Engagement & Retention of Millennial Employees - A Policy Advocacy Memo
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Engagement & Retention of Millennial Employees - A Policy Advocacy Memo

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A general discussion of employee engagement, specifically the engagement of millennial employees, which then discusses four policy recommendations for increasing engagement and advocates for the ...

A general discussion of employee engagement, specifically the engagement of millennial employees, which then discusses four policy recommendations for increasing engagement and advocates for the policy most appropriate.

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  • https://www.youtube.com/watch?v=dSfDROxCuxI
  • One out of every five employees, for example, now cares for an elderly parent.Women, who tend to report a preference for more free time over more money, now make up nearly 60 percent of the US workforce. Men’s attitudes about long hours seem to have changed as well: 80 percent say they would like to work fewer hours
  • While most orga-nizations spend millions of dollars on training today, most are not sure exactly where this massive investment is spent or what results, if any, it delivers

Engagement & Retention of Millennial Employees - A Policy Advocacy Memo Presentation Transcript

  • 1. ENGAGEMENT & RETENTION OF MILLENNIAL EMPLOYEES April 7, 2014 Kayla Cruz- Florida International University Policy Advocacy Memo
  • 2. Problem Statement  Recent survey results indicate that employee disengagement has a negative impact on both employers and employees  For this reason, the development of effective HR strategies will prove to be crucial, as the success of organizations is highly dependent on their ability to attract, engage, and retain top talent  The ability to effectively hire, retain, and engage talent is the true competitive advantage of an organization
  • 3. EMPLOYEE ENGAGEMENT MATTERS Source: ENGAGE, 2013
  • 4. Employee Engagement Findings  Only one out of every five workers today is giving full discretionary effort on the job  Put another way, almost four out of five workers are not living up to their full potential or doing what it takes to help their organizations succeed  This “engagement gap” poses serious risks for employers because of the strong connection between employee engagement and company financial performance Source: Towers Perrin Global Workforce Study 2007-2008
  • 5. Financial Impact of Engagement The Towers Perrin Global Workforce Study cites a recent study in which 50 global companies were reviewed over one year to assess the financial impact of employee engagement Source: Towers Perrin Global Workforce Study 2007-2008
  • 6. Engagement & Retention The Towers Perrin Global Workforce Study reports the following: • 51% of engaged employees have no plans to leave their employer • 78% of disengaged employees would consider another offer, are actively looking for other jobs, or have already made plans to leave Source: Towers Perrin Global Workforce Study 2007-2008 How Engagement Affects Retention Engaged Disengaged No Plans to Leave Not Looking, But Would Consider Another Offer Actively Looking For Another Job Made Plans to Leave Current Job Plan to Retire in the Next Few Years 39% 4% 2% 51% 15% 35% 28% 15% 7%5%
  • 7. Employees Want to be Engaged  “…our respondents care deeply about the world around them and generally feel positive about their work, their jobs and their lives. Most are looking to join and stay with a secure organization that allows them to grow and develop a career. And they’re willing to invest more of themselves to help their company succeed.” Source: Towers Perrin Global Workforce Study 2007-2008
  • 8. Engagement & Diversity Source: Towers Perrin Global Workforce Study 2007-2008  Different employee groups = varying interests and perceptions at differing points in their careers  Today’s organizations are conducting extensive research on workforce views, needs, and perceptions to better understand their employees  “This leads to a competitive edge in attracting, retaining and engaging employees, as well as in channeling employees’ energy and brain power most effectively”
  • 9. Engagement Across Generations Source: Towers Perrin Global Workforce Study 2007-2008
  • 10. Millennials Defined  “The American teens and twenty-somethings who are making the passage into adulthood at the start of a new millennium”  Roughly between the ages of 18-29  Born between early 1980s – early 2000s  Recent college graduates  Young professionals Source: Pew Research Center, 2010
  • 11. Millennial Workplace Values  1/2 of Millennials would rather have no job than a job they hate  3/5 of Millennials feel that they will switch jobs in less than 5 years  1/4 of Millennials say that they are completely satisfied with their current job Source: Red Tree Leadership & Development, 2012
  • 12. Importance of Millennial Engagement Source: VisionSpark
  • 13. Cost of Millennial Turnover  Survey of HR Professionals in various industries reported the following:  87% of companies reported that it costs between $15,000 to $25,000 to replace each millennial employee  30% of companies lost 15% or more of their millennial employees in the past year  71% of companies reported that losing millennial employees increases the workload and stress of current employees  56% of employers revealed that it takes between 3 and 7 weeks to hire a fully productive millennial in a new role Source: Millennial Branding & Beyond.com Cost of Millennial Retention Survey
  • 14. Suggested Policy Alternatives 1 • Increased Salaries/Compensation 2 • Flexible Work Arrangements 3 • On-Boarding/Employee Development Initiatives 4 • Development of Employee Skills & Interest Databases
  • 15. Evaluative Criteria Cost Effectiveness Political Feasibility Rating of Alternatives from Least Favorable to Most Favorable: 1 = Poor 2 = Average 3 = Good 4 = Excellent
  • 16. Stakeholder Analysis Millennial Engagement Employers Non- Millennial Employees CustomersCommunity Millennial Employees
  • 17. Alternative #1: Increased Salaries/Compensation  Organizations can increase salaries/compensation  At time of initial base salary negotiation  At time of annual performance review  Focus on “Total Rewards” aka “Pay and Perks”  Compensation  Benefits  Paid Time Off  Retirement Plans
  • 18. Increased Pay Attracts Employees… Source: Towers Perrin Global Workforce Study 2007-2008
  • 19. But it Doesn’t Retain Employees Source: Towers Perrin Global Workforce Study 2007-2008
  • 20. • Would involve a significant increase in the cost of labor (Rating = 1)Cost • May not prove to be effective as Millennials do not rank competitive pay as the primary motivator for increased engagement (Rating = 1) Effectiveness • Would not likely appeal to organizations as they attempt to cut back on costs (Rating = 1) Political Feasibility Evaluation of Alternative #1: Increased Salaries/Compensation
  • 21.  New strategies regarding when, where, and how work gets done:  Working from home  4-day work week  Limitless vacation time  Varied start & end times  Seek to meet the work/life balance that employees desire Alternative #2: Flexible Work Arrangements Source: HUMAN CAPITAL TRENDS SURVEY, 2014
  • 22. Source: Working Mother Magazine
  • 23. • Not as costly as other alternatives • May be costly in terms of wasted compensation if employees are not truly working (Rating = 3) Cost • Would allow employees the work/life balance they seek leading to higher engagement and longer tenure with organizations (Rating = 2) Effectiveness • Some employers may not trust that work will be completed at home • Flexible work arrangements may not be feasible for all job functions (Rating = 2) Political Feasibility Evaluation of Alternative #2: Flexible Work Arrangements
  • 24.  On-boarding initiatives strive to prepare employees to succeed in their work environment  Employee orientation  Discussion of employer/employee expectations  Programs that discuss & promote workplace culture  Employee development  Focus on career growth and expansion of employee skill sets Alternative #3: On-Boarding/Employee Development Initiatives
  • 25. Problems With Traditional EDPs • Tend to focus primarily on topics such as resume building, networking, interview process, etc. as opposed to specific technical skills1 • Don’t always provide opportunities to actually implement the skills developed2 • Some organizations are making employee development mandatory, which puts additional stress on employees who may not be interested3
  • 26. • Can be very costly • Traditional employee training represents a $130 billion global market (Rating = 2) Cost • Allows employees to learn and develop new skills, but often fails to provide avenues for employees to put new skills into practice (Rating = 3) Effectiveness • Initially may be politically feasible, but as time passes, senior executives may become concerned with effectiveness of programs due to high cost (Rating = 3) Political Feasibility Evaluation of Alternative #3: On-Boarding/Employee Development Initiatives
  • 27.  Matching employee skills & interests with employer needs  What are employees good at?  What are employees interested in?  How can we use those skills & interests to benefit the organization?  Employers can and should leverage Millennials’ inexperience & desire to learn  Allowing them opportunities to develop various skills of interest  Encouraging stretch assignments (projects outside of their normal job functions)  Providing opportunities to connect with professionals from various fields Alternative #4: Development of Employee Skills & Interest Databases
  • 28. Moving Away from Traditional EDPs Source: PWC, Millennials at Work Survey, 2011 Creation of Skills & Interest Database would allow for these opportunities… …and move away from these traditional learning practices Which of the following training/development opportunities would you most value from an employer?
  • 29. Millennials Want to Learn… Source: Johnson Control’s Generation Y in the Workforce Report, 2010  Today’s employees value meaningful work and learning opportunities
  • 30. Millennials Want Career Growth… Source: Towers Perrin Global Workforce Study 2007-2008
  • 31. … And It’s In The Best Interest of Organizations to Provide These Opportunities  People value workplaces that contribute to their personal development as professionals  Millennial employees prefer working for companies that invest in developing their capabilities and keeping their skill sets relevant through constant learning and development opportunities  Talented people seek out opportunities to grow, and they will flock to organizations that provide ample opportunities to do so  Severe impact on retention…  If people are developing more rapidly than they could anywhere else, why would they leave?
  • 32. • Not costly long-term • Cost associated with initial set-up (Rating = 4)Cost • Would allow employees to learn new skills, apply skills already developed, and engage in meaningful work that they enjoy (Rating = 4) Effectiveness • Likely to be embraced by administrators as it provides value to the organization • Efficient use of human capital resources • Allows for additional completion of work (Rating = 4) Political Feasibility Evaluation of Alternative #4: Development of Employee Skills & Interest Database
  • 33. Policy Analysis Matrix Alternative 1 INCREASED COMPENSATION Alternative 2 FLEXIBLE WORK ARRANGEMENTS Alternative 3 EMPLOYEE DEVELOPMENT Alternative 4 SKILLS & INTEREST DATABASE COST 1 3 2 4 POLITICAL FEASIBILITY 1 2 3 4 EFFECTIVENESS 1 2 3 4 TOTAL SCORE 3 7 8 12 Recommendation: Development of Employee Skills & Interest Database