In my work consulting on employee recognition and rewards, one question I hear repeatedly centers on the perceived Millennial/Gen Y need for constant feedback and praise, often linked with the trend for Millennials to remain in a position for less than two years.
What does one have to do with the other?
I think both are more indicative of life phase than of their generation. On the question of praise, I’ve been known to say that all of us (regardless of our generation) sought praise for our work when we were in our 20s. And that’s a good thing. Indeed, I would be concerned if that wasn’t the situation. For many employees at this very early stage of their career, they are not saying, “Look at me! Aren’t I wonderful?” No, they are asking, “I’m learning new skills here and doing things for the first time. I’m not sure I’m doing it right. Please give me lots of feedback, early and often.”
As for the challenge of Millennial retention, this is quite real. Attributed to many factors (immaturity, lack of focus, lack of loyalty), the real reasons behind Millennial tendencies to switch jobs quickly are likely as myriad as the people who make up the generation.
The sobering reality is that many Millennials are making the right move for their current and future earning potential. The Federal Reserve Bank of New York issued a report discussed in the Washington Post:
“Your first 10 years in the labor market likely shape your lifetime earning potential.
“‘Across the board, the bulk of earnings growth happens during the first decade,’ wrote economists Fatih Guvenen, Fatih Karahan, Serdar Ozkan and Jae Song, who studied the career paths of about 5 million workers over nearly 40 years.
“The jump in pay could be largely driven by the steep learning curves early in your career, said Guvenen, an economics professor at the University of Minnesota.”
If Millennial employees aren’t seeing a good, rapid career path in your organization (including corresponding pay increases), then they are acting in their best interests to switch jobs throughout their 20s to increase their lifetime earning potential. I can think of few stronger arguments for excellent training, development and career advancement programs.
We all know the high cost of turnover. Recruiting, training, learning curves – they all add up to 50-200% of base salary to replace an employee. It’s inarguably a far better use of those funds to develop promising employees and advance them in your own organization.
Bringing this post full circle, how does this tie back to Millennial need for recognition? It’s not all about the career path. Sure, promotions and corresponding pay raises are a form of recognition, but that is a finite resource. Bersin by Deloitte research tells us:
“Organizations with recognition programs which are highly effective at enabling employee engagement had 31% lower voluntary turnover than organizations with ineffective recognition programs.”
The two approaches must go hand-in-hand: regular, frequent, timely and specific recognition to reinforce desired behaviors and outcomes in the moment plus appropriate career advancement opportunities in line with skills. In fact, your social recognition efforts can be useful in using the wisdom of the crowd to help identify those most deserving of more rapid advancement (and therefore retention) in your organization.
What’s your retention record with Millennials? How does your organization work to foster longer-term relationships with these key, motivated employees?
As Globoforce’s Head of Strategic Consulting, Derek Irvine is an internationally minded management professional with over 20 years of experience helping global companies set a higher ambition for global strategic employee recognition, leading workshops, strategy meetings and industry sessions around the world. He is the co-author of "The Power of Thanks" and his articles on fostering and managing a culture of appreciation through strategic recognition have been published in Businessweek, Workspan and HR Management. Derek splits his time between Dublin and Boston. Follow Derek on Twitter at @DerekIrvine.