Forget Work Perks. Millennial Employees Value Engagement.

by MacKenzie Kassab

The future is here: millennials have taken over the workforce. They are tech savvy, adaptable, and creative. But they also have a unique set of expectations and demands. And so far, few corporations are living up to them.

According to Gallup, a staggering 87 percent of employees worldwide are disengaged at work. Productivity and, ultimately, profitability are often victims to this lagging motivation.

Organizations can ignore the inevitable and keep doing what they’re doing. Or they can reevaluate the traditional workplace and make adjustments to attract and retain young talent.

Forget ping-pong tables, catered lunches, and nap pods. The most forward-thinking businesses are turning their focus to employee engagement.

Trademarks of a Modern Workplace

Fixing Problems, Not Symptoms

When Peter J. Martel, senior talent development consultant at Harvard Business School, was consulting on human capital for a private firm in New York, he was often called in to put a Bandaid on problems, even if organizations didn’t realize it.

Clients lamented issues like high turnover, typically specifying salary as the culprit. “But if they let us dig a little deeper, we almost always found that compensation wasn’t the issue. It was the red herring,” he says.

The root of the problem was commonly low employee engagement and a resulting dissatisfaction with management and the workplace. “We’d have to tell them, ‘The real issue is that your people hate their jobs and they hate coming to work every day,’” Martel says.

In businesses with highly engaged teams, profitability increased by 21 percent, sales productivity by 20 percent, and output quality by 40 percent.

Companies expect quick fixes for things like low morale and low productivity—other common grievances. But Martel says that simply doling out raises isn’t the answer.

“Employees want to feel valued, and the best way to express that value is through investment in the individual,” he says.

Competitive compensation helps, but organizations need to consider a holistic approach. Investing in training and providing the resources for personal development go a long way in terms of employee engagement.

“An engaged workforce is optimal from an organizational performance point of view,” Martel says.

A recent Gallup report confirms that claim. In businesses with highly engaged teams, profitability increased by 21 percent, sales productivity by 20 percent, and output quality by 40 percent. And with absenteeism down by 41 percent, it would seem that those employees actually liked going to work.

“If employers really want to be high-performance organizations, their compensation and work systems need to be in sync with a commitment to having an engaged workforce. They need to have all the moving parts working together,” Martel says.

Cultivating Junior Leaders

Contrary to popular wisdom, not all leaders are born. Many are made. “Managers often grow in their careers because they’re technically good at what they do,” McNeely says. “And then they reach a point where they’re suddenly managing a team of 12 people, and they realize they know nothing about supervision.”

Organizations might provide leadership coaching if red flags are raised. But a retroactive approach isn’t always effective. By then, says Martel, the damage may be done.

“All of the research I’ve seen over the years about employee engagement really points, first and foremost, to the relationship with one’s immediate supervisor,” he says, also noting that people unhappy with their manager most often “vote with their feet” and resign.

Establishing a healthy dynamic is sometimes easier said than done. Communication skills don’t always come naturally, and, as McNeely points out, “managers aren’t always taught what conversations need to be had in order to make employees feel like a company cares about them.”

Thus, organizations should help high performers develop leadership skills early on. According to Martel, the benefit of establishing ongoing leadership training is two-fold: employees will transition into senior positions with more ease, and they’ll be equipped to provide peer-to-peer coaching on their way up.

Welcoming Employee Mobility

Millennials aren’t interested in just working their wayup the ladder. Today’s employees are making lateral career moves in pursuit of happiness. A recent study by Cornerstone OnDemand found that the biggest motivator for changing positions is the promise of purpose and fulfillment: not financial incentive.

This generation is calling us to respond to a faster way of thinking about their careers, and companies that recognize and respond to that are places people want to be,” says McNeely.

In fact, a 2015 study by the Education Advisory Board suggests that millennials will job hop up to 20 times in their career, about twice as many as their baby boomer counterparts.

Consider that, according to the Cornerstone study, 66 percent of employees will seek internal opportunities before looking for a position somewhere else. Supporting professional development is one way companies can attract and retain valued employees.

McNeely agrees. “This generation is calling us to respond to a faster way of thinking about their careers, and companies that recognize and respond to that are places people want to be,” she says. “If you poo-poo millennials for being so impatient that they’re always moving to another job, you’ll lose part of your workforce.”

Thus far, it seems few organizations have been quick to respond to this shift. The Cornerstone OnDemand study revealed that 84 percent of employees don’t feel that their employers provide career-planning resources. And 70 percent said their employers don’t guide professional growth within their organization.

Turning those numbers around may require investment. Continuing education courses, for example, can help employees fill knowledge gaps as they transition to new roles.

Giving employees the support to explore various paths isn’t a compromise. In addition to reinforcing engagement, it can foster an understanding of how a business works across functions and departments. That knowledge is a solid foundation for future leaders.

Here’s some food for thought: Jim Ziemer started as a freight elevator operator at Harley-Davidson before working his way up to CEO nearly 40 years later. And Ursula Burns, Xerox’s CEO and chairman, was brought into the company as an intern.

Overcoming the Fear of Saying Goodbye to Good Employees

It may sound counterintuitive, but successful organizations are willing to let good employees move on. They may even encourage it.

Martel defines succession planning as the intersection between readiness and opportunity. A true mentor will create the readiness factor through development strategies and performance reviews.

But few managers have control over when a golden opportunity will arise—particularly if that opportunity is with another organization.

“When an employee hits an internal ceiling,” Martel says, “the mature, self-actualized managers out there understand that the best thing they can do for a person is help her find a new role, even if it’s going to cost them on a personal level.”

The irony is that supporting an employee’s decision to leave often inspires loyalty. “An employee thinks, ‘My boss must really love me if she’s telling me that I should be thinking about moving on because she knows they can’t provide the next step I’m ready for,’” Martel says.

McNeely agrees. “It may sound trite, but if you’re on the right side of history, your company will develop a reputation that will attract more people to it,” she says. “Sure, people may leave. But they may also come back.”

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