Millennials and their employers: Can this relationship be saved?
Businesses at risk of losing top talent, according to Deloitte’s global annual survey
Singapore, 19 January 2016 – Businesses must adjust how they nurture loyalty among Millennials or risk losing a large percentage of their workforces, according to Deloitte Touche Tohmatsu Limited’s (Deloitte) fifth annual Millennial Survey. Forty-four percent of Millennials say, if given the choice, they expect to leave their current employers in the next two years. That figure increases to 66 percent when the time frame is extended to 2020. The findings were revealed through a survey of nearly 7,700 Millennials from 29 countries during September and October 2015.
Concerns regarding a lack of development of leadership skills and feelings of being overlooked were often voiced by those considering near-term career changes. But, larger issues around work/life balance, the desire for flexibility, and differences around business values are influencing their opinions and behaviors. Millennials appear to be guided by strong values at all stages of their careers; it’s apparent in the employers they choose, the assignments they’re willing to accept, and the decisions they make as they take on more senior-level roles. While they continue to express a positive view of business’ role in society and have softened their negative perceptions of business’ motivation and ethics compared to prior surveys, Millennials still want businesses to focus more on people (employees, customers, and society), products, and purpose—and less on profits.
“Millennials place great importance on their organization’s purpose beyond financial success, remaining true to their values and opportunities for professional development. Leaders need to demonstrate they appreciate these priorities, or their organizations will continue to be at risk of losing a large percentage of their workforce,” said Punit Renjen, Deloitte Global CEO. “Fortunately, Millennials have provided business with a roadmap of how employers can meet their needs for career satisfaction and professional development.”
Earning Millennials’ loyalty
Millennials seek employers with similar values; seven in 10 believe their personal values are shared by the organizations for which they work. This is the potential “silver lining” for organizations aiming to retain these young professionals.
Closing the “purpose gap” also will be critical to attracting and keeping Millennials. They want to work for organizations that focus on improving the skills, income, and ‘satisfaction levels’ of employees; create jobs; and provide goods and services that have a positive impact on peoples’ lives. Millennials recognize the need for businesses to be profitable and to grow, but feel organizations are often too focused on those objectives. To Millennials, organizations with a strong sense of purpose will achieve long-term success while organizations that do not are at risk.
According to the survey, employers that provide opportunities for leadership development; connect Millennials to mentors; encourage a work/life balance; provide flexibility that allows Millennials to work where they’re most productive; give them more control over their careers; and foster cultures that encourage and reward open communications, ethical behavior, and inclusiveness, are those that will be most successful in retaining Millennial employees.
Values are traditional, less compromising
Contrary to perception, the survey found that Millennials aren’t particularly influenced by the “buzz” around particular businesses or employers. Survey respondents also indicate little desire to be famous, have a high profile on social media, or accumulate great wealth. Instead, in broad terms, Millennials’ personal goals are rather traditional. They want to own their own homes, they desire a partner for life, and they seek financial security that allows them to save enough money for a comfortable retirement. The ambition to make positive contributions to their organizations’ success and/or to the world in general also rate highly.
When asked to state the level of influence different factors have on their decision-making at work, “my personal values /morals” ranked first. Most Millennials have no problem standing their ground when asked to do something that conflicts with their personal values. This includes more-senior Millennials, whose emphasis on personal values continues into the boardroom—suggesting future leaders will base their decisions as much on personal values as on the achievement of specific organizational targets or goals.
“A generation ago, many professionals sought long-term relationships with employers, and most would never dream of saying ‘no’ to supervisors who asked them to take on projects,” said Renjen. “But, Millennials are more independent and more likely to put their personal values ahead of organizational goals. They are re-defining professional success, they’re proactively managing their careers, and it appears that their values do not change as they progress professionally, which could have a dramatic impact on how business is done in the future.”
Millennials in Southeast Asia
More than 70% of SEA1 Millennials, higher than 60% globally, feel that their “leadership skills are not being fully developed”. They believe that businesses are not doing enough to bridge the gap to ensure creation of a new generation of business leaders. This has direct impact on:
a. Short-term attrition: 7 in 10 respondents who are unhappy with how their leadership skills are being developed are likely to leave in the next two years
b. Employee loyalty: Respondents who will stay more than 5 years indicate that their organisations provide a lot of support/training to those wishing to take on leadership roles
Globally, pay and financial benefits drive Millennials’ choice of organisation more than anything else. It is the single most important factor in all 29 markets covered, with work-life balance coming in second. However, SEA research2 shows that Millennials have grown up in a time of rapid technological change, globalization and economic disruption, giving them a set of priorities, behaviours, experiences and expectations that are significantly different from previous generations. When translated into an organisational context, this generation of young employees are less motivated by financial rewards and put more emphasis on work-life balance.
Compared to last year, Millennials globally are slightly more likely to agree that their leaders are committed to contributing to society. This is slowly moving in the right direction within the SEA region although the majority of SEA Millennials still believe businesses are more focused on their own agenda, rather than helping to improve society.
“SEA’s millennial workforce values their organisations’ commitment and focus on employee development and an understanding of their needs for work-life balance. said Nicky Wakefield, Human Capital Leader, Deloitte Southeast Asia.
“A good understanding of the characteristics of Millennials by SEA leaders is essential as this growing workforce segment continues to grow and starts to become the future leaders of SEA and global businesses. The businesses best able to understand and most effectively engage this group of emerging leaders will be the victors” added Ms Wakefield.
“Millennials generally need to feel valued or they're likely to lose interest in their work, even if they are paid well. Local managers also say that it helps to give encouraging comments to keep them motivated, but agree that Singaporeans, and Asians in general, are less likely to pay compliments to employees even when duly deserved. Local leaders should be encouraged and reminded to give due verbal recognition for a job well done,” said Jason Seng, Singapore Leader of Deloitte’s Southeast Asia Human Capital practice.
“Local managers should also be more open to and accepting of flexible working hours, work patterns, and virtual working; as well as respect the individual’s perspectives on work-life balance instead of expecting them to respond ‘on-demand,” Seng added.
1 Represented by Malaysia, Thailand and Singapore (MTS) in the 2016 Deloitte Millennial Survey.
2 “Millennials in the Singapore Workforce: Understand to manage’, author Jason Seng, published in Singapore Chinese Chamber of Commerce & Industry’s Chinese Enterprise, Issue 6/2015, pages 24 to 27
Additional findings from the survey include:
- High correlation between satisfaction and purpose. Forty percent of Millennials reporting high job satisfaction, and 40 percent who plan to remain in their jobs with their current employer beyond 2020, say their employers have a strong sense of purpose beyond financial success. The figures among those reporting low satisfaction, and those who plan to leave within two years, was just 22 percent and 26 percent, respectively.
- More than economic factors driving Millennials to leave. The desire to leave their current job during the next five years is greater among Millennials in emerging markets (69 percent) than in developed economies (61 percent). However, outliers—including the UK, where the rate is 71 percent—suggest the desire to move on is not merely a function of the economic climate.
- Business as a force for good. Millennials continue to hold business in high regard; three-quarters (73 percent) maintain that it has a positive impact on wider society. This figure is unchanged since 2014 and shows that, despite a downturn in certain local and regional economies, Millennials remain upbeat about business’s potential to do good.
- Unhappy with leadership development. Almost two-thirds (63 percent) of Millennials feel their leadership skills are not being fully developed, and 71 percent of those expecting to leave their employer in the next two years are unhappy with how their leadership skills are being developed—a full 17 points higher than among those intending to stay beyond 2020.
- Focused on productivity, personal growth. Millennials want to spend more time discussing new ways of working, developing their skills, and being mentored.
- Seeking flexibility. Three-quarters of Millennials would prefer to work from home or other locations where they feel they could be most productive. However, only 43 percent currently are allowed to do this.
- Feeling in control. Three-quarters (77 percent) of Millennials feel in control of their career paths.
Deloitte Global leaders will be discussing the Deloitte Millennial Survey and the impact of Millennials on business and employers at the World Economic Forum’s annual conference in Davos, Switzerland, from 20 to 23 January 2016.
About the Deloitte Millennial Survey
The research findings are based on a study conducted by Deloitte Global of nearly 7,700 Millennials representing 29 countries around the globe. Screening questions at the recruitment stage ensured that all respondents were Millennials—were born after 1982, have obtained a college or university degree, are employed fulltime, and predominantly work in large (100+ employees), private-sector organizations.