The Business Case for Understanding Millennials

Why do we need to reset our perceptions of millennials? Every generation has to overcome negativity from the older generations, right? The new kids on the block should be the ones to adapt.

Every generation that has gone before us has thought that. And yet, every new generation has created progress through their resistance of the status quo. Eventually, the new generation’s expectations, small or large, were integrated into how we work and live.

Today, integrating new expectations may seem insurmountable because they are being driven by a significant, fast-paced change in the world. Consider the significance of the time we are living in: the millennial generation is the last generation to remember a world without the Internet. Millennials are both the first generation to form their world perspective from a digitally influenced vantage point and the last to remember what it was like not to always be connected. The Internet is such a big change to the world, the way we do things, the way we behave, that to dismiss its impact on millennials by categorizing their behavior as fleeting generational traits is a serious error in judgment. Overall, the impact to businesses that don’t seek to understand millennial employees is that they inherently will not understand how to engage generations beyond millennials, as well as digitally enabled talent today regardless of generation.

To complicate things further, other generations had decades to get used to big changes. Consider major inventions like paper, electricity, television, and new forms of transportation like ships and trains. As these inventions became the new normal, skills, attitudes, and behaviors became obsolete, were transformed, and were created. For example, many said that the light bulb would never happen. Once it did, it transformed society by bringing about the need for larger power grids and distribution networks. Behaviorally, attitudes and expectations formed around always having light. The scope of activities we could do in the evening changed. Some activities, skills, and values were lost. However, in the past, these game changers occurred further apart and fewer between, and we had generations to get used to them. Starting with the boomer generation, changes began to come faster and faster, often within the span of a decade or two, leading to a need to integrate expectations faster.

Unfortunately, the slow integration of millennials’ new expectations, driven by the combination of the innate desire to maintain status quo and the avalanche of negative, viral social media, has led to highly visible consequences. Many have become focused on either doing nothing (“We don’t need to change; if it ain’t broke, don’t fix it”) or rigidly trying to make millennials fit in with the existing paradigm (“They should adapt to us”). As a result, many organizations are already experiencing the following immediate business impacts:

› Costs due to turnover. Today’s organizations are facing unprecedented challenges to attract and retain young talent. A 2016 study by Gallup estimated that millennial turnover costs the US economy $30.5 billion every year. According to Millennial Branding’s study on millennial retention, 56 percent of millennials expect to leave their jobs in three years or less. It’s easy to conclude that this loss is tied to lack of understanding of modern talent needs.

› Lack of bench strength. Along with the costs of higher turnover, profit is at risk due to lack of a leadership pipeline. Whether hiring from external sources or developing leaders from within, lack of talent longevity creates significant skill gaps as well as a smaller talent pool of high-potential employees. Future profit requires future leaders. Future leaders want an effective, modern culture in the present, including clear personal reasons to stay at a job other than the benefit of an employer’s brand name.

› Loss of core knowledge. There is limited time to understand what should intentionally be brought forward from previous generations. Without transferring knowledge, profit loss can be significant and unpredictable. For example, an aerospace company went through a period of early retirements to cut back on costs during the recession. A few years later, they had to shut down a plant for two weeks because of a problem no one knew how to solve. They had to hire back retirees for the fix. Although boomers will not retire en masse, transferring core competencies built over a 40-year career takes significant time. Without creating an effective cross-generational culture, critical lessons, experience, and core values will be lost that could greatly impact profit.

› Decreased employee engagement. Gallup’s 2016 report also indicated that 55 percent of millennials are not engaged at work, the highest number of any generation. Ongoing industry-wide research has proven that organizations with highly engaged employees consistently outperform organizations with disengaged employees in the marketplace. Understanding how to engage millennials and digitally enabled talent is imperative to build a high-performing organization.

› Decreased access to top talent. Today, many organizations are engaged in talent wars, spending millions on recruiting top talent. Organizations usually compete with each other for talent, but organizations are also at war with talent itself. For a multitude of reasons, many millennials and especially gen Z are attracted to entrepreneurship and start-ups instead of the traditional 9 to 5. According to Millennial Branding’s 2014 study on high school careers, 72 percent of high school students, nearly three-quarters, want to be business owners someday. Internal workplace culture can be changed to match employees’ shifting expectations and thereby attract top talent.

With the many innovations in the last few decades, we have created a complex social paradigm. Older generations want younger generations to behave in a way that is congruent with how the world was—to be able to replicate today the practices that engaged and retained employees “well enough” yesterday. With the exception of a relative few, that’s by and large what the generations that preceded them did: focused on assimilating the new to the old. Yet so much has changed that the gap is wide between what an older generation expects and what a younger generation knows to do or believes is right.

Moreover, the creator of the gap, digital technology, is not going away. Unsurprisingly, since we all live in this digitally enabled world, it is often said, “Millennials want what everyone wants!” If that is the case, why resist giving everyone the changes they want? Traditional-minded leaders continue complaining about the latest generation instead of engaging in the timeless generational practice of shifting from complaints to serving as mentors, showing millennials the ropes, and acknowledging forward-thinking practices. The negative perception of millennials by older generations can be validated and reinforced by the Internet and other media, stopping the inclination to offer acceptance that someone once did for older generations in their early career days. However, we can successfully navigate these uncertain, unknown waters and build a bridge into the future by fairly and thoughtfully considering both established experiences and new perspectives of the way we work.

Through my research, it has become clear that the changing behavior highlighted by millennials is indicative of evolving needs for all of us, that is, all digitally enabled talent. Through offering an incomplete, biased picture of millennials, we have created a critical barrier to the modernization of the workplace. The potential upside for letting go of our stereotypes, reestablishing understanding, and acting purposefully is immense. Boomers, gen Xers, and millennials can form relationships where knowledge is transferred, productivity increases, and supportive community is built. We can be better prepared to attract, engage, and retain generation Z as they enter the workplace and avoid the challenges experienced with millennials. We can feel more empowered ourselves, knowing that we are not just doing what we have always done, but are doing the right things.