Retaining Millennial Talent: 4 Tips for Small Businesses

by Jennifer C. Loftus

With a global pandemic and economic recession causing many small businesses this year to work from home and revise internal processes, the concept of company growth has likely been a pain point for leaders like you. In fact, many businesses that want to expand are now focusing primarily on retention, as it is often cheaper and more effective compared to hiring efforts.

In particular, retaining millennial employees has become a hot topic. As a growing majority of the current workforce, implementing strategies that engage and meet the needs of your millennial staff is crucial if you want to set the foundation for organizational growth.

So, how can you retain your millennial talent? Before we begin, let’s look at a few key statistics:

• According to the U.S. Bureau of Labor statistics, millennials will make up 75% of the US workforce by 2030.
• A study conducted by CONE stated that 75% of millennials are willing to take a paycut to work for a value-aligned company.
• Over 90% of millennials own a smartphone and 85% use some form of social media.
• Around 21% of Millennials report switching jobs within the last year, and 60% are open to a different opportunity under the right circumstances.

Millennials grew up during the rise of the internet. Being online at such a young age allowed them to not only become well-versed in technology but also exposed them to many world and societal issues early on. This is likely why many millennials have firmer stances on values than previous generations do. It’s not uncommon that they’ll look for new opportunities that better align with what they believe in, as well as an employer that genuinely takes their needs into consideration.

Additionally, many millennial workers entered their careers around the 2008 financial crisis and its aftermath. With a large proportion of this generation already experiencing a wealth gap and high levels of debt, many millennials have seen that loyalty doesn’t always bring long-term security. Over 25% of surveyed millennial workers expect to have six employers or more in their lifetimes, versus 10% back in 2008.

While the events of 2020 will have new impacts on millennial turnover rates, many of those same pressing needs have sustained. We at Astron Solutions often work with growing businesses to improve their internal employee management and compensation strategies. As we head into this new year, here are our top essentials when it comes to retaining millennials in your workplace:

1. Encourage a flexible work structure.
2. Promote a tech-savvy workplace.
3. Prioritize business stances when it comes to social issues.
4. Offer opportunities for professional development.

With millennials soon becoming the bulk of the American workforce and your business entering an unpredictable economic and social climate, taking the steps to retain your millennial workforce should be a top priority going forward. Let’s begin.

1. Encourage a flexible work structure.

A flexible work structure has become an increasingly important priority for modern organizations. Millennials are much more likely to stick with a company that values mental health and well-being, with ample PTO and a flexible schedule being key ways to help meet those needs.

This year, remote work has taken the stage and become a necessity for many. While you may think this will come to an end once COVID-19 is over, remote work opportunities are becoming more of the norm in terms of a flexible work structure. Currently, 98% of all employees, regardless of generation, want the option to work from home for at least some of the week across the rest of their careers. 

Offering a flexible work life with remote options is beneficial for the following reasons:

• Assisting in recruiting efforts.
• Enhancing worker morale.
• Boosting productivity.
• Allowing for business continuity during emergency circumstances such as a weather disaster or pandemic.

Overall, the ability to go remote should ultimately result in higher retention rates, especially for your millennial talent. However, you can’t forget about the challenges of remote work. For one thing, fostering a healthy work-life balance while at home is difficult now that it’s harder to distinguish between work and personal life. In addition, effectively managing your employees when they’re all in different locations can be a hassle, and open up a host of local legal compliance issues.

One possible idea to foster healthier work life balance is to emphasize a strict time when employees should unplug for the day. Make sure also to set up a specific work-from-home program where staff can predetermine what days they’ll be working remotely and effectively communicate the tasks they’ll accomplish. This way, you know exactly which employees are doing what and where they’re doing it. This is one reason why using dedicated project management software has quickly become the norm across sectors, which we’ll touch more on below.

2. Promote a tech-savvy workplace.

Leading in this digital age means that you need to keep up with current trends. Remember, millennials are the generation that grew up during the technology boom. With their familiarity of devices and knack for adapting to new systems, employers should keep this in mind when upgrading to more modern solutions.

For instance, instead of depending on unintegrated Excel spreadsheets to keep track of business engagements, what other tools and solutions can your workforce take advantage of? While you probably already have a couple of these solutions under your belt, here’s a general list:

• Talent management platform to track and facilitate all aspects of the employee lifecycle, from recruitment to training to compensation changes.
• Project management system to organize daily tasks and oversee all team member projects.
• Email communication system to connect quickly with team members.
• Video conferencing software like Zoom to encourage face-to-face engagement when working remotely.
• Digital time tracking tool to virtually clock in and out of work.
• Integrated and secure tools to process and accept online payments and compile financial reports.

Digitizing your operations is more critical than ever, but the added bonus is that millennials will be more attracted to tech-savvy, digitally-efficient workplaces. With more employees and projects to manage, having a dedicated system to facilitate and track engagement is key.

3. Prioritizing business stances when it comes to social issues.

The events of 2020 have brought many social issues to the forefront in both our professional and private lives. This has made it even more imperative for businesses to take a strong stance and proactive approach when it comes to employee engagement, internal culture, hiring, and more.

Let’s take a look at the following issues that you should be aware of:

• Diversity, equity, and inclusion (DEI) is now a huge priority, especially among millennials. In The Deloitte Global Millennial Survey of 2018, 69% of millennials with diverse management teams felt that their workplaces were both more stimulating and motivating as a result. This priority has increased even more in this past year, as diversity and social issues have become a larger focus.
  • We strongly recommend that you review your own DEI guidelines and ensure that you’re following them in every regard. Make sure to bring these guidelines to the forefront for any discussions with potential hires, as well as make them fully accessible to current employees.

• Environment and climate change is another large issue that has consistently been top of mind for millennials. In Deloitte’s 2020 survey, it’s stated that 83% of millennials believe in climate change and want to take actions towards addressing it.

• • We recommend that you take a look at your current environmental footprint and review if there are any major ways you can minimize it. Consider cutting down on paper or implementing a strict recycling program, and make sure to advertise this to your team.

• Increased social responsibility at both the individual and corporate level. For many millennials, the pandemic has only reinforced their desire to bring positive change to their communities. Around three-fourths of the survey respondents to Deloitte stated that the pandemic has even made them aware of new issues and more sympathetic to others.

• We recommend providing opportunities for your employees to give back, whether through volunteer opportunities or team fundraisers. Along with this, make sure you consider your role in corporate social responsibility. Implementing volunteer grants or matching gift programs are great ways to show your team that you’re actively supporting the community. According to Double the Donation, many businesses are even expanding these programs to further empower their employees in supporting the causes that matter most to them.

The tips above don’t cover every social priority that your millennial team will have, but they do cover some major ones. It’s important that you deeply consider where your own organization fits into these issues and how you can emphasize your stance on them with your own policies. Sending out a survey to your staff members is an easy way to determine the causes they’re most passionate about.

4. Offer opportunities for professional development

More and more millennials are seeking employers that actively invest in them for the long term. According to Gallup, 87% of millennials say professional growth and development opportunities are one of their top priorities.

For starters, employers that offer and actively encourage employee development opportunities will often have lower turnover rates. Millennials want to advance and learn new skills that help them move forward in their chosen career.

How can your business take the steps to push these opportunities? Explore the following:

• Record training courses led by your leadership team or outsourced professionals. Having pre-recorded content is a great resource for you to offer employees if any of them want to brush up on their skills or learn any new ones. Just remember to update these videos if new policies or best practices come to light.

• Set up a mentorship program that pairs employees with more experienced team members. Structure these mentor partnerships depending on the roles that the employee wants to grow into or based on the skills they want to develop. You can even do this while everyone’s remote with key video conferencing tools!

Along with these opportunities for job development, consider the more subtle ways you can motivate your employees to thrive in their role and advance. For instance, a common trend we’ve been seeing is using a creative rewards and recognition program to reinforce engagement and motivate workers. 

Your millennial workers are sure to value any unique form of appreciation that you have for them. Consider celebrating their accomplishments with a fun party or a themed lunch. You might even set up a point reward system that grants top performers with points and badges for each successful task. A certain amount of points can then result in prizes that range from bonuses to a fun gift.

Just make sure that these events and tactics aren’t framed in a way that replaces more meaningful professional feedback, recognition, and changes to benefits and compensation.

To summarize, retaining your millennial employees is a little more complicated than one might think— don’t make the mistake of simply offering more pay and neglecting other underlying forces and motivations. You have to keep in mind millennial priorities, values, and needs as a generation, especially if you want them to continue with your business for the long haul.

By providing flexible work structure, prioritizing social issues, investing in key technology, and offering ample opportunities and motivations for career development, you can better ensure that your millennial talent sticks around and continues to grow alongside your business.

 

Jennifer C. Loftus is a Founding Partner of and National Director for Astron Solutions, a compensation consulting firm. Jennifer has 23 years of experience garnered at organizations including the Hay Group, Parsons Brinckerhoff, Eagle Electric Manufacturing Company, and Harcourt General.