This document discusses how businesses must adapt to attract and retain "Net Generation" or "Millennial" workers who have very different expectations than previous generations due to their immersion in technology and social media from a young age. It outlines that meeting the expectations of Net Geners will require significant changes to technology use and company culture. Specifically, companies will need to implement social and collaborative digital tools, flexible and stimulating work environments, and interactive training programs that blend digital and traditional learning. HR has an opportunity to lead this workplace transformation and ensure companies can attract the talent needed for future growth.

1. The power of the
Net Generation
January 2012
Why businesses must attract
today’s youngest workers and
embrace social technology to
drive future performance.
At a glance
Net Gen culture will
redefine the workplace
of tomorrow: It will be
social, collaborative,
and fully digital.
Meeting the workplace
expectations of Net
Geners will require
a significant shift in
technology and culture
for many organizations.
HR has an opportunity
to lead workplace change
by building awareness of
this shift and developing a
strategy that leverages
new technologies.

3. Introduction
It’s an ambiguous time in business. Some CEOs are preparing for
growth while others are steadfastly guiding their organizations
through an unrelenting economic downturn. Economies may diverge,
but CEOs and HR leaders across industries share a common concern:
A swiftly evolving labor pool has made attracting, engaging, and
retaining top talent an unprecedented challenge.
The Net Generation
At one end of the spectrum, CEOs Already Generation X workers,
worry they will not be able to attract who comprise more than half of
the right talent to fuel growth and the workforce, are replacing Boomers
innovation. The fact is, even with the in leadership roles. And as Gen X
US unemployment hovering at scales the corporate ranks, a new
9% and 4.4% for those college breed of employee with very different
educated or higher1, finding a skilled expectations and attitudes is right
candidate often consumes months behind them.
of recruiting efforts. And the talent
squeeze is getting much tighter: Ready or not, today’s youngest
The ManpowerGroup says that workers, the Net Generation,
52% of US companies are having already comprise over a quarter
difficulty filling positions, a sharp of the US workforce, according to
increase over 14% in 2010.2 Lack of the Bureau of Labor Statistics. As
experience and inadequate skills are the fastest-growing employee group,
the most commonly cited obstacles they will play a greater role in the
to filling vacant jobs. organization and leave a lasting impact
on the way HR attracts, engages,
At the other end, companies are and retains talent.
bracing for a significant shift in the
workforce as Baby Boomers prepare While this new wave of workers
to retire and the next generation of has been given several labels—
employees take their place. In PwC’s Gen Y and Millennials among
14th Annual CEO Survey, 35% of them—we believe their affinity for
CEOs said they are troubled by the and connection to technology and
imminent retirement of Boomers.3 the Internet is every bit as pertinent
as their year of birth. Net Geners
grew up in an era in which the use
of laptops, smart phones, instant
messaging, and social media were
more reflexive than revolutionary.
1 Source: United States Bureau of Labor Statistics, http://www.bls.gov/news.release/empsit.t04.htm
2 Source: ManpowerGroup, 2011 Talent Shortage Survey Results, May 2011 (page 4)
3 Source: 14th Annual Global CEO Survey—PwC
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4. What is the Net Generation?
Although several monikers have been used for this generation—
Gen Y and Millennials among them—it is the Net Generations’ connection
to technology, and not their year of birth, that differentiates them from
other generations. This includes:
Thanks to the broadband Internet, • Having a lifelong affinity for technology and the Internet
they are accustomed to ubiquitous
• Being accustomed to ubiquitous digital connectivity, instant
digital connectivity, instant access
access to information, and mobility
to information, and the boundless
mobility made possible by Internet- • Being collaborative by nature and trust online social relationships
ready mobile devices. In fact, one-third • Desiring a fluid balance of work and life
of college students believe that the
Internet is as important as air, water, • Strongly believing in training and one-on-one mentoring
food and shelter for the human race,
and on a personal level, more than
half said they could not live without
the Internet as an ‘integral part of
their lives’.4
Given their technology-centric
worldview, it should come as
In other words, they expect the Beyond attracting and retaining the
no surprise that Net Geners have
technologies that inform and empower talent of tomorrow, organizations also
very specific expectations about
their personal lives will also drive must find ways to transfer corporate
how technology will be used in
communications and innovation in the knowledge to Net Geners, which will
the workplace. Above all else,
workplace. For businesses, this type of become increasingly important as
they anticipate that a digital-
digital-social ecosystem will require a Boomers retire in greater numbers.
social ecosystem will be the
transformation not only in technology, However, Net Generation workers’
platform upon which people
but also in organizational processes ways of learning and working are
and businesses—communicate,
and culture. vastly different from those of previous
collaborate, and innovate.
generations. As a result, managing
Retaining these workers will be a multi-generational workforce will
challenging, yet essential for business not only require different approaches,
continuity. Net Geners are restless, but an employee value proposition
with an average job tenure of 18 to engaging a multi-generational
months, according to the US Bureau workforce that appeals to the variety
52%
of Labor Statistics. That’s a serious of different generational values.
issue for HR because the sum costs
related to turnover can represent Net Gen culture will redefine the
from 12% to 40% of a company’s workplace of tomorrow: It will
of US companies are having pre-tax income.5 An effective strategy be social, collaborative, open and
difficulty filling positions, a combined with the technologies to fully digital. Forward-thinking HR
sharp increase over 14% in 2010. engage and retain these workers will organizations are championing
be critical to a business’ bottom line. and implementing strategies that
incorporate these characteristics into
every aspect of the talent life cycle.
One thing is certain: Technology will
play a pivotal role in attracting and
retaining the talent necessary to drive
business innovation and growth.
4 Source: Cisco Connected World Technology Report.
http://www.cisco.com/en/US/netsol/ns1120/index.html
5 Source: PwC Saratoga 2011/2012 US Human Capital Effectiveness Report, “Executive Summary”, 2011
2 The power of the Net Generation

5. How to prepare for
Net Gen workers
Meeting the workplace expectations • Workplace environment: A
of Net Geners will not be business as flexible, collaborative, and
usual. It will require a significant shift entertaining work environment
in technology and culture for many that leverages technology to
organizations. Following are four engage and interact in new ways,
major components of a strategy to with 24/7 access to company
get your organization Net Gen-ready: information and communications.
• Recruiting and employee • Training and development:
engagement: Social, collaborative, Interactive learning programs
and pervasive processes, systems that are customizable and blend
and tools to find and engage traditional classroom methods,
employees (even before they join relationship-based mentoring,
the organization!). and digital formats.
• Better tech skills: Raising the
digital IQ of the existing workforce
to better understand the social
media and collaboration landscape,
including sites such as Facebook,
While on-campus recruiting drives will Twitter, and LinkedIn.
remain an effective and necessary program,
today’s college seniors use social media such as
Facebook, LinkedIn, and Twitter to learn about
companies and employment opportunities.
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6. Recruiting with social media works, in part,
because it draws upon Net Geners’ trust in Social tools used by HR to attract
peer groups. They are innately social, and recruits are not limited to LinkedIn,
the use of social media and internal referral Facebook and Twitter, however. Today
HR organizations are implementing
networks that enable new hires to pass along more robust social recruiting solutions
career opportunities to peers, friends, and from vendors such as SuccessFactors,
students will appeal to their natural affinity Kenexa and Taleo, and leveraging a
variety of other social tools to better
for digital collaboration. engage potential candidates.
Listening to, and engaging potential
candidates is critical, as once Net
Geners have identified a prospective
Recruiting and Consider, for instance, these uses
of social media. Some recruiters employer, most will click straight to the
employee engagement source to submit their application at
broadcast video testimonials from
To attract the workers of tomorrow, the company’s website. The Net Gener
current interns that provide an
recruiting practices should take will expect an interactive application
insider look at a “day in the life” at
full advantage of social networking portal that provides instant access to
the company. Others have created
tools. While on-campus recruiting application guidelines, an interactive
a LinkedIn application that allows
drives will remain an effective timeline that describes the recruiting
students to track the career paths
and necessary program, today’s process, and a storehouse of necessary
of new trainees to understand
college seniors use social media documents. Their social Internet is
how a career develops within the
such as Facebook, LinkedIn, and defined by a free give and take of
organization. These approaches
Twitter to learn about companies information, and Net Geners anticipate
enable recruits to interact with peers
and employment opportunities. that a company’s application portal
and HR, creating the type of genuine
Reciprocally, as candidates become and hiring process will be similarly
digital relationships that are natural
more attuned to engaging with interactive, enabling the company
to Net Geners.
companies online, there is an and the candidate to learn what
increasing expectation from employers Similarly, HR departments are each has to offer.
that candidates are well versed on employing internal social networks
the business and opportunities for to create a relationship and dialog
which they are applying. with employees. Some, for instance,
ask staff for referrals and feedback
These are important considerations,
on existing job candidates based on
because despite social media having
similarities in experience or education.
proven to be an efficient platform for
creating awareness about a company Recruiting with social media works,
and its career opportunities, its impact in part, because it draws upon Net
is far deeper than merely delivering Geners’ trust in peer groups. They
information. Social networking are innately social, and the use of
changes the relationship with potential social media and internal referral
recruits from a one-time hiring event networks that enable new hires to
to a connection that is ongoing, pass along career opportunities
engaging, and often peer-based. to peers, friends, and students will
appeal to their natural affinity for
digital collaboration.
4 The power of the Net Generation

7. Learning the power of play with game-based training
Training need not be a chore. Increasingly, HR organizations are
finding that game-based training provides an interactive, engaging, and
competitive way for employees to learn skills and workplace processes.
It’s also quite effective. A University of Denver Business School study
found that employees trained with video games have 11% higher This type of employee-focused
factual knowledge level, a 14% higher skill-based knowledge level, and environment may seem like an
a 9% higher retention rate compared with workers who learn in less indulgence, but it is actually good
interactive environments.1 for retention—and good for business
One company that has discovered the power of play is Genentech. because engaged employees are more
The biotechnology firm created a game called the New Manager productive. A study conducted by
Roadmap Challenge to train new managers on company policies, the Corporate Executive Board found
standards, and management resources. The game, which resembles that employees most committed
a classic simulated road race, helps new managers prioritize and keep to their organizations put forth
track of resources available to them. It appeals to the competitive nature 57% more effort and are 87% less
of young workers by enabling players to view scores of their cohorts. likely to resign than employees who
The game has helped Genentech ensure that content is immediately consider themselves disengaged.7
accessible and consolidated for new managers, and has lowered costs The opportunity to spark engagement
and time associated with training. and productivity provides a strong
case to demonstrate the importance
of a more relaxed, less traditional work
1 Source: University of Colorado, Denver, Business School, “Business School professor’s study
finds video games highly effective training tool”, October 20, 2010 environment and to facilitate funding
Chief Learning Officer, “Excellence in Simulations and Games Winners”, 2010 that is built into the long-term
business plan.
Training and development
Workplace environment cohorts and managers in ways that Net Geners were nurtured by parents
are natural to them. Over the long who were enthusiastically involved in
To optimize the potential of these their education, and as a result they
term, a social business network will
tech-centric workers, social expect similarly dynamic on-the-job
also help improve the technology skills
networking and collaboration tools training and career development.
of current workers and lead to better
that work the way they do will be These young workers want learning
collaboration, communication, and
essential. This shift in technology will that is customizable, engaging, and,
productivity across the enterprise.
be rapid. By 2014, Gartner forecasts of course, digital. They expect to
that social networking will replace A Net Gen-friendly environment is keep on learning as they enter the
e-mail as the primary communications fully digital, but it is also comfortable workplace and spend a high proportion
hub for 20% of business workers.6 and creative. Net Generation workers of their time gaining new experiences
do expect to work hard, but they don’t and absorbing new information. In
Net Geners will expect a workplace
want to sit in a beige cubicle all day. a recent PwC study, 35% said they
technology ecosystem that includes
They will be drawn to organizations were attracted to employers who
social networking, instant messaging,
that offer an engaging, comfortable, offer excellent training and
video on demand, blogs, and wikis.
and stimulating atmosphere that development programs for this
These social tools will enable Net
creatively blends life and work. reason and saw it as the top benefit
Geners to instantly connect, engage,
they wanted from an employer.8
collaborate, and innovate with
6 Source: Gartner Research, Gartner Says Social-Networking Services to Replace E-Mail as the Primary
Vehicle for Interpersonal Communications for 20 Percent of Business Users by 2014, November 2011
7 Source: Corporate Executive Board, “The Role of Employee Engagement in the Return to Growth”,
Bloomberg Businessweek, August 2010
8 Source: PwC, Millennials at Work: Shaping the Workplace, December, 2011
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8. In general, Net Geners gravitate But that doesn’t mean traditional This cross-generational coaching
toward learning styles that are learning methods like classroom presents a double opportunity for
autonomous and customizable. instruction are ineffective. Quite HR: It can satisfy younger workers’
Despite a preference for independence the contrary: Net Geners respect expectations and, at the same time,
and personalized learning, they want authority and experience, and will help preserve the organizational
structured rules and procedures that respond enthusiastically to dynamic knowledge of seasoned workers
clearly define what they must do to and engaging dialog. The best who may be nearing retirement.
achieve career objectives. training programs will mix classroom Inevitably, the organization’s
instruction with digital learning hierarchical barriers will erode
They are accustomed to a world of modules, interactive video, and as diverse generations interact.
information and entertainment at webinars. A flexible menu of training
their fingertips, delivered instantly approaches enables young employees For all their expertise in technology
by an array of technology devices. to customize their work and career and collaboration, many HR leaders
Accordingly, they respond well to a development programs. Digital have found that Net Geners often
stimulating range of learning styles learning requires that training content require training in fundamental
and modes, such as PowerPoint and sessions be freely available on workplace behavior and culture.
presentations, online-learning the corporate network, enabling These young workers, for instance,
modules, webinars, video games, workers to complete training on a broadcast the minutiae of their
and one-on-one mentoring with flexible schedule and investigate personal lives on Facebook and
a senior manager. career development as time and Twitter but may need to be told that
motivation dictates. it is inappropriate to share salary
More than previous generations, Net information or performance review
Geners prefer to learn by doing rather Beyond training, traditional and results with co-workers. Similarly,
than by being told what to do. They are otherwise, Net Geners know that they are accustomed to instant
innately collaborative and accustomed the knowledge of experienced senior responses when they chat with friends
to learning in teams. Similarly, they workers will be invaluable to their via instant messaging yet may not
will want to engage and interact with careers. Unlike previous generations, realize that older workers often do not
instructors; in other words, a one-sided they will not hesitate to ask for treat IMs with the same immediacy.
lecture will not hold their attention. on-the-job mentoring.
The best training programs will mix classroom instruction with digital
learning modules, interactive video, and webinars. A flexible menu of
training approaches enables young employees to customize their work
and career development programs.
6 The power of the Net Generation

9. All things considered, the lack of technical
Improving tech skills
skills among older workers represents more
While much has been said about the
opportunity than challenge. Encouraging
imminent retirement of Baby Boomers, younger workers to share technology skills
there is considerable uncertainty as to with more seasoned cohorts can flatten the
how swift and complete that exodus
will be. The enduring recession has
hierarchical barriers of a multi-generational
slowed retirement as Boomers have workforce, promote enterprise-wide
been forced to raid their 401(k) collaboration, and help preserve
accounts and savings, while others are
staying on the job longer to qualify corporate wisdom of retiring workers.
for a larger Social Security benefit or
retain current health care coverage.
These uncertainties require that HR
prepare for the secession of seasoned
employees while simultaneously One of the most effective ways to A technology mentoring plan will
ensuring that they continue to develop sharpen the technology IQ of older be most effective when seasoned
skills. In particular, older workers workers is an approach known as workers understand that tools such
often lack competency in the use of reverse mentoring, which pairs young, as social networking and micro-
collaborative and social networking tech-savvy employees with seasoned blogging can help them more
technologies. It’s not that they are workers. Reverse mentoring enables efficiently and flexibly collaborate
reluctant to augment their technology mature employees to learn digital- and communicate at work—and at
skills; they simply need a supportive social technology in a structured, home. An informal seminar on how
environment in which to learn. non-threatening environment. They to use digital cameras and upload
can, for instance, ask specific questions snapshots to photo-sharing sites, for
about how Facebook status updates instance, will teach mature workers
work in one-on-one sessions with valuable skills about social networking
35%
younger employees. The bonus for sites that can be used at work and
HR: Reverse mentoring will flatten also enrich their personal lives.
organizational barriers and preserve
corporate knowledge as Net Geners All things considered, the lack of
of Net Geners said they interact with established workers. technical skills among older workers
were attracted to employers represents more opportunity than
who offer excellent training challenge. Encouraging younger
and development programs and workers to share technology skills
saw it as the top benefit they with more seasoned cohorts can
flatten the hierarchical barriers of a
wanted from an employer.
multi-generational workforce, promote
enterprise-wide collaboration, and
help preserve corporate wisdom
of retiring workers.
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10. Leading the
charge for change
Attracting and retaining the next The cultural and technical changes
generation of workers is critical to the inherent in preparing the workplace
future of your business. Net Generation for the workers of tomorrow creates a
workers’ career aspirations, attitudes complex challenge that begins in HR
about work, and knowledge of new and ultimately spans the enterprise. Its
technologies will define the culture scope will require a careful assessment
of the 21st century workplace. of existing policies and technologies,
a strategy for enterprise-wide change,
HR has an opportunity to lead and the expertise to avoid implosion
workplace change by building upon implementation.
awareness of this shift and developing
The cultural and a strategy that leverages new This magnitude of change will not be
technical changes technologies to engage new— easy, nor will it be achieved overnight.
inherent in preparing and existing—workers in ways
But it must begin now. Already,
that drive growth and innovation.
the workplace for the Digital-social technology is key because Net Geners represent one-quarter
workers of tomorrow it will provide a platform for effective of the US workforce, and their
communications, collaboration, and numbers are expanding.
creates a complex innovation for all workers. It will
challenge that begins also enable the organization to better The right strategy, planning, and
execution will enable your company
in HR and ultimately understand and meet the needs of
to not only meet the needs of these
customers, many of whom already use
spans the enterprise. social technology in their daily lives. digitally-connected workers, but also
unlock the innovation and productivity
of existing employees and confidently
enter the next generation of business.
8 The power of the Net Generation

12. www.pwc.com/us/peopleandchange
To have a deeper conversation about the Net Generation
and what your organization do to attract and retain this
next generation of works, please contact:
Ed Boswell Sayed Sadjady
(617) 530-7504 (646) 471-0774
edwin.h.boswell@us.pwc.com sayed.r.sadjady@us.pwc.com
Diane Youden Jean Lee
(214) 754-5150 (408) 206-7006
diane.youden@us.pwc.com jean.e.lee@us.pwc.com
Scott Olsen Justin Angsuwat
(646) 471-0651 (917) 225-3511
scott.n.olsen@us.pwc.com justin.angsuwat@us.pwc.com
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© 2011 PwC. All rights reserved. “PwC” and “PwC US” refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm of
PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. This document is for general information purposes only, and
should not be used as a substitute for consultation with professional advisors. PH-12-0103