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Gen Y Talent: How to Attract and Retain the Young and the Restless

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Written by Janet Shaffer of Aardvark Writing

white paper | Gen Y Talent: How to Attract and Retain the Young and the Restless

Contents
Introduction Gen Y Is Here How Gen Y Is Wired Gen Y In The Workplace HR (R)Evolution Holistic HR Staying Competitive Changing the Rules Conclusion 1 1 2 3 5 6 7 8 9

Introduction
Ready or not, Gen Y is here. Gen Y will change the rules of talent management, states David Weisman, Director of the Fidelity Center for Applied Technology. It is essential that companies evolve their HR programs and services to deliver to Gen Y and that they focus on recruiting and retaining this next generation of workers. Weisman, and Meredith Paxton, VP and Offering Leader for Talent Management of Fidelity HR Services discuss the issues surrounding Gen Y in the workforce, covering: The impact and influence of Gen Y Why Gen Y behaves differently than Gen X and the Baby Boomers New insights on attracting and retaining Gen Y talent How HR is changing the way it operates How HR is adapting service delivery to meet the needs of Gen Y As HR professionals, we spend a lot of time discussing the war for talent. Now we can focus a little more on the next generation that we are fighting for. HR needs to think and talk differently to recruit and retain Gen Y; there are subtle and not-so-subtle nuances companies need to take in serving them. The rules of the game are clearly changing in all aspects of talent, says Weisman.

Gen Y Is Here
There is a dramatic demographic shift occurring in the workforce; maximizing Gen Y talent is essential for future organizational success. Yet, there are companies that ask why they should adapt their current talent management strategy to meet Gen Y expectations. Eighty percent of respondents in a Fidelity study said that Gen Y talent is extremely important or very important to business success over the next 5-10 years; however, 7 percent of those polled felt Gen Y talent was either somewhat important or not important at all. Until recently, the world has been dominated by the Baby Boom generation workers currently in their early 40s to early 60s who compose a majority of company management. Gen X workersthose in their 30sare overshadowed by the size and the power of the Baby Boomers. Now the children of the Baby Boomers are beginning their migration into the workplace (Figure 1). Generation Y, also known as the Millennials, is already laying its claim to the future of business. The digital natives of Generation Y do not know life without technology and the Internet, states Weisman. The rest of us are digital immigrants in the world that that Gen Y has grown up in, and we talk a different language.

white paper | Gen Y Talent: How to Attract and Retain the Young and the Restless

Figure 1

According to Forresters North American Consumer Technology Adoption Benchmark Study 2007, Gen Y uses social networking sites almost 3 times more than the rest of the population, reads blogs 2 times more, and utilizes instant messaging 1.8 times more. The only technological advancement that Gen Y has not embraced as its own is email. Email is not the primary way the younger generation communicates with its peers.

How Gen Y Is Wired

Gen Y has grown up in a very different world from that of previous generations. Research shows that by the time most Gen Y kids get to college, they have spent 10,000 hours playing video games (compared with 5,000 hours reading a book). Engaging in the repetitive tasks of such activities is rewiring Gen Y brains. The older Gen X goes online to accomplish a task and then walks away from the computer. Gen Y goes online and offline seamlessly and does not make a distinction between one and the other. Younger people expect to be able to communicate with others anytime and anywhere.

As a group, Gen Yers are multitaskers, often with short attention spans. They are used to being engaged, communicated with, and trained in ways that are very different from that which worked for the Baby Boomers. Gen Yers do not want to sit through long lectures or read a lot of text; they expect things to be entertaining and fast-paced. Customization is very important to Gen Y, declares Weisman. These people expect things to be tailored to them in their work schedule, recreation, and lifestyle. Nothing is taken standard.

Gen Y In The Workplace

In 1980, the workforce was dominated by the Baby Boomers; three decades later, they are still in the majority. However, if change is not already here, it is coming soon. By the year 2010, Gen Y will make up the largest segment of the working population (Figure 2).

Figure 2

Gen Y traits such as technology savvy and the ability to multitask add value to both the workforce and the organization. But some organizations believe that other skills such as personal communications skills, collaboration skills, and the ability to build informal networks are not as highly valued. These things are essential when competing in a rapidly changing global market. Collaboration leads to innovation, declares Paxton, and innovation is extremely important

white paper | Gen Y Talent: How to Attract and Retain the Young and the Restless

to business today. Companies cannot underestimate the value that the Gen Y population brings to the workplace. Gen Y has the talent and the ability to succeed in the workplace. Weisman states, These are very driven kids. They are not slackers looking for a way to cut corners. They are looking for more flexibility and for people to measure them on their work done, not on their attendance. Companies that can do this will attract and retain a larger portion of Gen Y talent. Gen Y workers often exhibit the following workforce and work style characteristics: They expect flexible work hours They need praise and continuous feedback They like to work in teams/collaboratively They are task-oriented They expect employers to be good corporate citizens They would like the company to provide time for volunteer/community work Their relationship with their direct supervisor is the relationship they value most Gen Y does seek mentoring opportunities, even though the percentage of companies that agree the relationship with direct supervisors is the most important falls lower on the list than the other items (only 59 percent of respondents to a Fidelity study agreed or strongly agreed). This younger generation needs someone to mentor them and to be open and supportive of it. Companies need to think about the right mentor, cautions Weisman. Often it is a Boomer, not a Gen Xer. Gen Xers are often the worst mentors for the younger generation because they may not understand why Gen Y workers are coddled; Baby Boomers who have Gen Y kids are much more willing to mentor. Besides valuing mentoring relationships, Gen Y workers seek challenging projects with significant business impact and expect to be promoted quickly, but this group values its work/life balance more than financial rewards or career advancement. Tailoring workplace needs to Gen Y workers is important to attracting and retaining talentGen Y workers are often more focused on career advancement than loyalty to the company.

HR (R)Evolution
Retaining talent has never been an easy task, states Weisman, and now Gen Y is going to make the job even tougher, Paxton adds, Organizations need to evolve their HR programs and services to adjust to the needs of the Gen Y workforce. Weisman says, HR service delivery is critically important in achieving a successful approach with Gen Y and positively impacting their employment with an organization. Research shows that over half of Gen Y workers plan to leave their current employer within five years (Figure 3).

Figure 3

Businesses are divided in their level of organizational readiness. An HCI webcast poll found that 21 percent of respondents have already implemented strategies and plans to attract and retain the emerging Gen Y workforce, 25 percent are considering it in future planning, and 36 percent say their companies are currently researching options. Only 15 percent of survey takers had no immediate plans.

white paper | Gen Y Talent: How to Attract and Retain the Young and the Restless

Organizations need to understand what works and what does not work to form the deployment of new strategies, cautions Paxton. Of the same HCI audience, 37 percent say their company has been successful and 45 percent have been somewhat successful with previously implemented plans to attract and retain Gen Y. The Gen Y workforce will affect recruiting, learning and development, compensation and benefits, performance management, succession planning, and workplace tools over the next two to three years. The rules have changed. Recruiting will see the biggest change; there are new sources on which to focus and new ways in which companies can look for talent. Effective workplace tools need to be made available to the Millennium generation to fully harness their power. Younger workers expect things like blogs and instant messaging. Organizations need to keep this in mind as they move forward with talent retention strategies.

Holistic HR
Many opportunities exist to engage Gen Y, but Paxton says, It is really about the individual. There are hundreds of touch points where HR can engage on a personal and professional level. HR should look at what is going to motivate this audience and take an end-to-end view for each individual. See how HR can influence the touch points through the service delivery modelthe how, when, and where the programs are delivered, and the tools that offer assistance along the way. A traditional approach to talent management may suffer from a lack of coordination and continuity; adapting to Gen Y may involve creating an integrated talent management program. Gen Y workers want better retirement, health and welfare, and total compensation plans with more options, more flexibility, and better decision support. Key additions to existing benefits lineups will be driven by Gen Y workforce demands (Figure 4). HR must link all of the individual elements together and not take a silo approach, helping Gen Y understand how all of the components of their career fit together. Paxton explains, Companies need to offer the kinds of services that help an employee manage their health and their wealth.

Figure 4

Companies that win in the war for talent may incorporate an interest in flexibility and place more of a focus on work/life balance and personal interests. To successfully recruit Gen Y, HR must understand the needs of the talent. Gen Y expects honesty and transparency, states Weisman; It is a deadly mistake to promise something and not deliver.

Staying Competitive
Not all companies recognize the changing landscape with respect to Gen Y and recruiting, says Paxton. Recruitment mediums have changed, and it is worth looking at how new channels will affect recruiting. In the next few years, company career sites, online job sites, and employee referrals will still be effective methods of mining new candidates, but social networking sites and blogs will also play a huge role in attracting the next generation. Virtual worlds such as Second Life are still in their infancy, but promise to offer another option for finding Gen Y talent. Employees are asking for different things, and companies need to brand themselves to adapt to this. Companies need to pull together the interests of each population to make a win-win situation for all.

white paper | Gen Y Talent: How to Attract and Retain the Young and the Restless

Many organizations feel unprepared for Gen Y when it comes to particular aspects of HR program management. They need to adapt HR programs and offerings for this younger generation. They need to improve training and educational resources for both Gen Y employees and managers supervising Gen Yers. They need to update technology and communications delivery vehicles to take advantage of Gen Y expertise. Finally, the families of Gen Yers are more involved in their childrens lives than in previous generations, so companies need to communicate with the family as well as with the individual.

Changing the Rules

In tailoring HR to Gen Y needs, it is all about the individual. Companies can prepare for this generational shift with a service delivery model that relies on three elements: simplicity, integration, and decision support. Gen Y does not have a lot of time to waste and wants to get to the point. HR needs to think about how to enable Gen Y to take action quickly. It also needs to consider how the business process fits within the context of traditional HR delivery Talent management can no longer exist in a silo; holistic HR is essential with Gen Y employees (Figure 5). This generation wants to know their next steps and would like readily available information to help them make career decisions. HR

Figure 5

must support Gen Y as well as managing the capabilities of the organization. Decision support is no longer just about reporting. It is about predictive analytics, clear reporting, and making sure that the company has the tools and assessments to enable each Gen Year to make the best choices.

Conclusion
To get Gen Y involved in talent strategies, Paxton says, There is no better input than Gen Y themselves. Active involvement from Gen Y will achieve better results than listening to a Boomer in a suit, adds Weisman. Enlisting the aid of Gen Y in recruiting their peers will enable the organization to be where the puck is going, not where it already is. Clearly with Gen Y, says Paxton, the rules of talent management have changed. To be an employer of choice, companies have to develop and deliver programs and services that attract employees and retain them for the long term. Gen Y employees want more flexible work options, chances to give back to their community, more learning opportunities, recognition for contributions, and tools that enable them to make the best decisions quickly and easily. Gen Yers are more demanding about advancement and about asking for what they want. HR needs to address Gen Y concerns and effectively provide this group with what they need. The investment we make from a talent perspective needs to pay off by keeping the attention of the Gen Y team, declares Paxton. It is up to HR to link how Gen Y learns and grows over the course of their career.

Based on the HCI Webcast Gen Y Talent: How to Attract and Retain the Young and the Restless, presented March 25, 2008. This paper is in the Talent Strategy Community, E-Learning Track. The sponsor is Saba. Moderator Joy Kosta Directory HCI Communities, Human Capital Institute Presented by Meredith Paxton VP, Offering Leader For Talent Management Fidelity HR Services As Vice President and Offering Leader for Talent Management at Fidelity HR Services, Meredith is responsible for the overall design and development of the talent management offering. Meredith has worked with dozens of clients across a range of industries including financial services, consumer and retail products, manufacturing, and architecting and designing comprehensive HR outsourcing services. David Weisman Director Fidelity Center for Applied Technology David Weisman is a director on the Competitive Technology Assessment team within the Fidelity Center for Applied Technology. He brings to Fidelity over 20 years of experience in technology analysis and research as well as financial services. Prior to joining Fidelity, David was vice president of Industry Strategies Research at AMR Research, Inc. and served as vice president of Global Research at Forrester Research, Inc.

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