The cost of not investing in the millennial workforce
It’s no secret that workforce dynamics have changed. You only need to look at the average office these days to see the increase in those aged under 40. In fact, for some industries, we see offices who only have employees in their late 20’s – to 30’s.
But let me ask a question: “With that increase, what have organisations done to accommodate or adapt to these new workforce generations and ways of working?”
Putting Covid-19 aside – because let’s face it, this left-of-field missile shunted every organisation to change ways of working – my question stems beyond that. It’s one thing to change ways of working, but it’s another to understand your workforce.
While we read and hear a lot about millennials, the question of “Why is it so important for organisations to understand?” seems to fall on deaf ears.
If I were to reframe this and ask instead, “What is the cost of not investing in understanding your millennials?” it would probably pique your interest.
As our Baby Boomer population continues to retire, stats indicate that 70% of our workplace now consist of Generation X and millennials. The projection rate of growth of millennials is set to increase steadily in the next five years. Which means that the growth rate for most organisations will be driven – and lead by – a millennial workforce.
Great news for organisations who have invested in their millennial workforce and built cohesive, high performing teams. Huge risk for those organisations who haven’t.
The shift in dynamics has given rise to pain points and frustration across most industries. Many of which are having impacts to: communications between clients and colleagues, recruitment and attracting quality talent; retention rates; levels of engagement; training and maximising potential; interpersonal relationships; productivity, success, and overall bottom line.
What is the cost of not investing in understanding your millennials?
In some cases, organisations who are choosing to ignore or turn a blind eye, are being faced with huge risks that include:
- Loss of talent. Millennials are already relatively unpredictable when it comes to decisions on their places of work. Studies show that of any generation, they have the highest shift across industries and workplaces, because they work in places that fit with the demands of their lives. In simple terms, if a workplace doesn’t shape up to their needs, they will leave.
- Loss of productivity. Declines in productivity usually correlate with declines in revenue or growth. Productivity correlates with engagement, which is turn, usually correlates with the type of work or tasks, management, and career progressions.
- Financial loss. A 2017 Mercer study found that loss of productivity due to physical and mental health issues alone is costing the UK economy circa £77.5 billion a year. With a strong correlation between rising rates of mental health and millennials, this stat alone should prompt organisations into action.
- More specifically, there are financial costs associated with declines in productivity, and investment made to onboarding and training.
While the average cost of a millennial employee varies depending on salary, surveys suggest that it can cost anywhere between £10,000 and £20,000 to replace each millennial lost. This is expected to rise.
There are however, ways to minimise these risks. It starts with education: investing in understanding your millennial workforce. Who they are, what they value, and what they want.
The cost will ultimately come down to the level of risk you are willing to accept, and the subsequent decisions you make as an organisation. Ignorance is no longer an excuse.