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What Matters Most to the Millennial Workforce
Compilation by Dr. Elmer Lenzen

The conversation around millennials and Generation Z is old news? Well, by 2020 they will form 50 percent of the global workforce. In fact, business leadership is becoming millennial. Therefore, it is better to forget the frustrations of managing and influencing these folks. They are about to be in charge soon. So, it might be time to assess our attitudes to those born between 1980 and 2000. 
  
“The contract between the organization and the individual is beginning to change,” says Lynda Gratton, Professor of Management Practice at London Business School (LBS). “The old contract looked like this: ‘I work to buy stuff that makes me happy.’ The contract is negotiated by tangible assets. The new contract will be, ‘I work to make me happy.’ We have to think about work as being the thing, not the money you get from it. I don’t see many companies realizing how profound that change will be.”
The fact that purpose tops the agenda for millennials is backed up by PwC’s recent Workforce of the Future survey, which found that 88 percent of them want to work for a company whose values reflect their own. Millennials will comprise 75 percent of the global workforce by 2025. 

The Deloitte 2017 Global Human Capital Trends report similarly found that most millennials look beyond a company’s financial performance when deciding whether or not to work there. Only one in five survey respondents said they would choose to stay at a solely profit-driven company for more than five years.

Profit with purpose the new norm?
 
“Profit with purpose is set to become the new norm,” said Antonio Zappulla, CEO Designate of Thomson Reuters Foundation, at this year’s World Economic Forum in Davos. “Up to this point, social enterprise and impact investment have been driving this concept, which has somehow remained confined to a niche. Not anymore. Now, it’s all set to change: The CEOs of the future will want their companies to be recognized as forces for good. In business, CEOs have gone from being symbols of aspiration to objects of intense scrutiny,” he explained. “Even the younger, ‘cooler’ entrepreneurs, the kick-starters of the shared economy, are now being asked questions about the impact their companies have on society. Trust has become the ultimate currency.” 

“There has to be a strong connection between what your company wants to do and be, and what you want to do and be,” advises Richard Hytner, Adjunct Professor of Marketing at LBS. “If you can’t see any connection at all, you’re in the wrong place. Don’t expect your company to find that connection. There are many things you can – and should – delegate responsibility for in life. Your personal purpose is not one of them.”

The Associate Professor of Strategy and Entrepreneurship at LBS, Dr. Ioannis Ioannou, adds: “When companies are genuinely committed to purpose and sustainability, it is reflected in their governance structure. The top of the organization sets the tone and signals a credible pledge to purpose.” 

ESG performance also an indicator for talent recruiting?

“Responsible businesses have a governance structure that monitors and advises on environmental, social, as well as financial issues,” Ioannou continues. “When leaders understand and thrive within the broader social and environmental context in which their businesses operate, it also signals to employees, investors, and key stakeholders how important purpose really is.”

Ioannou cites Intel as a strong example in this area. The company has made social responsibility everyone’s job, with clear sustainability goals. “In 2008 the leadership team took a bold step and tied environmental performance to employee compensation,” he says. “Since then, Intel has continued to rally the troops through a series of responsible competitions and sustainability projects. The winning teams receive environmental excellence awards and a pay bonus.”

He advises senior executives to follow suit by setting ambitious targets and providing generous incentives that fully reflect their organization’s purpose. “You fail to send out a consistent and credible message when, for example, social responsibility is part of your company’s media rhetoric, yet only financial performance is incentivized.” 

Positive perception of companies declines
 
The Deloitte Millennial Survey 2018 shows a clear, negative shift in millennials’ feelings about business’ motivations and ethics. Today, only a minority of millennials believe businesses behave ethically (48 percent vs. 65 percent in 2017) and that business leaders are committed to helping improve society (47 percent vs. 62 percent in 2017).

There continues to be a stark mismatch between what millennials believe responsible businesses should achieve and what they perceive businesses’ actual priorities to be – but where matches exist, the perception is that those companies are more successful, have more stimulating work environments, and do a better job of developing talent. 

Diversity and flexibility are key to loyalty

Forty-three percent of millennials envision leaving their jobs within two years; only 28 percent seek to stay beyond five years. The 15-point gap is up from seven points last year. Employed Gen Z respondents express even less loyalty, with 61 percent saying they would leave within two years if given the choice. 

Attracting and retaining millennials and Gen Z respondents begins with financial rewards and workplace culture; it is enhanced when businesses and their senior management teams are diverse, and when the workplace offers higher degrees of flexibility. Those who are less than satisfied with their pay and work flexibility are increasingly attracted to the gig economy, especially in emerging markets. 

Money still matters to millennials

Paul Polman, former CEO of Unilever, once told a business-school audience: “You need to have something where you want to have an impact and that aligns with your values. It will drive your passion. People’s self-worth should not be measured by their net worth.”

Millennials do not want to work for an organization that is driven only by profit, but nevertheless money still matters. Successful companies offer a smart mix of salary and benefits as well as a good work–life balance and leadership opportunities to attract the best talents. 

According to PWC’s Next Gen Survey, the new workforce generation believes in flextime and that productivity should be measured by the quality of work rather than the amount of hours spent in the office.
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