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Turnover of staff is increasing in Australia and managers need to find new ways to engage and retain millennials who want more from the workplace, human resources experts say.
The millennial generation – those born from 1981 to 1997 – is considered to be less loyal and less committed to an employer than previous generations.
Instead many are more focussed on the career development and learning options their employer can provide to them.
“Millennials are particularly interested in the whole notion of ‘what can the company do for me in terms of my career’. If they can see that there’s some learning and development options that their competitors don’t have down the road, they’re likely to stay,” says Tim Barker, a leadership and change management expert at consultancy Winners At Work.
“They conceptualize the workplace as a vehicle to their career. Instead of saying, ‘My career is tied up in the organization,’ they see it as a stepping stone for their career. So, they have a different mindset about the organisation.”
Baker says organisations should pursue “very pragmatic” relationships with millennials, rather than just assuming they will be loyal to the employer in the same way past generations were. Instead, employers need to strike a bargain: “You commit to helping us achieve our strategic direction and we commit to giving you career development opportunities and flexible practices.”
According to a survey by employment agency Hays, staff turnover rose at 29 per cent of Australian employers in 2016 while just 14 per cent were able to reduce turnover.
Turnover is a significant cost for business, with some studies suggesting that each departure can cost a business as much as double that person’s annual salary.
Barker says the cost is often underestimated by business. Managers are generally aware of the loss of productivity while a role is unfilled, the cost of recruiting and training a new staff member, and the time it takes for the staff member to get on top of the new job.
But Barker says the cost begins to mount even before a worker has handed in their notice. “By the time someone decides to leave, their productivity might naturally have been on the decline for up to two or three months,” he says.
He has conducted many exit interviews with departing staff in companies he consults to and says that most people don’t want to leave their job – they won’t leave unless they feel they have to.
“The number one reason without a doubt is a poor relationship with their boss or their manager,” he says.
Eve Ash, a motivational psychologist at Seven Dimensions, says the main factor which keeps staff at a workplace is engagement – that is, how committed they are to the organisation.
“Engagement is the whole thing of what keeps people motivated to stay for the long-term but, also, performing at their best where, if they’re engaged, they’re more likely to deliver on potential. One of the big things about engagement is challenge and opportunity. It kind of builds loyalty and it makes people feel good about their work,” she says.
Ash says communication makes for a good employment relationship and managers who meet regularly with staff are usually highly respected by them. Rather than just having good intentions, managers should commit once a month or once a fortnight to having a one-on-one discussion with staff members about their careers or how they are tracking in their jobs. A useful approach is to actually commit to these meetings in their diary.
Also important, says Ash, is that managers acknowlede the work and effort of team members. “When you get positive feedback, you are motivated. It’s a morale boost,” she says.
Ash says that while pay is an important factor for people in deciding whether or not people take a job it usually isn’t a factor when people decide to leave their job.
Karin Sanders, Head of School of Management and the UNSW Business School, says the focus of millennials on the career development and learning options means employers need to adjust their approach or staff turnover will rise.
“Employers need to accept more that there’s another attitude, another personality, another lifestyle, and if they want to keep the people involved, then they need to adjust,” she says.
“As an employer, you need to make clear what the person can gain. It’s not by making the assumption that every employee is happy that he or she has a job. That’s a really old assumption.”
The new approach requires more of human resources professionals and managers, who should understand what each staff member wants to achieve with their career and their learning goals and try to accommodate them. “It asks much more of a good alignment between the individual interest and the interest of the organization. It asks more of the supervisors of leadership,” Sanders says.