The UK workforce has become more diverse than ever, with staff from five different generations working together. Kimberley Dondo examines how employers can support, cultivate and utilise a younger workforce.
CAREER DEVELOPMENT FOR THE YOUNGEST WORKERS IN A WORKFORCE WHERE PEOPLE ARE RETIRING LATER
Graduates and millennials tend to get a bad reputation when it comes to the workplace. Often labelled as entitled, lazy and tech-addicts. However, Generation Y and Z have a lot to offer especially when it comes to joining the workforce and bridging the skills gap that has arisen in recent years. Which is why almost half (44%) of UK organisations are aiming to recruit the more graduates than in 2018 than they did in 2017. Gethin Nadin, Director, Global Partnerships, Benefex comments “Born after 1995, Generation Z are set to become the largest generation ever – reaching 2.52 billion – and by 2025 they will account for 30% of the workforce. Therefore, it’d be remiss to not take their wants and needs seriously. Their existence was rocked by terrorist attacks, and two economic crashes; Generation Z came into this world with their eyes wide open in the aftermath of these great events.”
While companies may be eager to recruit more millennials into their workforce, employers are still not aware of how to nurture and support a younger workforce in order to retain and receive the best from them.
Employers may make the error of focusing their attention on training that is targeted specifically at millennials as Tony Glass, GM & VP EMEA at Skillsoft notes “Many organisations are focusing their training specifically at this group of employees. Often companies believe millennials need specialist treatment, but the creation of so called ‘millennial-focused’ learning and development (L&D) programmes can run the risk of excluding other age groups.”
This can create unnecessary divisions between the different generations in a workforce and it has been proven that it is a myth that millennial learners require radically different learning content and approaches than previous generations. Research from Skillsoft found one common myth is that millennials respond better to digital content assets, such as short, high production quality videos. However, millennials actually rate digital books as a more important learning asset than any other generation. This group of learners also shows a strong preference for handouts and other written material for learning reinforcement – something commonly associated with older generations.
Glass suggests, “Rather than creating a segregated training approach – one designed exclusively for millennials – organisations should adapt to meet the needs of a much broader, more diverse group: the modern learner. Successful L&D teams are embracing the informal, ‘always on’ nature of learning by creating an ecosystem that offers diverse learning modalities with multi–generational appeal.”
While millennials possess a skillset that previous generations may not have, they also have greater expectations for what they want from their employer. They expect transparency from their managers, stability in their job roles, experiential rewards they can share with family and friends and ultimately, they want a job that accelerates their career development.
“The reality of Millennials is that they are looking for more than just a Monday - Friday job that can fund the weekends.” Dawn Howe, marketing manager at tombola states. “They want the dream, they want passion for what they do, they want to feel like they are making an impact, and that they are important. They don’t want to be just another cog in the wheel. This desire for growth has negatively labelled the young workforce as ‘job hoppers’ and Millennial retention has become a nightmare in the eyes of the employer.”
Millennials and graduates aren’t willing to settle for a position unless it is the perfect fit – what is known as the Goldilocks syndrome. Research from Gallup found that half of the respondents were actively looking for better opportunities and 35% of workers had changed their jobs within the last three years.
“Employers should embrace the Millennial’s attitude to work by making opportunities for growth available.” Howe advises, “Young people are a crucial part of tombola’s development; by sourcing talented individuals to progress with the company, they will help us to grow and build upon our company’s reputation and success.”
SUPPORTING THE NEEDS OF MILLENNIALS WHO MAY BE IN DEBT OR LOOKING TO GET A MORTGAGE – climbing the ladder
It’s easy to assume that with the plethora of money saving deals available for everything from utility bills to credit cards, together with the gradual relaxation of mortgage underwriting criteria, Millennials have never had it so good. Firstly, Millennials have suffered from a lack of wage growth, unlike their parents. According to research from the London School of Economics’ Centre for Economic Performance the average weekly earnings between 2002 and 2008 rose at an average rate of 4% a year and prices at just 2%. The recent budget also reduced economic growth from 2% to just 1.5%, which means the future looks bleak for millennials.
Employers may feel a sense of obligation to assist their workers with managing their finances, as the effect of financial worries on productivity in the workforce has proven in recent years. Jonathan Watts-Lay, Director, WEALTH at work comments “Learning how to manage money is an important life skill and developing good financial habits early on can lay the foundations for financial security in the future. By introducing financial education into the workplace across all career stages, including for younger employees who are just getting started out, more people will be able to learn the basic principles of money management which will benefit them not only throughout their careers, but also later in life.”
It is also important to take into consideration that millennials and graduates have different savings priorities compared to other generations. They are looking at purchasing their first home and paying of debts they may have accumulated during their studies. “The pension is of course a valuable workplace savings vehicle but employers also need to think about the bigger picture and provide a range of savings vehicles such as a Lifetime ISA (a great option for those who want to save for a deposit on their first home due to the guaranteed bonus), ISAs and share schemes alongside the pension. This can help employees engage with their with their short, medium and long term savings goals.” Watts-Lay adds.
With the average age of becoming a first-time home owner now 32, real wages stagnating and the cost of living rising, assistance in this area can include guidance in how to save for a mortgage, decryption of jargon, the amount of deposit needed, government support and ultimately access to mortgage advisors paid for by employers. “As this becomes more of an issue, companies who have forward thinking in this area may offer a point of difference for this pool of talent and will ensure they are supporting the overall health and wellbeing of their employees.” Adds David Walker, chief commercial officer of Personal Group.
It is also time to move away from the traditional methods of assisting their younger workforce with their savings. There are other options out there for millennials who are notoriously known for not being engaged with pensions and retirement savings, being the generation of instant gratification.
Phil Hollingdale, executive chairman at Smarterly explains “Millennials are not engaged by pensions as the benefit is too distant for it to be recognised or appreciated. Millennials are more focused on short to mid-term goals and life events such as saving for a home, funding a honeymoon or building cash reserves to start a family. While many will be carrying student debt they still recognise the need to save. A savings plan which is more accessible, and tangible will receive more recognition than pension contributions.”
Savings vehicles such as stocks and shares ISAs offer the potential for better returns compared to cash based ISAs which have very low returns, but they have been se seen as complicated and risky. “Employers can help their employees, of all ages, to build healthier savings habits by offering a workplace stocks & shares ISA designed to make investing simple and easy through new digital savings platforms. These new platforms deliver an engaging employee experience with an Amazon style e-commerce shopping experience and an App for tracking the performance of investments. With interactive modelling tools they help employees assess potential returns and to choose from ready-made portfolios which suit their financial goals, aspirations and attitude to risk. Integrated with an employer’s benefits platform further enhances the user experience and facilitating investments through payroll deduction makes it convenient and frictionless for the employee.”
Giving employees, especially millennials, a benefit they can access more freely will appeal much more than saving into a pensions plan and showing them potential returns with stocks and shares ISAs will encourage good savings habits. If employers direct some of their pension contributions into a workplace ISA that will further encourage people to save. It costs the employer nothing to implement a workplace savings platform or to re-direct a percentage of the contributions from a pension to an ISA, but it can have a material impact on employee engagement and their financial wellbeing.
When it comes to making their pay go further, millennials would rather receive experiential rewards such as cinema and retail discounts, with one in four wishing to share their rewards with family and friends. Employers need to be more creative with the workplace perks and detox their benefits packages of a one-size-fits-all solution. Incentives such as flexible work hours encourage s better work-life balance which millennials appreciate.
Financial wellbeing support is crucial to reduce stress levels which in turn improves job satisfaction as well as productivity.
APPRENTICESHIPS – BUSINESS OPPORTUNITIES AND DRAWBACKS
The apprenticeship levy was introduced in April 2017 as a way of placing young people into their desired industries directly. For employers with particular skills gaps, apprenticeships can be very useful as employers are able to mould the skills the apprentices learn to specifically fit a particular job role. Karen Bates, HR Director at Opus Energy, comments, “Apprentices, have more to prove and are therefore more willing to learn and be moulded to the needs of a business. What apprentices lack in experience, they are likely to make up for in greater loyalty to their employer.”
Apprenticeships are a cost-effective method for businesses to bridge the skills gap as the government provides support by matching a variety of incentives for employers.
A survey by training and apprenticeships provider Positive Outcomes found that 87% of respondents believed that apprenticeships gave young adults an advantage when it came to job hunting. While the outcomes for apprenticeships may be perceived to be positive figures show that the number of apprenticeship starts have fallen by 59% between May and July 2017, compared to the same period in 2016.
“One reason for the fall is likely to be the confusion the levy caused. Many large employers are still trying to understand the rules around paying the levy and how they can use this to finance apprenticeships within their business. It becomes even more confusing where the employer is part of a group structure as there are set rules about sharing levy amounts across the group. The complexity of the levy is likely to cause large employers to pause their apprenticeship plans until they have a full grasp of the scheme.” Croner Head of Legal, Andy Willis explains.
While apprentices may be more loyal and cost effective for a business, they require more guidance and mentorship unlike their graduate counterparts. The levy also requires apprentices to spend one day a week away from the workplace. For smaller employers this may too much of a burden for them to carry especially when graduates are easier to incorporate into a business, as they don’t require close management and training.
“Once employers have gained more understanding of the levy scheme and put their business plans in place, it’s likely the number of apprenticeship starts will increase again. Whether this hits the government’s 3 million targets or not, remains to be seen.” Willis concludes