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Retaining Millennials: A High-Stakes Business Consideration
Deanna Hartley, 05-18-2009
There’s a good chance Millennials are eating away at a company’s profits — not because of their inability to significantly contribute to the bottom line, but because of their tendency to switch jobs and pile up turnover costs more than any other generation in today’s workplace.
“Lots of young talent leave every 18 months [on average] from their first two or three jobs,” said Dr. Joanne G. Sujansky, founder and CEO of KeyGroup, a keynote, assessment, executive coaching and training company that works with leaders to create workplaces that attract, retain and get the most from their talent. “They want to [determine] what kind of job and workplace works best. They’re not going to wait: They’re going to try to find the right fit.”
Meanwhile, organizations are forced to bear the brunt of the accumulating costs associated with turnover, which can range from one to two times the employee’s salary.
“Assuming you bring in a Millennial for $50,000, it’s going to cost you between $50,000 and $100,000 to replace that Millennial,” Sujansky said. “Using the more conservative number, it could cost $50,000 to replace a $50,000-a-year Millennial employee. Therefore, losing as many as 10 Millennials within a year could cost an organization as much as half a million dollars.”
Some of these costs could include lost productivity, errors made by the person filling in, costs associated with a temporary worker, payroll processing costs, the cost of training new employees and conducting background checks.
Further, any discrepancy between the way a job or company culture is described to a Millennial in an interview and the actual culture as experienced can lead to a lack of engagement, Sujansky said.
“If we sell them any kind of good in a pre-employment ad or try to recruit by telling them, ‘This is a really cool company with lots of flexible benefits, and we operate in a contemporary mode’ and then the person gets there and [it’s not], that’s a problem,” she said. “If it’s a more traditional culture, you’d do best to be honest about it.”
For instance, in many cases, Millennials enter the workforce expecting flexible hours and a proper work-life balance. If their demands are not in line with company policies, it could result in workplace conflicts, as well as lost productivity, Sujansky explained.
For this reason, taking steps to retain Millennials must be a strategic imperative.
“This is a real business issue — it’s not just a nice-to-do. It’s a have-to-do because money’s just going out the door when they leave,” she said.
In the book she co-authored with Jan Ferri-Reed — Keeping the Millennials: Why Companies Are Losing Billions in Turnover to this Generation – and What to Do About It — Sujansky outlines a few steps companies can take to attract, recruit and retain Millennials.
An extended period of coaching new hires during the on-boarding process must be a priority, she said. And employers should make mentorship opportunities available, provide frequent and positive feedback, and make Millennials feel valued.
“Ask Millennials what they think of certain high-priority projects and get their input,” she said. “When you engage the Millennial group, they get more interested.”
Moreover, Sujansky explained that even in lean economic times, companies can take inexpensive measures to ensure Millennials progress within the company.
“Plan leadership development for Millennials, whether it’s a pre-supervisory program, early leadership program, etc.,” she said.
Leveraging Minority Suppliers Makes Business Sense
Despite the fact that they continue to post profits amidst an unstable economy, a number of companies — including major corporations — have cut back on diversity initiatives, such as minority supplier programs, citing the economic downturn as a major factor.
According to the results of an informal survey conducted by The National Minority Business Council Inc. (NMBC) earlier this month, a popular excuse companies offer is supplier diversity programs are not financially viable options, especially in the wake of the looming recession.
However, employers may need to continue to invest in and expand their supplier diversity programs.
“Research shows substantial bottom-line benefits as a result of using diverse suppliers, including improved customer satisfaction and market share for the procuring corporations and improved local economies in communities where diverse suppliers are based,” John F. Robinson, president and CEO of the NMBC, said in a NMBC news release.
Organizations must view supplier diversity programs as integral to furthering their business.
“Corporations must adjust to prevailing economic times — just as they would not eliminate their marketing programs for the goods and services they provide, they should [also] not eliminate supplier diversity programs,” Robinson said.
“At a time when census figures show the country moving toward an overall population dominated by ethnic minorities with hefty purchasing power, these programs make good business sense.”
