Turnover is a critical concern for most organizations that pour significant time, effort, and expenses into hiring the right candidates and bringing them up to speed. In fact, an early exit costs the company in both profits and productivity. Bersin by Deloitte has put the cost of losing an employee from tens of thousands of dollars to 1.5–2.0x the employee’s annual salary. This cost is a result of onboarding and hiring activities, cultural impacts, time loss to reach peak productivity, business errors, and so on. It is thus essential to retain employees, they are after all your most valuable assets. The what and why of retention management depends on who you want to retain and to what extent.
Millennials’ unique expectations
Retention Management cannot be a one-size-fits-all strategy. Employers must understand the drivers of each employee and cater to their expectations, wherever relevant. This presents a unique challenge, as far as retaining millennials is concerned. In fact, millennials (those who are born after 1980, as per Pew Research) are set to be amongst the largest chunk of workforce- nearly half the working population (46%) in the US- by the year 2020. Their unique experiences are continuously reshaping employer-employee relationships, especially their ingrained affinity for digital, social sharing, and mellowed economic status owing to various debts. On one hand, organizations perceive them as being job-hoppers, attention-seekers, freedom-addicts, social sharers, etc. On the other hand, organizations want to leverage their unique capabilities i.e. digital-savvy, enterprising, openness to new challenges, and high growth propensity, to name a few. This discord makes employers struggle with engaging and retaining millennials in the workplace. That’s where a customized retention strategy for millennials becomes essential.
Setting the expectations, and meeting them
Organizations must understand and acknowledge that the engagement drivers of millennials will be substantially different from Baby Boomers or Gen X. Here are some of the motivators that will help HR and business leaders get millennials to be their best productive selves at work:
1. Offer growth opportunities
Typically, millennials value overall workplace perks and benefits much more than direct compensation. In a PwC survey, 44% of millennials reported competitive wages as a motivator, while 52% stated growth opportunities. Employers must design career paths that foster millennials’ high ambitions and growth-driven.
2. Cultivate a culture of transparency
Millennials value open and transparent communication and expect it to be an integral part of the company culture. Make sure you create a sense of community by encouraging open discussions and talking logic. Build continuous feedback into the performance management process. Ambiguity and lack of information can raise the red flag and quickly disengage millennials.
3. Minimize traditional hierarchies
Millennials are all for bridging formal associations and “sharing” and “connecting” as equals. A flatter organizational structure may appeal more to millennials, because they will feel heard, and will see opportunities to grow based on capability rather than on longevity. In fact, Forbes found that millennials are no longer willing to wait 3-5 years for a promotion, they expect fast growth in multi-dimensions. Design a performance management system that values contributions, over tenure. And offer cross-functional growth opportunities to make a flatter organization structure effective.
4. Harness their skills
Millennials have many skills that veterans can learn from, for example, social media savvy. Harness those skills by instating processes like reverse mentoring. This will not only make millennials feel valued as employees, but also help build relevant modern skills from within.
5. Go digital
Millennials are the digital natives, they inherently prefer digital over physical presence. Employers must create a strong social and digital presence, only then will prospective employees from this age group relate to the brand and be willing to join and stick around. After all, 62% of millennials are more likely to be loyal to companies that they can engage with online.
Organizations must position themselves as millennial-friendly, by incorporating the following engagement and retention strategies, if they wish to attract and retain millennials. For this, the above elements must be ingrained into the talent management strategy, every step of the employee life cycle leveraging technology.
How to use technology for retaining millennials
To make retention sustainable, employers must understand their peoples’ motivators and demotivators on an individual, personalized level. The best way to do this is to embed it into the talent management systems, where relevant stakeholders can access and highlight any retention challenges. We are seeing emerging technologies such as cloud, mobile, analytics, artificial intelligence, etc. finding applications in the field of retention management. For example, Biz Merlin’s retention management module offers a highly customized, person-wise analysis of employees’ retention statuses. As Dr. Amrinder Arora, CEO and co-founder of BizMerlin puts it, Artificial Intelligence can help adequately capture the goals and incentives of diverse workforce categories, right from Millennials to Baby Boomers. The AI algorithms can be designed to steer employee growth and incentivize productivity based on each employee’s personal preferences and achievable skills. The BizMerlin retention application applies these very principles and follows a three-fold approach to flag off probable exits, early on and prevent cost and reputational damage to the company.
1. Define engagement/retention drivers
Define the key bucket areas which act as motivators or demotivators. For example, you can define “Compensation and Benefits”, “Job Satisfaction” and “Personal Concerns” as core areas on which you assess employees’ engagement levels.
2. Define flags under each driver
Once an employee concern is categorized under a bucket driver, it is still important to know the exact cause for an employee to become a potential case. Therefore, each driver can be further categorized into “flags” or specific “red alerts”. For example, “Compensation and Benefits” can comprise flags like “Low Salary”, and “Not happy with benefits”. “Personal Concerns” can include “Family issues” or “Health issues”. This helps HR and line managers know the exact cause of dissent, and accordingly plan retention interventions.
3. Quantify engagement
The above points provide qualitative insights into employees’ retention status, but this needs to be quantified so as to track and analyze retention levels over a period of time. Having a “retention score” assigned to each employee will help compare and prioritize retention actions. HR can gain visibility to particular pain areas, for example- more number of exits under a particular department or supervisor.
For millennials, HR must devise and define these retention drivers and flags differently, in order to get the true picture of their engagement levels and the possibility of retrenchment. This data should serve as the foundation to design various interventions, from retention discussions to engagement activities. Such as systematic qualitative-cum-quantitative approach will definitely help identify exits early on, providing HR and business leaders committed to using the system.