognize and leverage the power of social media. Eighty-eight percent of millennials and nearly as many Gen Xers are on Facebook; a somewhat smaller but still sizeable percentage of boomers (62 percent) use the platform; three-quarters of Facebook users overall go to the site on a daily basis.[vi] Yet only 43 percent of middle market companies are using social media to attract employees. (Usage of LinkedIn, a more business-oriented platform, by all cohorts is significantly smaller than that of Facebook.) It takes an investment of time, effort, a budget and other resources, but can companies really afford not to be online when it comes to recruitment?
Due to the unique nature of particular jobs, not every industry can offer flex time to employees; in this regard, agriculture, health care and manufacturing come to mind as location- and time-sensitive industries requiring most employees to be at a specific place and for a regulated period. But many industries and business cultures can tolerate employees working on various schedules. In these cases, as long as the work is completed on time, it may not matter what time of day it gets done or where. Recognizing this, more than half of middle market executives (56 percent) offer flexible hours or schedules. But the value of flexible arrangements across the generational board suggests more companies need to consider these work programs.
Given the relative popularity of flexible hours and schedules—not to mention the ubiquity of mobile technology—it is surprising that so few middle market companies offer work-from-home options (35 percent). While boomers in general may not want to work from home, this option becomes more popular with each successive generation.[vii] Businesses will have to consider how much actual face time they want, the technology they need and what policies to put in place for this option.
Members of every generation want to know the potential that employers hold for their professional futures. But less than half of middle market executives (43 percent) offer formal programs to help employees define career paths in their organizations. With half to two-thirds of Gen Xers and millennials expressing interest in being a boss or manager[viii], showing an employee a clear and realistic trajectory that holds the promise of a solid career should be considered for every company’s human resources toolset. Formalized mentoring programs (offered by only 21 percent) should be among those tools. If companies are finding that helping employees define their career paths is an effective means to retaining them, then providing guidance along the way can play an appropriate part of that effort.
Social activities for employees are another relatively easy and low-cost incentive for any demographic. Yet with just over half of survey participants engaging employees through social activities, this could be categorized as an underutilized approach. Not surprisingly, given its limited use to attract employees, social media is used to engage them by only one-third of middle market companies. Policies for volunteer days or other opportunities to give back to the community play into decisions by more than half of millennials to accept a job offer[ix], and three quarters or more of Gen Xers and boomers participate in such programs.[x] Yet only about one-third of companies (34 percent) present company-sponsored opportunities to support community and charitable efforts.
[i] “Talent Development In the Construction Industry” (Sept. 28, 2015) FMI Corporation
[ii] Brooks, C. “The Thing Employees Want Most From a Job” (Dec. 16, 2013) Business News Daily
[iii] Tolbize, A. “Generational differences in the workplace” (Aug. 16, 2008) Research and Training Center on Community Living, University of Minnesota
[iv] Reynolds, B. “FlexJobs Survey: Millennials More Interested in Travel, Work Flexibility Than Gen X, Baby Boomers” (Sept. 30, 2016) Flexjobs.com
[v] “The Employee Experience Index” (July 2017) IBM Smarter Workforce Institute and Globoforce’s WorkHuman® Research Institute
[vi] Greenwood, S. et al “Social Media Update 2016” (Nov. 11, 2016) Pew Research Center
[vii] “Why baby boomers don’t like to work from home” (Feb. 3, 2013) MarketWatch
[viii] Fottrell, Q. “What Men, Women Value in a Job” (Dec. 11, 2013) Pew Research Center
[ix] Scott., R. “Millennials Rule at Giving Back” (Jan. 18, 2015) Forbes
[x] “Rewarding a Multigenerational Workforce” (September 2008) WorldatWork[xi] Mitchell, A. “The Rise of the Millennial Workforce” wired.com