How to retain Millennials
- Sep 16, 2019
- 5 min read
The workspace is changing and Millennial's expectations are changing with it.
Millennials now comprise 33% of the workforce, and are set to fill 50% of all leadership positions by 2025, [Source: Gartner / Mercer and Gartner].
With Unemployment in the UK at a 40-year low, it has never been more important for Agencies to understand this key group, their values, and how to meet their expectations of workplace culture and employer care.
Many Millennials have graduated into a world of economic and technological change and, in the UK, of extraordinary political uncertainty.
Added to which, some of the big financial decisions they face have become much more challenging:
“The number of people paying into a pension hits a 60-year low.”
Pensions crisis/The end of final salary schemes
The UK has also been hit with high and now stagnating house prices – locking people out of home ownership and into extortionate, dismal rental arrangements. [Source: Guardian/Forbes]. Research shows that three-quarters of people worry that long-term homes are out of reach and the level of concern is highest among members of Generation X, now aged between 37 and 50, and Generation Y, aged between 15 and 36. A poll by Ipsos/Mori for the housing charity Shelter also found that 25- to 34-year-olds have moved more than twice as frequently per year of their lifetime as pensioners. Millennials attitude to Finance Services Millennials are a sceptical bunch in general, and no industry has felt their collective distrust as heavily as the financial services sector. In the aftermath of the global financial crisis, movements such as Occupy Wall Street and Bank Transfer Day made it clear that this generation has little faith in the people who manage the nation’s money. [Source: Huffington Post] A study conducted by Millennial Disruption Index also showed that 71% would rather visit the dentist than listen to a bank message! Is if that wasn’t enough of a barrier, the financial services industry is also incredibly confusing - customers have to potentially deal with a diverse group of professionals such as brokers, financial planners, insurance agents, investment managers and bankers - each paid differently. An American advisor has also pointed out: "The old brick and mortar office with the guy in the suit, millennials are not interested in that,'' he says, adding that if his introduction to a prospective client starts with the title Personal Finance Planner, “their eyes glaze over. They already have their idea about what I do, and they don't want any part of it.
“But when I lead with 'I help professionals in their 20s and 30s use money as a tool to live a life they love,' they open up.'' [Source: USA Today]
The Finance Services Industry attitude to Millennials
However, most financial planners have no interest in working with Millennial clients: a recent survey of 500 advisors by consulting firm Corporate Insight found that just 30% are attempting to gain clients under age 40. [Source: Huffington Post]
This attitude is largely driven by the fee structure which the majority of advisers have built into their practices, which is based on clients having an existing pot of assets which they seek to charge a percentage of – typically as much as 1% of the value of the pot.
This works against millennials who are at the early stages of building an investment portfolio.
Many Millennials would be excellent candidates for benefitting from a financial planning service but never take advantage because they are not exposed to a service that would work for them
So, what really matters to Millennials?
Whilst much popular coverage of this generation is negative – we have all read the articles about ‘snowflakes’ - it is also a generation marked by creativity, flexibility, open-mindedness and a strong sense of social responsibility and concern for the environment. [Source: Guardian/Forbes]
Research also shows that millennials bring fresh energy and perspective to organisations and are often a driving force behind workplace change.
But this is also the generation that clocks in with the lowest percentage of engaged employees!
This may be simply because as millennials get older they are able to navigate their career, finding work that better suits them, which in turn increases their levels of engagement. But the fact that they are the major advocates of change also suggests that they're 'waiting' for their employers to catch up.
They are also an ethical generation: Millennials value brands that enhance their lives:
50% of Millennials are more willing to buy from a company that supports a cause.
37% of Millennials are willing to pay more for a product or service that supports a cause they believe in, even if it means paying more.
In 2016, another survey found that 76 % of millennials said they’d rather take a pay cut than work for a company with unethical business practices, indicating a purpose gap between perceptions of workplace culture and the expectations of the Millennial.
[Source: Millennial Marketing]
Deloitte’s 2015 Millennial Survey also found there is an “impact gap” between Millennials and organisations because, while Millennials believe that companies meet their expectations on job creation, they are “underperforming on social advancement, helping employees, etc.,” illustrating a huge disconnect between the social good that Millennials want from companies and what’s actually delivered.
All of which presents a golden opportunity for creative businesses:
Research by Deloitte research has also found that organisations with the sort of inclusive cultures that Millennials want, tend to be:
Six times more likely to be innovative
Six times more likely to anticipate change and respond effectively
Twice as likely to meet or exceed financial targets!
In Conclusion
Creative businesses need to find ever evolving ways to reach out to their crucial Millennial employee audience in order to compete for the very best of these potential recruits and retain them.
Compensation and benefits packages have always been closely monitored but demonstrating ‘value’ rather than ‘worth’, could be the most important aspect to monitor for the Millennial workforce.
The opportunity lies in making the benefits that businesses already pay for more relevant. Linking workplace pension and company life assurance and income protection schemes, for example, directly to their employees’ financial futures.
Rather than just providing a list of benefits, make ‘Financial Stewardship’ educate and inform employees about how these benefits can help them feel more confident about their futures.
Island are a financial services business with a very different agenda to the general market.
We believe that we should help our Millennial audience by addressing their core needs and asking questions that are personally relevant, such as:
How do I put a roof over my head?
Where do my student loans fit in?
How can I efficiently manage my income and expenditure (without giving up on the things I enjoy)?
What might retirement look like?
What would happen if I was unable to work?
This makes the benefits package more meaningful and valuable and a more meaningful and impactful investment for the agency. It also makes how you provide financial benefits directly relevant to the type of ethical, inclusive and caring culture that are so important to this critical employee group.
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