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Just the Facts About Millennials

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BERSIN & ASSOCIATES
Research Bulletin | 2011

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  • 1. Research Bulletin | 2011 BERSIN & ASSOCIATES November 17, 2011 Volume 6, Issue 58 Just the Facts about Millennials (And How Organizations Are Supporting Them) About the Author According to popular media and sensationalist authors, the generations are “colliding” and “crashing,” a scenario more akin to a NASCAR race than a day at the office. The drama is perpetuated by a real difference in perspectives, attitudes and behaviors of older and younger workers. To wit – in 1965, a 20-year old Pete Townshend of The Who lamented in his song, “My Generation,” “People try to put us d-down, just because we get Brenda Kowske, Ph.D., Senior Analyst around. Things they do look awful c-c-cold, I hope I die before I get old.” Harsh words, but the lyrics have been sung by every generation since. Another music group, Green Day, released an album cover in 2001 and Hillary Duff covered it in a 2004 song. Boomers, Gen-Xers1 and Millennials2 alike – generations just cannot seem to understand each other’s choices. Introduction As the diplomats of industry, HR is challenged to create a workplace that is structured enough to get work done, but flexible enough BERSIN & ASSOCIATES, LLC 180 GRAND AVENUE SUITE 320 OAKLAND, CA 94612 (510) 251-4400 INFO@BERSIN.COM WWW.BERSIN.COM to accommodate employees of various cultures and backgrounds, genders, and ages – not to mention work and leadership styles, 1 “Generation-X” are those individuals who were born between 1961 and 1981. 2 “Millennials” (also known as “Generation-Y”) are those individuals who were born between 1982 and 2003. BERSIN & ASSOCIATES © 2011
  • 2. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN & ASSOCIATES BERSIN & ASSOCIATES KEY POINT This research bulletin cuts education levels, and skills sets. HR’s job is even more complex when it comes to generational differences; there are so many stereotypes to sort through, that it is almost impossible to create programs and make decisions based on fact. through Millennial This research bulletin reviews the facts – the published empirical stereotypes and research – to answer the question, “Just how different is the Millennial reports facts found generation?” Once we understand the Millennials, we can turn in research. our attention to how they are supported by HR and managed by their bosses. This research bulletin reveals the gaps between what Millennials need at work and current practices, giving clear direction f or improvement. The Changing of the Guard A generation’s identity is at the crosshairs of age and history. When a major historical event occurs, like a world war, a breakthrough in technology or a natural disaster, older and younger people experience them differently. As we grow older, people’s ideas and perspectives change with age – but this is not always based on their generation. For example, younger people tend to have more angst and older people are more conservative – but these differences are the same regardless of generation. When we read reports of generational differences and the stereotypes they imply, we are attempting to describe and understand the identity of that generation3, not their perspectives due to their ages. Societies are motivated to understand each new generation’s identity because it will literally change the world. The ebb and flow of generations change society through what has been called, “demographic metabolism4.” As a new generation is socialized by older people into their culture, the younger generation simultaneously brings their own unique experience of the events occurring around them. BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM 3 Often, research labeled “generational” actually might be reporting age-related differences in opinions or perspectives. Only time-series or longitudinal designs can adequately statistically control for age by comparing the generations when they were the same age. For this report, we have attempted to review the research with an emphasis on true generational, not age-related, differences. 4 Source: “The cohort as a concept in the study of social change,” American Sociological Review / N.B. Ryder, 1965. Just the Facts about Millennials Brenda Kowske | Page 2 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 3. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES The new generation’s identity works as a change agent, counteracting conservative societal forces, and reshapes culture, societal values, politics and industry5,6. As members of the young generation grow up, their perspectives and values will undoubtedly bring about change – but what kind of change KEY POINT In the U.S., 28 percent of managerial positions are is uncertain. For example, the GI and Silent Generations (the parents of the Boomers) had no idea that their children would make giant leaps toward racial equality in the 1960s. In their youth, the Boomers took to the streets and raised their voices; they touted that “separated but equal” was not equal at all. After 60 years of brutal discrimination, they brought a country together like never before. already held by Millennials, too, will have a chance to make their mark on history as Millennials. they rise to prominence in industry. By 20297, the U.S. workforce will have waved “bye-bye” to the Baby Boomers (Boomers – ages 51 to 68 at press), leaving Generation-X (Gen-X – ages 30 to 50), the Millennials (ages 8 to 29) and their successors at the helm of organizations.8 But how will they lead? Twenty-eight percent of managerial positions are already held by Millennials, which is enough talent to succeed Boomers’ share of leadership positions at 23 percent9; Gen-X comprises the remainder.10 In other words, we have a pipeline full of Millennials on their way up the ladder. Undoubtedly, Millennials have not ascended to the same level 5 Source: “The problem of generations,” Essays on the sociology of knowledge / K. Mannheim, Routledge Kegan Paul Ltd., 1952. 6 Source: “The cohort as a concept in the study of social change,” American Sociological Review / N.B. Ryder, 1965. 7 Source: U.S. Bureau of Labor Statistics, retrieved July 15, 2011, http://www.bls.gov/cps/ home.htm. 8 BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM Source: Generational age definitions from, Generations: The history of America’s future, 1584 to 2069, W. Strauss N. Howe, William Morrow Company, Inc., 1991. 9 Data reported from the Bureau of Labor Statistics’ Current Population Survey is aggregated into age ranges that do not directly reflect the generational limits used in this paper, but which are a close approximation. They are, in 2011, Millennials aged 16-34, Gen-X aged 35-54, and Boomers aged 55 and older. 10 Source: U.S. Bureau of Labor Statistics, Current Populations Survey Q2’2011, retrieved on September 15, 2011, http://www.bls.gov/cps/demographics.htm. Just the Facts about Millennials Brenda Kowske | Page 3 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 4. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES of management as Gen-Xers or Boomers – yet. When they come of age, Millennials’ unique characteristics will drive change and reshape the workplace. Already ahead of the game, this research bulletin reveals that HR and management have started to adapt. What We Know Today about the Millennials In our attempt to peer into the future of the workplace, we shine a light on young employees today. By looking to empirical research KEY POINT (which has been conducted primarily in North America), we can describe the youngest employees as a generation and answer the question, With regard to who are the Millennials, and how do they compare to Gen-Xers the description of a nd Boomers? Millennials, these There are important caveats to consider when reading this research. are educated generalities • This research bulletin does not directly address how Millennials are similar to older generations’ identities. However, we have derived from attempted to review all research on generational differences on statistics, which work-related traits and attitudes. If it is not here, we can assume can only describe a that they are similar to other generations or the perspective in group and are not question has yet to be tested. meant to be cast onto individuals. • That being said, many age-related differences may occur between workforces; differences due to age are far more likely to be the culprit of differences at work. The remaining conclusions should be tempered – in general, academics studying generational differences agree that differences between generations are rare and o ften small.11 • With regard to the description of Millennials, it goes without saying that these are educated generalities derived from statistics – statistics can only describe a group and are not meant to be cast onto individuals. BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM Caveats aside, rigorous empirical research has found some unique Millennial traits, which are recapped in Figure 1 and discussed in the following section. 11 Source: “Millennials at work: What we know and what we need to do (if anything),” Journal of Business and Psychology / J.J. Deal, D.G. Altman, and S.G. Rogelberg, 2010. Just the Facts about Millennials Brenda Kowske | Page 4 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 5. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES KEY POINT Statistics only describe groups; individual According to this review, Millennials, as a generation, are as follows. Individualistic and Confident Figure 1: Unique Traits of Millennials – Based on Research Millennials Are: Millennial employees might Individualistic and confident not share these traits. Starting adult life with less knowledge Motivated, but more likely by offering “rewards” Looking for balance More satisfied with work More likely to leave their company, similar to young workers in every generation Source: Bersin Associates, 2011. Millennials had lower scores in altruism, coupled with higher narcissism, assertiveness12, self-esteem13 and individualistic traits in general14. These results contradict a commonly held stereotype that more Millennials are socially focused and motivated by giving back to society. In actuality, Millennials think they volunteer less than Boomers.15 The data concurs. As a testament to the decline in altruism, the Corporation for National 12 Source: “Age and birth cohort differences in self-esteem: A cross-temporal metaanalysis,” Personality and Social Psychology Review / J.M. Twenge, and S.M. Campbell, 2001. 13 BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM Source: “Egos inflating over time: A cross-temporal meta-analysis of the Narcissistic Personality Inventory,” Journal of Personality / J.M. Twenge, S. Konrath, J.D. Foster, W.K. Campbell, and B.J. Bushman, 2008. 14 Source: “A review of the empirical evidence on generational differences in work attitudes,” Journal of Management and Psychology / J.M. Twenge, 2010. 15 Source: “How young people view their lives, futures, and politics: A portrait of “generation next,” The Pew Research Center, January 2007, http://pewsocialtrends.org/ files/2010/10/300.pdf. Just the Facts about Millennials Brenda Kowske | Page 5 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 6. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES and Community Service16 reports a Millennial volunteer rate lower than that of their older counterparts since data collection began in 2003 (see Figure 217). This data suggests a trend toward a confident, albeit selfserving, talent pool. Figure 2: Volunteerism Rates in the U.S. – By Year 40.0% Percent of Generation Volunteering 35.0% 33.5% 33.2% 33.1% 30.4% 30.0% 26.9% 25.0% 25.9% 29.9% 29.4% 29.8% 29.2% 27.7% 27.4% 28.9% 26.5% 25.5% 26.6% 28.8% 21.5% 21.6% 21.2% 2008 2009 2010 27.6% 25.2% 21.7% 20.0% 20.5% 15.0% 2003 2004 2005 Millennials (aged youngest to 29) 2006 2007 Gen-X (aged 30 to 46) Boomers (aged 47 to 65) Source: Bersin Associates, 2011. BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM 16 Source: “Current Population Survey,” Corporation for National Community Service, 2010, retrieved September 16, 2011, www.volunteeringinamerica.gov. 17 Source: U.S. Bureau of Labor Statistics. Just the Facts about Millennials Brenda Kowske | Page 6 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 7. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES Starting Adult Life with Less Knowledge Standardized test scores of high-school students in the U.S. continue to be at an all-time low18. This indicates that, at best, their knowledge gap is closed in college (for those students who attend) or they lack the knowledge crucial for responsibilities faced by adults, including their contributions to the workforce. Motivated, but More Likely by “Rewards” Millennials’ motivation for achievement is seemingly alive and well. Data shows that they are motivated to reach higher levels of education. Despite a lack of preparation in secondary school, a higher percentage of people than ever before are gaining bachelor’s degrees in American universities (31 percent)19, twice the number of college graduates of the youngest of the Baby Boomers. When we review actual productivity at work, motivation continues to shine. Even in high school, Millennials in the U.S. worked to the same extent as Gen-Xers and Boomers.20 Once graduated, they work equally long hours as older employees – longer hours than employees have ever worked in the past.21 Even though research investigating the work ethic 18 Source: “Millennials at work: What we know and what we need to do (if anything),” Journal of Business and Psychology / J.J. Deal, D.G. Altman, and S.G. Rogelberg, 2010. BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM 19 Source: “Millennials and the world of work: An economist’s perspective,” Journal of Business and Psychology / A.R. Levenson, 2010. 20 Source: “Millennials and the world of work: Experiences in paid work during adolescence,” Journal of Business and Psychology / J. Staff, and J.E. Schulenberg, 2010. 21 Source: “Generation and gender in the workplace,” American Business Collaboration / Families and Work Institute, 2006, http://familiesandwork.org/site/research/reports/main.html. Just the Facts about Millennials Brenda Kowske | Page 7 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 8. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES KEY POINT of Millennials has had mixed results (i.e., contradicting findings22,23,24,25), it seems as though motivation is an important part of their identity. Millennials are However, there are some signs that, although Millennials are putting the more satisfied hours in, the elements of work that motivate them may have changed. at work as a Some employees are motivated by an internal mechanism; they work by generational trait, the mantra “a job worth doing is worth doing well.” However, recent but as young research suggests that intrinsic, or self-motivated, work values have employees before them, are more slightly declined for this group26. Yet there is no difference in the value placed on external “rewards” like pay, recognition or status27,28. likely to leave their Looking for a Balance organizations. Speaking of work motivation, Millennials are motivated to achieve goals in both their work and personal lives. Work is less central to their life and their identity29; more younger workers today expect a meaningful life outside of work.30 22 Source: “Generational differences in work ethic: an examination of measurement equivalence across three cohorts,” Journal of Business and Psychology / J.P. Meriac, D.J. Woehr, and C. Banister, 2010. 23 Source: “Generational differences in work values: Leisure and extrinsic values increasing, social and intrinsic values decreasing,” Journal of Management / J.M. Twenge, S.M. Campbell, B.R. Hoffman, and C.E. Lance, 2010. 24 Source: “Generational differences in soft knowledge situations: Status, need for recognition, workplace commitment and idealism,” Knowledge and Process Management / P. Busch, K. Venkitachalam, and D. Richards, 2008. 25 Source: “More similar than different: Millennials in the U.S. building trades,” Journal of Business and Psychology / K. Real, A.D. Mitnick, and W.F. Maloney, 2010. 26 Source: “Generational differences in work values: Leisure and extrinsic values increasing, social and intrinsic values decreasing,” Journal of Management / J.M. Twenge, S.M. Campbell, B.R. Hoffman, and C.E. Lance, 2010. 27 Source: “Generation X and the public employee,” Public Personnel Management / C.L. Jurkiewicz, 2000. BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM 28 Source: “Generational differences in work values, outcomes and person-organisation fit,” Journal of Managerial Psychology / L. Cennamo, and D. Gardner, 2008. 29 Source: “Generational differences: Revisiting generational work values for the new millennium,” Journal of Organizational Behavior / K.W. Smola, and C.D. Sutton, 2002. 30 Source: “New generation, great expectations: A field study of the millennial generation,” Journal of Business and Psychology / E.S.W. Ng, L. Schweitzer, and S.T. Lyons, 2010. Just the Facts about Millennials Brenda Kowske | Page 8 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 9. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES As a Generation, More Satisfied with Work There is good news, too. American Millennials are more satisfied with their work than are Gen-Xers and Boomers. Where statistically significant (albeit small) differences exist, more are satisfied with their jobs and companies, the recognition they receive, their career development, and job security.31 As Younger Employees, More Likely to Leave Their Companies Fewer Millennials are considering a job switch than did Gen-Xers – when they were the same age.32 That being said, age matters. Today, one-third of Millennials are seriously considering leaving their jobs, as compared with 25 percent of Gen-Xers and 19 percent of Boomers.33 What Millennials Need from Organizations KEY POINT Confident, individualistic Unique workforce characteristics mean tailored programs and processes from HR and management. Given Millennials’ traits, Figure 3 reviews the programs that HR may want to consider strengthening in service o f Millennials. Millennials can The rugged individualism and confidence exuded by the Millennial fuel innovation by generation, coupled with their high levels of motivation, translate into questioning the programs that take advantage of their “I can do it” attitude. HR should status quo. look closely at its performance management system and processes. Does it enable Millennials to forge new paths, relying on their own competence in their drive toward success? Strong performance management processes (such as setting SMART34 goals, providing regular, systemic feedback, and measuring performance accurately) enable employees to know how they are performing 31 BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM Source: “Millennials’ (lack of) attitude problem: An empirical examination of generational effects on work attitudes,” Journal of Business and Psychology / B.J. Kowske, R. Rasch, and J. Wiley, 2010. 32 Ibid. 33 Source: Attitude? What attitude? The evidence behind the work attitudes of millennials, Kenexa High Performance Institute / B.J. Kowske and R. Rasch, 2011. 34 “S.M.A.R.T.” stands for specific, measurable, achievable, relevant and time-bound. Just the Facts about Millennials Brenda Kowske | Page 9 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 10. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES as individuals and take action accordingly – by their own volition. Organizations can take advantage of individualism in another way; harness the good ideas that come from not following the herd. Innovation derived from independent thinking can be a significant competitive advantage. Millennials are confident enough to speak up when questioning the status quo. But often, collaboration is needed to make ideas reality; an increased focus motivating this independent group toward a balance between independent thought and collaboration may be warranted. Figure 3: What Millennials Need at Work Millennials Are: Millennials Need: KEY POINT • Strong performance management practices and culture Bersin Associates Individualistic and confident • Programs that foster innovation research found that the size Starting adult life with less knowledge of a company’s employee Motivated, but more likely by offering “rewards” population has significant Looking for balance • Effective development programs • Recognition, such as pay-for-performance programs that demonstrate “fairness” • Targeted health and wellness programs relationship to the overall As a generation, more satisfied with work effectiveness of the HR function. As younger employees, more likely to leave their companies • Programs that capitalize on work satisfaction, like the development of high potentials35 and careers in general • Effective employee engagement programs and processes for recruiting, selecting and onboarding new workers Source: Bersin Associates, 2011. BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM 35 A “high-potential employee” is an employee who has been identified as having the potential, ability and aspiration for successive leadership positions within the company. Often, these employees are provided with focused development as part of a succession plan and are referred to as “HiPos.” Just the Facts about Millennials Brenda Kowske | Page 10 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 11. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES Less knowledge gained in high school for Millennials translates into remedial development efforts on the part of their employers. Strong development needs assessment practices, including an accurate understanding of the knowledge, skills and abilities required by the job, are essential. If confidence becomes overconfidence, Millennials might be blind to their own development needs. Honest feedback provides opportunities for accurate self-assessment – the first step in any development journey. Catering to Millennials’ independent spirit, HR should provide expanded venues for self-motivated learning. Finally, coaching and development systems in general should be fortified for organizations expecting a jump in hiring, perhaps due to a large wave of retirements. Beyond Millennials’ need for knowledge as a generation, these more inexperienced employees need additional educational opportunities. KEY POINT This is a motivated group, but less so through intrinsic motivations, such as fulfilling a personal value or being altruistic. This tendency would Work-life balance force external motivators, like rewards for goal achievement, to play a will be an larger role – and introduces an opportunity to implement or strengthen important aspect of the employment agreement; many Millennials will not recognition and pay-for-performance programs. The same SMART goals, along with more regular recognition and feedback previously mentioned, offer a natural parlay into fair, transparent and earned compensation. This group will be more open to setting pay expectations based on the attainment of goals. But HR beware. Millennials’ sacrifice dreams in individualism may mean that they are motivated to commit to goals of their personal life which the accomplishment is in their full control. Setting goals that rely for the achievement on others’ successes may act as a demotivator for this group. of career goals. This motivated workforce not only has its sights set on work, but also on home, as well. Work-life balance will be an important aspect of the employment agreement; many will not sacrifice dreams in their personal life for the achievement of career goals. The organization will need to demonstrate flexibility and provide arrangements so that both BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM are possible. Overall, the call to action should be tempered by the fact that Millennials, as a generation, are more satisfied at work than are GenXers and Boomers. HR should be careful not to change what works! This satisfaction can be harnessed through high-potential and career Just the Facts about Millennials Brenda Kowske | Page 11 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 12. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES KEY POINT development programs by developing satisfied employees into the next generation of leaders and experts. This future-focus may help to Do you have a counteract Millennial flight. high percentage of As with generations before them, younger employees leave Millennials in your organizations at higher rates. Even with their more positive attitudes workforce? Efficient toward work, the motivation to leave pulls harder as they jockey for and effective their ideal career path. If organizations provide a clear view of their recruiting, hiring career paths and the rewards, leaders and HR can capitalize on their and selection, and onboarding practices are interest in external rewards like status and pay. Additionally, HR should foster engagement, including through providing career opportunities. Employee engagement anchors employees firmly within the company, providing a force equal to tempting job offers. compulsory. High turnover also means higher volumes of applicants for open positions – especially those for which Millennials are qualified. If a high percentage of an organization’s workforce is comprised of Millennials, efficient and effective recruiting, hiring and selection, and onboarding practices are compulsory. The Report Card: How HR and Line Managers Are Supporting Millennials When we turn to the Bersin Associates data collected in 2010, we see that U.S. organizations have adopted some new approaches for managing a largely young workforce, but other practices remain the same regardless of workforce age. To find out the state of practice in relation to the generations, we compared 550 HR practitioners’ and leaders’ ratings by those in organizations employing primarily Millennial, Gen-X and Boomer workforces. We formed these groups by their responses to the question, “How would you categorize your workforce demographically?”36 Respondents placed their organizations in the following workforce categories: BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM 36 Respondents could also choose “fairly evenly distributed among ages” and “heavy concentration on mature and young workers, with a gap at the mid-career level.” But, since this report seeks to isolate the practices tailored to workforces of certain age groups, these categories were omitted from the analyses. Just the Facts about Millennials Brenda Kowske | Page 12 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 13. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES • Mature – Heavily weighted toward Baby Boomers and older (born 1964 or earlier); • Middle – Heavily weighted toward Generation-X (born 1965 to 1980); and, • Young – Heavily weighted toward Generation-Y (born 1981 or later). The size and demographic characteristics of each of these groups were reflective of each generation’s age and background. While the Boomer and Gen-X categories were roughly equal in respondent size (n=232 and n=259, respectively), the Millennials’ category was smaller (n=59). However, this comes as no surprise as only approximately onehalf of Millennials are currently old enough to be in the workforce. Generations also work in different industries, a likely reflection of educational opportunities and selection of careers in their youth. According to our data, these Millennial and Gen-X workforces are more likely to be in the banking and financial services, technology, and business services industries. Boomer workforces are more likely in the manufacturing, healthcare services and government sectors. Millennials are also more likely to work in larger companies, defined as those with 50,000 employees or more. The results of this research are summarized as follows. HR Has Adjusted to Gen-X’s Needs, but Less So to That of the KEY POINT Is HR supporting Millennials’ unique needs? Maybe not if their effectiveness is the same, regardless BERSIN ASSOCIATES, LLC of the generation AVENUE 6114 LA SALLE they serve. SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM Millennials Our first set of analyses targeted HR performance to answer the question, how have HR professionals adjusted their performance (as measured through self-ratings of effectiveness) given the age of the workforce they serve? Although similarities do exist, HR seems to have responded to Gen-X’s workstyle, but is still forming practices to respond to the emergence of the Millennials. In some cases, HR has adjusted to Millennials much in the same way it serves Gen-X workforces. We see evidence of these shifts in Figure 4 through the discrepancy between Gen-X’s and Millennials’ workforce data when compared to that of t he Boomers. Just the Facts about Millennials Brenda Kowske | Page 13 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 14. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES Similarities in Supporting the Generations – There are only two areas in which HR effectiveness is similar across Millennial, Gen-X and Boomer workforces – identifying critical knowledge, skills and abilities by role and level, and promoting health and wellness. Ignoring the fact that an average of only 32 percent of HR professionals rated themselves as “world class” or “very effective” across our list of HR responsibilities, we see that HR may want to improve its performance in specific ways to adjust to the emerging Millennial workforce. The lack of differentiation in HR effectiveness in defining critical knowledge, skills and abilities is particularly concerning. Working with mature workforces, HR should be particularly skilled in this area, given that one-quarter of the workforce is retirement-bound within the next 15 years. Only 33 percent of KEY POINT HR falls short in providing respondents said that HR was “very effective” or “world class” in t his area. Differences in Generational Support – We see evidence of HR adaptation in response to the arrival of Millennials (see Figure 4). When individualistic serving a Millennial workforce, HR has raised its level of effectiveness opportunities for in areas related to hiring, development and performance management. self-learning for These adjustments in HR’s performance match Millennials’ need for Millennials.  learning, their individualistic nature and their intentions to leave t heir companies. BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM Just the Facts about Millennials Brenda Kowske | Page 14 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 15. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES Figure 4: Differences in HR 57% Attracting, sourcing, selecting and hiring 54% 42% 42% Rapidly and effectively onboarding 45% 29% 39% Allocating high performers' compensation fairly 41% 34% 34% Promoting a highly engaged workforce 40% 28% 33% Motivating a high-performance culture 35% 19% 33% Distinguishing key talent segments 29% 39% 33% Encouraging innovation and collaboration 42% 30% 29% Identifying and developing future leaders 24% 25% Enabling a strong self-learning culture 24% 0% 10% 20% 30% 33% 36% 40% 50% 60% Percent Rating Very Effective or World Class Young (Millennial) Workforce Middle (Gen-X) Workforce Mature (Boomer) Workforce Source: Bersin Associates, 2011. There are some areas in which HR is falling short. HR may be attempting to mitigate Millennials’ higher turnover rates by improving engagement strategies when compared to organizations employing mature workforces. Thirty-four percent of HR serving Millennials rated themselves as highly effective. However, engagement efforts are most BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM effective when managing Gen-X workforces (40 percent) – a surprising gap, given the propensity of Millennials to leave. When it comes to Millennials’ education, fewer HR respondents reported that they were effective in identifying participants for development, specifically, their key talent pool (33 percent). A missed opportunity lies in the lack of effectiveness in providing self-learning (25 percent), an attractive development tool for this independent workforce. Just the Facts about Millennials Brenda Kowske | Page 15 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 16. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES Managers of Millennial Workforces Attract Top Talent and Support Engagement – Like HR, managers have catered to Gen-X, but seem to not have adapted as adeptly to Millennial workforces. According to HR respondents’ ratings of line managers’ competence on a four-point scale of “poor,” “fair,” “above average” and “world class,” there is quite a bit of room for improvement. Similarities in Managing the Generations – When HR rated line managers’ competence, they reported that five skills demonstrated no differentiation between workforce ages, indicating a lack of focus on each generation’s unique needs. According to HR, line managers showed similar skill levels in assessing and selecting the right candidate – a problem when Millennials are more mobile than Gen-X and Boomers and, therefore, interview at higher rates. They also set goals and objectives with equal competence; regardless of generation, younger workers will need more direction as they learn how to be effective at work. Managers’ scores in “giving people honest feedback” were equal across workforces, which might fall short of Millennials’ learning needs. When it comes to motivation on the job, not only will goals give them clear direction, but linking fair compensation to goal achievement has the potential to have more impact with this group. With their increased focus on personal and work-life balance, the fact that managers managing Millennials do not surpass Gen-X workforces in promoting health and wellness is troublesome, and may play a role in Millennial retention. Differences in Managerial Competencies – As in HR effectiveness, we KEY POINT More HR groups and managers should encourage BERSIN ASSOCIATES, LLC innovation – a 6114 LA SALLE AVENUE critical misstep SUITE 417 in Millennial OAKLAND, CA 94611 (510) 654-8500 management. INFO@BERSIN.COM WWW.BERSIN.COM see that more line managers are competent if managing Gen-X versus Boomer workforces (see Figure 5). More managers are attracting top talent proficiently (42 percent of organizations’ managers) than managers supporting mature workforces (29 percent). In the area of performance management, they are developing both a highperformance culture (29 percent) and engagement (37 percent) at the same level of competence as managers of Gen-X workforces. Managers of Millennials have further honed their skills in managing performance problems (36 percent), as well as coaching and developing their people (32 percent) – a trend perhaps indicative of managing younger, less experienced workers. Just the Facts about Millennials Brenda Kowske | Page 16 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 17. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES Figure 5: Differences in Managerial Competencies Attracting top talent 39% 29% Developing high levels of engagement 35% 25% Managing performance problems Encouraging innovation and collaboration 33% 27% Coaching and developing people Onboarding new staff 31% 25% Developing a high-performance culture 29% 16% Identifying and developing leaders 5% 10% 15% 35% 32% 22% 22% 16% 0% 41% 32% 19% 9% 37% 36% 30% 19% 42% 20% 25% 30% 35% 40% 45% Percent Rating Favorably Young (Millennial) Workforce Middle (Gen-X) Workforce Mature (Boomer) Workforce Source: Bersin Associates, 2011. KEY POINT Given their concentration in technology industries, taking advantage of However, those managing Millennials seem to still be adjusting in the areas on onboarding (31 percent), and encouraging innovation and collaboration (33 percent). As more Millennials are hired, more onboarding is needed – a critical activity when tasked with making this more mobile workforce productive as quickly as possible. Given their concentration in technology industries, taking advantage of the free-thinking Millennials and fostering innovation may be a critical the free-thinking competitive advantage. Millennials Figure 6 references results from Figures 1 and 2 to provide a “report and fostering innovation may be a critical competitive card” for HR and managers in their attempts to adapt to the unique characteristics of Millennials. This report card shows that HR and managers are responding to the Millennials’ unique needs, but there is also room for improvement. BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM Just the Facts about Millennials Brenda Kowske | Page 17 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 18. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES Figure 6: HR’s Effectiveness and Managerial Competence in Delivering What Millennials Need Millennials Are: HR Can Support Millennials with: HR Report Card Line Managers Should Manage by: Developing a highperformance culture Individualistic and confident Motivation for highperformance culture C Setting goals and objectives = C D D Encouraging innovation and collaboration A strong self-learning culture D Giving honest feedback Identification of critical job knowledge, skills, abilities Motivated, but more likely by offering “rewards” Fair rewards for high performance Looking for balance Health and wellness promotion Programs that identify and develop future leaders As a generation, more satisfied with work C Managing performance problems Encouragement of innovation and collaboration Starting adult life with less knowledge Manager Report Card Identification of key talent segments Career development processes Support for engagement Effective hiring and selection As younger programs employees, more likely to ASSOCIATES, LLC onboarding leave their Effective BERSIN companies programs 6114 LA SALLE AVENUE = Coaching and developing = C C Implementing fair and effective compensation plans = = Supporting health and wellness = D D C D C C Identifying and developing future leaders C Promoting engagement C Assessing and selecting applicants effectively = Onboarding effectively D C SUITE 417 Attracting top talent OAKLAND, CA 94611 Source: Bersin Associates, 2011. = means no difference between generational workforces found. (510) 654-8500 C means more organizations are proficient in this aspect of work when Millennial workforces are compared with Boomers. INFO@BERSIN.COM D means fewer organizations are proficient in this aspect of work when Millennials workforces are compared with Gen-X. WWW.BERSIN.COM Just the Facts about Millennials Brenda Kowske | Page 18 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 19. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES Conclusion A N A LY S I S This research bulletin has summarized the Millennial generation (at least what we know to-date, based on real research and empirical Companies will data), and has matched their unique characteristics to reports of HR need to develop and line-manager proficiency. We see some differences in the youngest the skills of Millennials to close the gap of generations’ characteristics and, therefore, it would behoove HR to improve their skills and those of line managers, accordingly. As previously stated, the general scientific consensus is that true generational (as opposed to age-related) differences are rare and small; left by secondary consequently, organizations should weigh investment in justifying education, practices, processes and skills with generational characteristics. However, especially through and especially for those organizations facing a major demographic self-learning change as their mature workforces retire, this research suggests resources and developing the organization in the following areas: opportunities. • Becoming adept at recruiting, hiring and onboarding to compensate for younger employees’ higher turnover rates, particularly in the area of managerial onboarding skills; • Developing the Millennials’ skills to close the gap left by secondary education, especially through self-learning resources a nd opportunities; • Supporting innovation and collaboration, and finding the balance between fresh (sometimes irreverent) ideas and working with a team to make ideas reality; • Providing acknowledgment for achievements through pay-forperformance practices and other types of recognition to ensure that Millennials are motivated to perform; and, • Strengthening HR’s effectiveness in promoting employee engagement to counteract Millennial flight. BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM Just the Facts about Millennials Brenda Kowske | Page 19 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 20. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES As generations continue their march through time, the societal shifts they drive are mimicked in industry, forcing leaders and HR to adapt. However, as with any change, organizations that adapt more quickly can take advantage of the competitive edge which a new generation brings. The information explained in this report enables organizations to take empirical insights, and adjust their policies and actions accordingly. Implemented correctly, organizations should be able to adapt quickly to effectively support and manage Millennials – a leverage point for business success in the future. BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM Just the Facts about Millennials Brenda Kowske | Page 20 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011
  • 21. Research Bulletin | 2011 Research Bulletin | 2011 BERSIN ASSOCIATES BERSIN ASSOCIATES The Bersin Associates Membership Program This document is part of the Bersin Associates Research Library. Our research is provided exclusively to organizational members of the Bersin Associates Research Program. Member organizations have access to the largest library of learning and talent management related research available. In addition, members also receive a variety of products and services to enable talent-related transformation within their organizations, including: • • Benchmarking – These services cover a wide spectrum of HR and LD metrics, customized by industry and company size; • Tools – Comprehensive tools for HR and LD professionals, including tools for benchmarking, vendor and system selection, program design, program implementation, change management and measurement; • Analyst Support – Via telephone or email, our advisory services are supported by expert industry analysts who conduct our research; • Strategic Advisory Services – Expert support for custom-tailored projects; • BERSIN ASSOCIATES, LLC 6114 LA SALLE AVENUE SUITE 417 OAKLAND, CA 94611 (510) 654-8500 INFO@BERSIN.COM WWW.BERSIN.COM Research – Access to an extensive selection of research reports, such as methodologies, process models and frameworks, and comprehensive industry studies and case studies; Member Roundtables® – A place where you can connect with other peers and industry leaders to discuss and learn about the latest industry trends and best practices; and, • IMPACT® Conference: The Business Of Talent – Attendance at special sessions of our annual, best-practices IMPACT® conference. • Workshops – Bersin Associates analysts and advisors conduct onsite workshops on a wide range of topics to educate, inform and inspire HR and LD professionals and leaders. For more information about our membership program, please visit us at www.bersin.com/membership. Just the Facts about Millennials Brenda Kowske | Page 21 BERSIN ASSOCIATES © 2011 BERSIN ASSOCIATES © 2011