If you keep up with the news—and frankly, even if you don’t—you’ve heard plenty about “the great resignation.” New research by Microsoft predicts that more than 40 percent of the global workforce are considering leaving their employers this year. This is an alarming statistic. I’ve spoken with many leaders and we are all grappling with the same issue: how to help our organizations navigate through this mass turnover.
Several months ago, when the term “great resignation” was coined, it was hard for leaders to imagine that such significant turnover was on the horizon. Now that we’re in the thick of it, the priority needs to be making meaningful changes within our organizations that will make employees want to stick around. This is especially true if we plan to attract and retain young talent. You know how we build strategies to earn, strengthen and maintain customer loyalty? We need to apply that same thinking and take the same aggressive actions with our employees.
I was not surprised to learn that millennial and Gen Z workers were driving the great resignation. Beyond my experience working with the younger generations, I’m also a mum of two grown children. I’ve watched them both advance along their respective career journeys, giving me new perspective along the way. Because of them and my role as CEO, I’ve become deeply attuned to the wants and needs of millennial workers.
The reality is that there is no quick fix when it comes to attracting and retaining young talent. They are not simply chasing promotions or better compensation. Rather, the younger generations are driving a seismic shift in the way work is done. Of increasing importance are work-life balance, flexibility with time and availability of remote work. But that is only part of the equation. They are also seeking to redefine company culture as they derive more purpose from the work they do and the organizations where they work.
For those of us who have been in the business world for some time now, it can be hard to let go of established practices and ways of working. However, keeping an open mind and being receptive to change in key areas can lead to more purposeful and productive work and happier employees. Here are three meaningful changes your organization can make to retain young talent.
1. Purpose is paramount
Purpose has been growing as an important factor in business for a long time, but until recently it has taken a back seat to profit and growth. As organizations evolve for the 21st century, purpose has become a core component of many businesses. A driving factor is millennial and Gen Z workers being unafraid to ask how the work they are doing will make the world better. If the answer is not satisfactory, they are more than willing to pursue other opportunities. That strong need for purpose is not just limited to younger employees. Workers of every generation want to work for employers whose values align with their own, and to know that their work is meaningful. We have seen millions of workers retire sooner than expected during the pandemic. For many, their employers’ values played a role in that decision.
It’s true that not every business was founded on a strong purpose, but it’s never too late to start making an impact outside your own walls. A great example of an organization finding new purpose is Siemens. Back in 2014 Siemens started a business transformation called “Vision 2020.” The goal was to elevate their existing mission of maximizing shareholder value to a purpose driven by social good.
Since 2014, Siemens has reimagined their company culture, pivoted core parts of its business to be sustainability focused, and established the DEGREE framework for ESG initiatives. The culture shift is a critical part of their continued success. Over time, they have decentralized some of the decision making and created an “ownership culture” through a robust share matching program. Their employees are also co-owners, and 80 percent of all worldwide Siemens employees are able to participate. This gives employees a stake in the company’s success, greater involvement in decision making and a sense that their impact is greater than just their role.
Not every organization needs to take the same path as Siemens. An organization’s purpose should always fit its industry and business model. At the end of the day employees want to know the “why” of the work they are doing to stay fully engaged. For workers of every generation, and especially for young workers, deliberate and meaningful purpose can stop them from wanting to find the answer elsewhere.
2. Improve work flexibility
The pandemic caused a significant shift in the way we work. The move from in-office to remote work happened literally overnight and left heads spinning until we learned to adapt. Even now, with many companies calling employees back into the office, it seems that wide-scale remote work is here to stay.
Employees in every generational cohort have realized the benefits of remote work. While many employees are eager to get back into the office, others have little interest in returning to the office full-time, preferring a hybrid or remote model instead. But the “where” is only part of the equation. Leadership and management need to also consider the “when” and “how” as they define what work and productivity look like within their organization. To adapt, managers may need to evaluate their leadership style and make changes to the way they lead their teams. There is no one-size-fits-all solution, and what works best will vary by organization.
For millennial and Gen Z workers, flexibility often outranks compensation on their list of priorities. According to a pre-pandemic Harvard Business Review survey, 96% of professionals said they desire more flexibility in their work. That sentiment has likely only become stronger.
Work-life balance has become something of a cliché term in the business world, but it’s still a vital and valid consideration for employees. At the heart of work-life balance is flexibility within the workday. It can look like a flexible start and finish time or a remote working option that allows employees to work from home for part of the week. It can even be a shorter work week. A trial of a four-day work week in Iceland was tremendously successful, with productivity remaining the same or even improving. What’s more, employees reported reduced stress and burnout, and they had more time to take care of the things that matter to them outside of work.
To determine the best option for your organization, the first step is to listen to the needs of your employees. From there, you can use that feedback to define new policies that balance the needs of the business with the needs of employees. Introducing flexibility may feel like introducing chaos, but when properly done, the rewards can be significant. Employers who offer flexible schedules, work arrangements and work assignments will create an environment where employees will thrive and do their best work.
3. Evaluate your company culture
Great company culture has long been a competitive advantage when it comes to attracting and retaining talent. Culture has only become more important since the pandemic hit. Employees got to see how well their organization’s stated values aligned with its actions, and some companies were not up to par.
Millennial and Gen Z workers have different priorities when it comes to company culture. Compared to previous generations, they are more values-driven. In fact, 86 percent of millennials would consider a pay cut to work for a company whose mission and values aligned with their own. They want to work in an environment where culture transcends the office walls.
An interesting example of a culture shift happening now in some companies is the move to a results-only work environment (ROWE). Under that model, employees are measured on their performance and output, not by time in the office or hours worked. While the ROWE model may not be right for every company, it’s a good example of how culture can evolve in times of change. No matter what kind of culture your company has, it’s important that cultural alignment and hard work are rewarded. Employees at every level are more likely to remain committed when they have a clear path to success.
Another important aspect of culture is making sure that all employees feel welcome and have a voice. To that end, robust diversity, equity and inclusion (DE&I) initiatives should be a priority for every organization. Evaluate your organization and make sure that people of all races, ethnicities and genders have a seat at the table—your company will be better for it.
Ultimately, building and empowering a positive company culture starts from the top down. Leadership must be involved and transparent, acting as the standard bearers of their company’s culture. Great culture also requires full buy-in from front line managers. They are the models of culture for their teams. If leadership and management don’t live into the culture, why would anyone else? Whatever your company’s values and policies are, make sure they are well-defined and clearly communicated. Be receptive to change and let your organization’s culture evolve as it does.
The “great resignation” represents a significant challenge for many organizations, but it is also an important opportunity. For a long time now, employees have been struggling to balance work with the other aspects of their lives. It’s time to finally usher in much-needed change that will enable our employees to really thrive. Doing so will create positive outcomes for businesses as employees will work harder, be more engaged and more committed. For leaders in such an uncertain time, what more could we want?