There are millions of fresh college grads burning the midnight oil in the workplace, giving 110% of their energy and effort to their employers…yet most of them are barely bringing home enough income to survive.
Why do so many companies let their new talent burn themselves out? Why don’t they provide adequate compensation – at least enough for them to pay their rent and their student loans in the same month?
They do it because they can.
Millennials are hungry to put their degrees to work, even if it means living with mom and dad. Employers capitalize on that desperation, knowing that as soon as one worker tires out, there will be more kids spilling out of colleges, ready to give 100% even if they’re getting almost no compensation in return.
Considering the fact that 47% of millennials spend half of each paycheck on student loan payments, the never-ending stream of willing – and debt-ridden – workers is not surprising. If that isn’t convincing enough, consider a recent (albeit unconventional) study, which found that 30% of millennials would sell an organ to pay off their student loans!
These companies may think they’re getting a “deal” when they find these debt-ridden workhorses, but they probably won’t stick around for long: 60% of millennials leave their jobs within three years. Making matters worse, it costs companies between $15,000 and $25,000 to replace each departing millennial.
Moving forward, what should companies do in order to keep their talent?
- Pay them, pay them, pay them. Only 36% of millennials with college degrees have jobs that pay them at least $45,000, a statistic that is especially troubling in light of the fact that it reflects a major decline in wages over the past two decades. This is unsustainable! Nothing beats putting your money where your mouth is. Hiring managers need to pay attention to what they’re asking of their employees—if the employee is working every weekend, it’s time for a bonus. If you really can’t afford a pay increase, look for other ways of rewarding their efforts.
- Respect their vacation time. This country is due for a dialog on the importance of vacation time, and it might just be the best thing for corporate bank accounts. Studies show that giving the brain enough “downtime” is critical to allowing it to process all of the information it has taken in and map out ideas to implement in the future.It’s no surprise our best ideas come to us when we are doing nothing! Give your employees the opportunities to have those breakthrough moments, instead of just thinking about how time off will negatively impact your bottom line.
- Compensate with growth. Know that your employees are looking for jobs elsewhere if you’re not helping them grow. In fact, the number one reason millennials leave their organizations is lack of career growth opportunities. I see this all the time in my practice—discontent Gen Y’ers come to me when they sense that their current employer has dropped the ball on their career development. I then help them land the jobs they want, including the big increases in responsibility that they’re so hungry for. If you want to keep your workforce around, ask them what they would like to see happening with their growth in the company—and do what you can to facilitate that growth. It’s no longer a workforce where employees are looking to satisfy their company- today’s workforce expects that relationship to be reciprocal. This could also take form of paying for continued education courses, or even hosting them in office.
- Know their title counts. This generation values responsibility at work, and the titles you give your millennial employees are an important reflection of that. We live in a world where resumes matter, and employees know that if their title sounds absurd, their options for future employment may be, too. It may not matter to you while you’re in a bind to post a job and not sure what to call it, but it matters for the recipient. Dan Epstein, the CEO of a business consultancy staffed almost entirely by millennials, advises the development of “in between steps and titles”, which may be one way of meeting them in the middle when you aren’t able to provide other benefits.
There are countless incentives and benefits you can offer your millennial employees, but the biggest thing is paying your talent. If you don’t pay them, you’ll inevitably be paying a headhunter, and your company will be paying the price in lost productivity and replacement costs.
Start changing your policies now as a way of ensuring that you are attracting the best millennials to work for you, instead of for your competition. And once you have them on your side, do what you can to make sure they are valued and rewarded. The old saying rings true in the workplace: love’em – or lose ‘em. It’s up to you.