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How Can Big Companies Attract and Retain Gen Y?

By Melissa J. Anderson

According to a new study by PayScale and Millennial Branding, Gen Y workers prefer jobs at small businesses and tech companies.

According to the study of 50,000 Millennial individuals in the United States, the top five companies for younger workers (based on Gen Y pay, the percentage of Gen Y workers, and measures of Gen Y job satisfaction, stress, meaningfulness of job, flexibility, and environmental consciousness) are all technology companies – Qualcomm, Google, Medtronic, Intel, and Microsoft.

But despite these huge companies topping the list, the “highest concentration” (47%) of Millennial employees is at companies with 100 employees or less. Dan Schawbel, founder of Millennial Branding comments, “This report confirms that Gen Y is an entrepreneurial group, highly versed in social media, and prefers freedom and flexibility over big corporate policies.”

Large companies offer many perks to their employees, but according to this survey they still seem less able to recruit and retain Gen Y individuals than smaller firms. Can they learn to compete by creating a more entrepreneurial workplace culture?

Underemployed?

The study also showed that while over 63% of Gen Y workers have earned a bachelor’s degree, the most common jobs they reported having didn’t require a college education. PayScale and Millennium Branding attribute this to the weak economy, which has forced many people to take jobs they are overqualified for.

Schawbel continues, “While they are the future corporate leaders and change-makers, they are suffering in this economy by having to work in retail jobs over professional ones. A bachelor’s degree can no longer be traded in for a job.”

But their skills largely revolve around the Internet – focusing on areas like online marketing and social media. According to the report, the top job skills reported by Millennials compared with all workers are “(1) Tableau Software, (2) Blogging, (3) Social Media Optimization, (4) Press Releases, and (5) Polymerase Chain Reaction (PCR) Analysis.”

The study also showed that Millennials were more likely to choose college majors dealing with science or business – the top three, relative to all workers were Neuroscience, Bioengineering, and Entrepreneurial Studies.

Katie Bardaro, lead economist for PayScale, notes, “Millennials are arming themselves with skills and educational training focused in technology and social media, two areas with great growth potential.”

“However, the shaky economy has forced many of them into a world of underemployment nonetheless,” she adds.

What Can Large Companies Learn?

The study showed that most Millennials are working for smaller businesses and have a keen interest in entrepreneurialism. That could spell trouble for global corporations down the line, as they work to develop the next generation of corporate leaders.

Schawbel suggests that Gen Y workers might be drawn to smaller companies because they are more agile and responsive in a tough economy. He says, “First, many large companies have hiring freezes, where no recruiting occurs for several months because HR is accessing their talent pool and trying to cut costs.”

He continued, “Second, it takes several months to get into a large company, when it could only take a week to get hired at a startup. With larger companies, candidates often have to go through several rounds of interviews, usually starting on the phone and then in-person.”

“Finally, a larger company can pigeonhole you in a specific job role. Although big companies usually pay more, research shows that Gen Y prefers meaningful work over money,” he adds.

Companies looking to recruit and retain more Millennial employees should focus on agility, efficiency, and flexibility. Working quickly to get younger workers into the pipeline and enabling them to practice new skills will help retain these skilled employees as they rise through the company. As Schawbel noted, “You’re going to see Millennials force companies to allow them to telecommute or work from home, however the job gets done. I think it goes back to the old term R.O.W.E., results only workplace environment.”

By mimicking the features of small businesses that interest Gen Y employees – like responsiveness and flexibility – larger companies can better succeed at attracting and retaining high performing young people who will eventually be needed to take on the reigns of leadership at top companies around the world.

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