Millennials at Work by InSites Consulting

MILLENNIALS AT

W RK DS TO BUILD UNDERSTANDING GEN Yâ&#x20AC;&#x2122;S NEE GY A FUTURE-PROOF HR STRATE

JOERI VAN DEN BERGH KRISTOF DE WULF KIM VERHEYDEN

illennials (born 1980-1996) are entering the workplace in

increasing numbers. Estimations say that four years from now, Millennials will make up 50% of the global workforce1. Raised differently and in different times, Millennials clearly are not like the previous generations, both in their attitude and in their approach towards work and this often causes frictions and misconceptions. Older generations accuse Millennials of being entitled, less accountable and even lazy. No less than 61% of seasoned HR professionals believe Millennials are hard to manage and unprepared for the workplace2. Millennials themselves also seem unhappy, with only 29% of

employed Millennials currently feeling engaged with their work . As 3

a result, 6 out of 10 Millennials leave their company after less than three years at an estimated cost to the organization of $20,000 per person to substitute4. As the retiring Baby Boomer generation will need to be replaced in the upcoming years, many CEOs fear they will not find the right talent to succeed5. It is therefore critical for organizations to understand how to attract and retain Millennial talent. It is even more important to learn how to optimally capitalize on the Millennialsâ&#x20AC;&#x2122; talents and maximize their impact on business performance. This white paper aims to show how & why Millennials are different and how companies can adapt their HR approach to become more Millennial-proof.

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MILLENNIALSâ&#x20AC;&#x2122; DIFFERENT WORKING PERSPECTIVE Millennials were raised and educated differently than Generation X and the Baby Boomers and it has affected their working attitudes and preferences. In this first chapter weâ&#x20AC;&#x2122;ll highlight the 6 key differences: #1 Millennials are more individually empowered #2 Millennials are more collaboratively oriented #3 Millennials are more purpose-driven #4 Millennials enter a work context that is less favorable

and less certain

#5 Millennials enter a work context that is more complex #6 Millennials enter a work context that is changing

rapidly and is more digitally fueled

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#1 MILLENNIALS ARE MORE INDIVIDUALLY EMPOWERED 06

Millennials are raised and educated with a less hierarchical parental and educational approach. They were taught to form their own opinions and develop their own perspective. Strongly stimulated to develop themselves, they often enjoyed an ample supply of attention and appraisal in their journeys. As a result, Millennials often showcase an abundance of assertiveness, self-confidence and can do mentality. Similar to the games they played in their childhood, Millennials strive for mastery and aim to continuously level up their performance. They embrace an entrepreneurial mindset and desire ownership of their work and ultimately their careers6. Being digital natives, Millennials are also accustomed to high levels of customization via the internet and are addicted to instant feedback (think of obsessively checking the number of Facebook likes for their status updates).

As they enter the workplace, Millennials therefore desire and expect: â&#x20AC;˘ A high level of autonomy. 72% of Millennials would like to be their own boss7. Millennials do not react well to orders and often dislike doing a job without understanding its end purpose8, while micromanagement is often mentioned as one of their biggest reasons for leaving an organization9. â&#x20AC;˘ A high level of coaching and feedback. When Millennials do work for a boss, 79% of them would want that boss to serve more as a coach or mentor10, just like their Baby Boomer parents have treated them their entire life. Millennials are also keen on frequent feedback: they want communication with their manager more frequently than any other generation in the workforce. 42% of Millennials want feedback every week, which is more than twice the percentage of every other generation11. â&#x20AC;˘ A high level of customization. Millennials grew up in an age of customization enabled by the Internet and therefore expect a similar level of customization in their work12. They widely support the prospect of being able to customize benefits, with almost three quarters agreeing this would be very appealing to them13.

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#2 MILLENNIALS ARE MORE COLLABORATIVELY ORIENTED Though Millennials are individually empowered, they are not individualistic. In fact, they are often considered less individualistic than 08

Generation X and their Gen Z offspring. Baby Boomer parents have accustomed Millennials to democratic decisions. In school, this generation was using a cooperative learning style. As a result, Millennials are team-oriented, often bonding together and socializing in groups. They believe that a team can accomplish more and create a better end result than an individual. Again this can be translated into other desires in the workplace: â&#x20AC;˘ Limited bureaucracy and hierarchy. While everyone dislikes bureaucracy, Millennials are known to like it least14. Millennials expect to work in communities of mutual interest and passion rather than in structured hierarchies15. â&#x20AC;˘ A collaborative team approach. 88% of Millennials prefer a collaborative work culture to a competitive one16.

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#3 MILLENNIALS ARE MORE PURPOSEDRIVEN With a growing education level and most basic Maslow needs fulfilled, we saw the importance of classic status symbols decreasing gradually for Millennials while self-actualization and personal experiences are still heavily sought. Millennials are in search of additional meaning. 10

They often show a desire to reach the sixth (never formally included) Maslow level called intrinsic values - the need to pursue intrinsic values that transcend self-interest17. Work, the income they receive from it and the status they derive from it, are still considered important but more as a means to an end. Millennials - often confronted with their parents’ stress-related ailments - feel a robust personal life full of exploration, experiences and meaning is more valuable than participating in the career rat race. That’s why they are looking for: • A sense of meaning. 92% of Millennials believe the success of a business should be measured by more than just its profits18. 60% of Millennials say a sense of purpose is part of the reason they chose to work for their current employer19. More than half the Millennials are even willing to take a 15% pay cut to work for a company that matches their ideals20.

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â&#x20AC;˘ A healthy work-life balance. 15% of male and 21% of female Millennial employees would be willing to take a reduced pay and even slow down or lose promotional opportunities if it resulted in working fewer hours21. Many Millennials are clearly struggling with finding the right equilibrium as 63% of European and 71% of US Millennials stated being unhappy with their work-life ratio in a recent InSites Consulting study. As shown in Figure 1, the worklife balance is the number one aspect for European Millennials. Next to that they are also in search of a good relationship with

Figure 1: Top 10 key job characteristics according to European Millennials Based on an online InSites Consulting survey among 9,650 respondents from 4 generations (Baby Boomers, Generation X, Generation Y and Generation Z) in 9 countries.

colleagues (76%), a fun working environment (74%) and a good relationship with superiors (72%). Six out of ten youngsters find it important to be responsible for their own agenda. This is even higher on the Millennialsâ&#x20AC;&#x2122; agenda than catching an above-average salary (57%) or attractive extra-legal benefits (55%)22. Apart from being raised and educated differently, Millennials also differ from previous generations in terms of the context in which they enter the workplace.

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#4 MILLENNIALS ENTER A WORK CONTEXT THAT IS LESS FAVORABLE AND LESS CERTAIN 14

The most important marker for Millennials is perhaps that many of them came of age during a very difficult time in our economy, as the oldest Millennials were just 27 when the recession began in December 2007. As a result, Millennials made important decisions about their educational and career paths during a time of great economic uncertainty. Today, although the economy is well into its recovery, the recession still affects the lives of Millennials and will likely continue to do so for years to come23. For the first time in history, student loan debts outstrip credit card debts24 and only half the Millennials say they feel good about the amount of money available to spend25. In this uncertain and unfavorable context, entry-level Millennials are realistic. Contrary to widely accepted stereotypes, they do not demand a six-figure salary. 39% percent of Millennials expect to make between $35,000 and $55,000,

which is realistic, given that the national average for entry-level jobs falls somewhere around $40,00026. The long-held belief that every generation should do better than the last is under threat. Millennials today are the first to earn less than their Generation X predecessors. During these times of economic uncertainty, Millennials also witnessed a dramatic shift in the employment contract. The belief that performing employees would be rewarded with job security has been altered dramatically. This trend is expected to continue, with multiple studies predicting that at least 40% of the workforce will be freelancers in the next few years27. These evolutions have fed the Millennialsâ&#x20AC;&#x2122; need for: â&#x20AC;˘ Job and income security. In these challenging and uncertain economic times, job security is still critical for Millennials. Though

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they have a natural appetite for new challenges and rotating jobs, Millennials are not the ultimate job hoppers some would have us believe. Given the chance, they will move on and move up, but more often than not they expect and intend to advance with the same employer28. Like other generations before them, they want the security of full-time work to ensure they can maintain their standard of living29. Business Insider found that 69% of Millennials said that money is an incentive that motivates them to work harder and stay at their employer longer. Though Millennials favor full-time work, over half still say they are open to non-traditional forms of employment (freelance, Uber-style gig work or portfolio 16

careers with multiple jobs), offering opportunities for more hybrid employment models in the future30. Many variety-seeking Millennials would rather use their unique talents and skills in project-style assignments for different employers or clients than to be stuck in a position at a certain company. They love the personal freedom, independence and flexibility that the gig economy is offering them. Employers of the future should think of ways to attract top talents in more flexible service agreements.

“Millennials are an interesting generation when it comes to work. They have healthy ambition, are very eager to learn and move fast. It’s a challenge to keep them motivated and curious. We created project-based cross-functional teams, let’s say gig style projects. These project teams give them the opportunity to learn and develop beyond their own skills from other team members, put challenges and opportunities on the table and deliver a full project from start to finish. They can choose the projects they want to work on, but have to commit time, contribution and high quality work.”

Anit Van Eynde, Vice President Brand Marketing LEVI STRAUSS&CO EUROPE

“We’ve seen candidates turn a very good offer down,

stating that they would prefer to go into a more flexible environment and not wanting to ‘limit themselves’ by joining one specific business area. Not out of fear, but from where they stand, they want to ‘try out stuff and don’t settle too early’. To respond to this need, we incorporated a flexible module during our training programs, allowing Millennials to earn additional experience beyond their normal training track.” Christoph Fellinger, Talent Relationship Management BEIERSDORF

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#5 MILLENNIALS ENTER A WORK CONTEXT THAT IS MORE COMPLEX In recent years, automation and offshoring have caused a massive decline of simple process and algorithmic work in many Western countries. As a consequence, work is getting more and more complex. 18

McKinsey analysts estimated that the number of skill sets needed in the workforce had increased from 178 in September 2009 to 924 as of June 201231. Thatâ&#x20AC;&#x2122;s why Millennials are looking for: â&#x20AC;˘ Life-long learning and development. 74% of Millennials feel that their colleges or universities did not properly prepare them for the workforce32 and more than 75% of Millennials expect to receive formal training in their first job33. And though more Millennials have a college degree than any other generation before them34, many understand the need for continuous skills development to remain employable. 93% percent want lifelong learning and are willing to spend their own time and money on further training35.

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#6 MILLENNIALS ENTER A WORK CONTEXT THAT IS CHANGING RAPIDLY AND IS MORE DIGITALLY FUELED 20

The context of work is changing more rapidly than ever. Technological advancements have given birth to entire new economic sectors and are redefining existing ones. Today, the impact of technology on our dayto-day work experience is very significant and is expected to accelerate even further in the years ahead. Being born in the digital age and often considered digital natives, Millennials are well equipped for this new reality. Often referred to as stimulation junkies, Millennials embrace change and value innovation as more important than previous generations. While older generations are still learning the real meaning of agile processes, Millennials are immediately ready for new and fast ways of working. As they enter the workplace, Millennials therefore desire:

â&#x20AC;˘ An innovative culture. 78% of Millennials state they were strongly influenced by how innovative a company is when deciding if they wanted to work there36. According to Business Insider, more than 40% of Millennials consider Google, Apple or Facebook as their ideal place to work37. â&#x20AC;˘ Agile processes. Though agile and scrum were developed in the 1980s, they address the exact same challenges that Millennials encounter in professional organizations: the desire to be autonomous, flexible and creative, while still wanting to collaborate around a shared mission and values. In agile thinking, the focus lies more on the outcome of a project and the why of solving a business problem, and scrum works with iterative creative processes rather than a fixed cascade project approach.

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THE SILICON VALLEY MODEL One region where the marriage between companies and Millennials seems to be very successful is Silicon Valley. In the complex and fast-changing tech industry, digital native Millennials are in high demand and today, many Silicon Valley companies are heavily skewed towards Millennials in terms of their workforce. The current median age of employees at major firms in the area ranges from 28 to 3138. Apart from the significant entry salaries, stock options and free perks that this war on Millennial talent generates, there are more reasons why Google, Apple, Facebook and Tesla rank top the list of ideal employers for undergraduates for many years in a row39. First of all, instead of focusing on fixed 22

processes and the traditional idea of productivity, many tech companies have an innovation focus, which often results in a more collaborative, output-oriented culture that allows for high levels of autonomy among talented employees. High value is also assigned to experimenting and continuous learning in order to realize incremental, iterative progress and a common mantra is Do it. Try it. Fix it40. Most tech companies tend to be intolerant of corporate bureaucracy and Silicon Valley executives often stress the importance of speed with quotes like â&#x20AC;&#x2DC;Move fast and break thingsâ&#x20AC;&#x2122; (Mark Zuckerberg) to their employees. Last but not least, Silicon Valley serves as a Millennial-proof work model: one that embraces big ideas and aspires to greatness. Millennials often see tech as their way of contributing positively to the world; with Google running a division to decrease mortality41 and SpaceX to explore new ways of travelling, it is easy to understand why Millennials can find a sense of higher purpose in this line of work.

Though this marriage has been very successful so far, more and more criticism arises and companies should be careful to apply the Silicon Valley model one on one. Much of the criticism can be attributed to too fast a growth and the corresponding neglect by HR. For companies, growing quickly in a very short period of time creates a serious HR challenge42. According to data from PayScale, tech start-ups with 100 or fewer employees have half as many personnel professionals as companies of the same size in other industries43. In many tech start-ups, the role of the human resource department is therefore focused on acquisition, with other personnel functions often ignored. The Stanford Project on Emerging Companies, a longitudinal study of 200 Silicon Valley start-ups during the first dot-com boom, found that tech entrepreneurs gave little thought to human resources. Nearly half the companies left it up to their employees to shape the culture and perform traditional human resource tasks and only 7% had the type of formal personnel management seen at typical companies44. This lack of personnel management can easily result in excesses or misbehavior, from general business mismanagement or even bankruptcy to excessive working hours (and corresponding health problems) to the rise of a brogrammer culture with limited attention for diversity. Evan Williams, Twitterâ&#x20AC;&#x2122;s co-founder and former chief executive, said his biggest mistake at the company was an HR-related one: not hiring enough experienced people during the companyâ&#x20AC;&#x2122;s period of hyper growth45. Finally, the utopian idea of tech companies operating in a positive sum game and only helping to make the world a better place is being questioned increasingly.

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CREATING A MILLENNIAL-PROOF WORKPLACE To remain competitive with New Economy companies and attract, engage and retain Millennial talent, organizations should translate the above learnings into Millennial-proof HR strategies. In the next section, we discuss how the Millennialsâ&#x20AC;&#x2122; work-related desires and expectations lead to 4 key recommendations regarding creating a Millennial-proof workplace: #1 Define a company purpose and communicate clear

company goals

#2 Establish a collaborative, team-oriented company

structure and culture

#3 Empower, develop and reward individuals #4 Create an office environment that promotes everyday

well-being and engagement

For each of these strategies, we share research results that show their business impact and we also include some best-practice examples.

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#1 DEFINE A COMPANY PURPOSE AND COMMUNICATE CLEAR COMPANY GOALS 26

The most important question for Millennials is whyâ&#x20AC;Ś They want a higher level of meaning in their work. The first step towards creating a Millennial-proof organization is therefore developing and communicating a strong sense of purpose. Mission-driven companies do not only appeal more to Millennials, they also perform better. They have 30% higher innovation levels and 40% higher retention levels and tend to be first or second in their market segment46. A strong company purpose defines a companyâ&#x20AC;&#x2122;s values in terms of all its stakeholders: employees, investors, partners and customers. When all stakeholders benefit, the business performs well47. Pharmaceutical companies are redefining themselves as wellness companies; retailers are reinventing themselves as havens of fresh and healthy food; tech companies are helping people obtain information; and so the list goes on. When you offer employees a purpose greater than financial return, you often

attract passionate individuals who want to contribute, which brings a level of commitment and engagement no compensation package can create48. Unilever is a strong example of how focusing on sustainability and values does not only positively impact a company reputation, but also boosts business performance as a whole. For instance, Doveâ&#x20AC;&#x2122;s clever fight against beauty ideals translated in the first 5-billion-dollar brand of the company. At Unilever, Paul Polmanâ&#x20AC;&#x2122;s CEO vision of doing the right thing has benefited the company in reputation (recognized as a global leader in social practices), in recruitment (Unilever is the third most searched for company on LinkedIn, just after Google and Apple) and in profit levels (all of its brands have a social purpose and nearly all have double-digit growth)49. 27

Building a goal-driven organization - one that communicates clear priorities and outcomes - is another key element to success. This is not new nor is it a specific desire among Millennials only. But in an increasingly less hierarchical and more empowered work context, clear goal setting, alignment and communication are becoming even more crucial. Without clear goal setting, a focus on collaboration and empowerment might benefit Millennials, but is likely to harm the organization as a whole. Surprisingly though, only 51% of companies even attempt to develop aligned goals. Among these, only 6% regularly revisit them50. Companies that revisit their goals quarterly obtain a threefold greater improvement in performance and retention than those that revisit goals yearly51. Defining and communicating clear company goals is not just a matter of strategic importance, it is of massive executional importance

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as well, with goal setting ideally not being restricted to senior management, but a company-wide exercise that involves all employees. In a business context that is changing rapidly and getting more and more complex, it is simply impossible to give each of your employees playby-play instructions. As shown in the book Made To Stick, defining and communicating clear goals (a so-called commanders intent), combined with a high level of autonomy for employees to reach them, is a much better strategy52. A clear and simple goal-setting process is a good starting point for agile processes, another element Millennials value in organizations. Southwest Airlines is a great example of how clear goal setting, align28

ment and communication benefits both the company and its employees. Similar to all other large airline companies, Southwest must coordinate thousands of employees, from pilots to baggage handlers. What makes Southwestâ&#x20AC;&#x2122;s operation so successful however, is that it uses a simple, overarching commanderâ&#x20AC;&#x2122;s intent (We are THE low-cost airline service) to guide and empower all its employees in their everyday decision-making. Since everybody in the company knows the ultimate end-goal of the total Southwest operation, it is easy for employees at all levels to apply this core principle in both everyday practices and in unforeseen circumstances without the need for micro-management. This gives employees empowerment, ultimately resulting in a stronger sense of autonomy, ownership and employee satisfaction. Southwest has one of the highest retention rates in the industry worldwide53 and has been consistently profitable for over 30 years, a rare example in its industry.

Southwest Airlines uses a simple overarching commanderâ&#x20AC;&#x2122;s intent to guide and empower all its employees in their everyday decision-making.

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#2 ESTABLISH A COLLABORATIVE, TEAMORIENTED COMPANYSTRUCTURE AND CULTURE 30

Millennials have a desire for less hierarchy and a more collaborative way of working. A Millennial-proof organization therefore needs to establish a more decentralized company structure and develop a culture that is more team-oriented. As we are gradually moving away from the traditional principal-agent model, the concept of productivity also needs to be redefined. It is important for managers to remember that their job is not to manage work but rather to develop, coach and ultimately help people realize a commonly shared business goal54. This affects the way the company should be structured and the culture it should try to create. Instead of a pyramid that pushes authority and power to the top, todayâ&#x20AC;&#x2122;s Millennial employees would envision a more collaborative, team-oriented company structure, one that rather resembles a circle in which information, authority, decision-making and rewards are

shared55. At Menlo Innovations, an American software company, the co-founders and CEO have stepped aside to let the team of employees make all of the decisions, including hiring, firing and budgeting. “I want to be very careful here because the term ‘bossless’ gives the impression that it’s leaderless”, said Rich Sheridan, Menlo Innovations’ CEO and author of Joy, Inc., an upcoming book. “We did get rid of hierarchy, but put in its place a structure that everyone understands”56. Zappos got rid of job titles, managers and hierarchy and implemented what is called a Holacracy, replacing the original top-down model with a system that spreads power distribution across the organization. The

Tony Hsieh, CEO of Zappos, who implemented a Holacracy model replacing the original top-down model.

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idea behind it is that titles often stifle creativity and can entail an unproductive hierarchy. Removing the titles creates a more united, cohesive team of employees57. Two out of five of the key pillars of Netflix’ HR Policies are team-related. “Managers create great teams. Recruiting the right people should be the top priority and Hire, reward and tolerate only fully formed adults.” This does not only benefit the company, but also all employees who work there, as the (lack of) quality of direct co-workers is considered a central driver of job (dis)satisfaction58.

Reed Hastings, founder and CEO of Netflix Inc. Two out of five of the key pillars of Netflix’ HR policies are team-related.

Though Millennials thrive on collaborative work and look for a high level of support from colleagues, few companies have yet figured out how to build a culture that helps existing employees to mentor new hires59. Implementing a formal mentorship program can therefore be a good idea. It allows entry-level Millennials to learn and receive feedback from more experienced coworkers. It also creates a level of social bonding to help establish a more collaborative, team-oriented culture60. Finally, a mentor program can boost employee engagement and retention rates. In one of the Sun Microsystem mentoring program, mentees reported a 23% higher retention rate than non-participants. The benefits were also reflected among the mentors who participated - 20% were more likely to stay with the company when participating in the program. It saved the company $6.7 million dollars61. In a traditional mentorship, seasoned professionals team up with less experienced and often younger colleagues to guide them through their career. But as the business world and especially technology continue to rapidly evolve, it is now becoming increasingly common for younger professionals to turn the tables and pass on their digital skills and share fresh perspectives with their older counterparts62. Reverse mentoring works both ways: it pairs older workers with younger ones to educate each other on how the business works and in the end to find new ways of improving them together63. There are numerous

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benefits of reverse mentoring. First of all, it closes knowledge gaps for both parties. Secondly Millennials gain a greater sense of purpose and empowerment than in traditional mentor programs. Last but not least, reverse mentoring can help rejuvenate the entire company. Millennials come in with fresh eyes and open minds and can act as change agents who challenge the status quo. Since November 2014, AXA has been

running a reverse mentoring project. All participants can learn more about various digital ecosystems, while employees of different generations get a chance to interact with each other on a new, equal level. The program was reported to be very successful, attracting more than 1,000 participants in its first year64.

“We offer open classes for senior managers, explaining the ‘phenomenon’ Millennials. If they understand the why behind their behavior, they can better handle the situation. And the same goes for explaining the value of senior managers’ experiences to younger employees via the principle of mentoring. Millennials tend to value learning from more experienced people.”

Christoph Fellinger, Talent Relationship Management BEIERSDORF

An office environment that emphasizes open spaces also promotes collaboration. Spaces where employees can move when and where they want provide autonomy and flexibility. Having leaders in open or glass offices also communicates a sense of transparency as well as an organizational openness to questions and feedback65.

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#3 EMPOWER, DEVELOP AND REWARD INDIVIDUALS Knowing that Millennials highly value individual empowerment, a Millennial-proof organization gives a high level of autonomy to its 36

employees. In such an organization, the concept of a manager as boss needs to be redefined. A leader’s role today is to unlock people’s potential, not to control people66. Higher autonomy does not only benefit Millennial employees, research has shown that when employees are given more autonomy, decision-making power, time and support, the company makes more money overall67. LinkedIn is a great example of a company that empowers its employees. One of its core values is Act like an owner and the company built a true culture around this core concept. LinkedIn has inDays, i.e. one Friday a month employees are allowed to work on personal projects; the company reserves $5,000 a year for professional education. The company created an Incubator platform, allowing employees to pitch ideas to top executives. It also offers an opportunity to compete for up to a $10,000 donation to an employee’s charity68. Valve, a $4-billion-dollar video game company,

offers modular work so employees can select the projects they want to work on in the exact same way they would if they were freelancers. As a result, employees have more control of their work and ultimately own their outcomes69. In an organization that empowers individuals, the traditional performance review often renders ineffective. The concept of forced ranking, once popularized in the 1960s, is therefore increasingly falling away because it strips the autonomy and judgment of its leaders, often discourages very high performers and in the end only rewards those in the middle70. About 90% of employees do not believe that their companyâ&#x20AC;&#x2122;s appraisal process provides accurate information71. Large companies, such as Deloitte, Adobe, Accenture and General Electric, are therefore abandoning their annual review processes. But getting rid of annual performance reviews does not imply that performance management is not important or that employees have no incentives to over-perform (or lack incentives to avoid underperforming). Netflix uses the keeper test strategy instead of annual performance reviews: each year, managers evaluate their staff by answering a single question, â&#x20AC;&#x153;Which of my people, if they told me they were leaving in two months for a similar job at a peer company, would I fight hard for to keep at Netflix?â&#x20AC;? People who are not marked by managers as necessary are let go unconditionally. Instead of the need to prove that these employees are performing below par and without a need to build extensive case records, Netflix simply writes generous checks72.

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An increasingly popular initiative to empower Millennial talent is intrapreneurship, providing a culture and incentives that allow employees to act as internal entrepreneurs. Intrapreneurship can help companies to keep Millennials engaged at work. It also installs an innovation-oriented culture that allows for a faster response to changes and helps avoid bureaucratic inertia. Bacardi is currently using intrapreneurship to address Millennial challenges, both in and outside the company. They recently appointed a Global Millennials Manager. Her role is twofold: attract and retain Millennial talent at Bacardi as well as improve the companyâ&#x20AC;&#x2122;s relationship with Millennial consumers73. Mondelez started Shopper Futures: an initiative to harness a start-up entrepreneurial spirit and discover technology solutions for real business 38

challenges. Mondelez identifies early-stage innovators in order to learn from them and in turn gives these start-ups the opportunity to collaborate with its brands and retailers via in-market case studies. In the end, nine start-ups receive funding to work one-on-one with a cross-generational team of marketers from Mondelezâ&#x20AC;&#x2122;s US and Canadian brands such as Oreo, Halls, Ritz and Cadbury as well as with one cooperating retailer client. This is the second time Mondelez has launched an intrapreneurial program. The antecedent Mobile Futures led to several viable apps that were sold to other companies74. Apart from autonomy, Millennials want mastery - they want to continuously improve themselves. Ideally they want to be coached rather than managed in this process. A coaching culture with a strong emphasis on ongoing learning and continuous feedback systems is therefore

The Sampler team, the winners of Mondelez Shopper Futures 2015

â&#x20AC;&#x153;The start-up dream and mentality has become an important competitor when it comes to recruiting and retaining Millennials.â&#x20AC;?

Christoph Fellinger, Talent Relationship Management BEIERSDORF

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critical to become a Millennial-proof organization. Again, this strategy does not only benefit Millennials, it also helps the company as a whole. The coaching culture is the practice that is most highly correlated with business performance, employee engagement and overall retention75. Longitudinal research has proven that companies that overinvest in Learning & Development (spending per employee) rated highest in employee retention, innovation and customer service and outperformed their peers threefold in long-term profitability76. Still, as most leaders are rewarded for making their short-term numbers, more than half the companies spend less than $500 a year per employee on training77. Boston Consulting Group (BCG) understands the long-term importance of Learning & Development. The average training time per year 40

for full-time salaried employees at BCG is 100 hours, a number that is considered rare for companies of this kind where the focus tends to lie on billability. Yet, thanks to their extensive training, many newcomers show very steep learning curves and graduate to leadership positions within a short time span78. Like all other generations, Millennials want job and income security. Compensation is an important factor in employee satisfaction, but salary is often considered a hygiene factor, not an engagement factor79. In other words, in most cases where the compensation is not high enough, people will leave - but increasing compensation does not directly make engagement increase. Once the pay is considered competitive and fair, the issue of money is often off the table and non-fi-

nancial or even non-package-related job elements like level of autonomy and learning opportunities drive job attractiveness, engagement and satisfaction more strongly. A Millennial-proof organization therefore takes a more multi-dimensional approach when it comes to rewarding its employees, an approach where salary is just one element in the equation and employees have options to customize their benefit package to fit their individual needs. Another effective reward mechanism that can drive engagement is continuous and ongoing recognition. As soft as it seems, saying thank you is an extraordinary tool to build an engaged team. High-recognition companies have 31% lower voluntary turnover than companies with poor recognition cultures80. When JetBlue implemented a peer-to-peer recognition system focused on the company values, employee satisfaction surged by 88%81.

JetBlue implemented a peer-to-peer recognition system focused on the company values, which made their employee satisfaction surge by 88%.

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#4 CREATE AN OFFICE ENVIRONMENT THAT PROMOTES EVERYDAY WELL-BEING AND ENGAGEMENT 42

Millennials consider work as an important but ultimately instrumental element towards their overall well-being. Managing the work-life balance is therefore very important for Millennials. A Millennial-proof organization understands this and creates an office environment and culture that promote its employeesâ&#x20AC;&#x2122; everyday well-being. This process starts with redefining productivity. In a rapidly changing and complex business context, the concept of productivity changes and the relation between traditional productivity drivers like hours worked and job performance becomes much less linear. In fact, working more hours does not only harm individual employees, it can even negatively affect business performance as overworked people tend to burn out, produce lower-quality output, provide lower levels of customer service and may become depressed82. Nourishing employee well-being is therefore in the interest of both employer and employee. This insight is now widely

accepted and has even reached industries that have been notorious for their crazy work hours and high stress levels. JPMorgan Chase recently introduced the Pencils Down program, aiming to improve the work-life balance of its bankers. The program can be seen as a protected weekend strategy: employees are not expected or sometimes even not allowed to work during weekends unless they are on a live deal. It is a strategy many Wall Street firms are currently employing, as the industry is struggling hard to attract and retain Millennial talent. JP Morgan Chase tracks banker hours weekly in a report reviewed by the Head of Global Banking. Anyone working too many hours gets a call from him to find out why and, more importantly, to define what needs doing to fix the problem83. 43

â&#x20AC;˘ Flexibility in work location and work hours is another key driver of employee well-being. Yet today, many companies still cling to a rigid model of fixed working times and mandatory attendance systems. This system may well have been perfect in the industrial age, many Millennials consider this approach highly outdated. Again, changing these policies can benefit both employees and the organization. There is evidence that employees are more productive if they have a greater autonomy as to where, when and how they work84. A survey by ConnectSolutions found that 39% of those who work remotely report greater productivity while working off site and 42% of remote workers feel they are just as connected with colleagues as if they had been working on-premises85. Cisco strongly recognizes the value of supporting the work-life balance

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by providing space, policies and tools to help its employees. In Cisco’s offices worldwide, many employees no longer have an assigned workspace. Instead, each time they go to a Cisco office, they can choose an available workspace that meets their needs at that moment. Employees may also work just as often at home, a customer site or a coffee shop. Their work hours are not standard eight to five either. Several Cisco technologies support this dynamic flexibility86. Netflix has instituted an unlimited parental-leave policy allowing employees to spend more time with their newborns and to choose return dates balancing their responsibilities at home and at work87. 44

• Office environment is quite crucial in employee well-being. Seemingly trivial elements can have a notable impact. For instance, exposure to greenery and sunlight yields a 15% increase in well-being and creativity and even a 6% increase in productivity88. Office workers with access to windows get 46 minutes more sleep per night89. • Finally, a company culture that promotes fun and engagement leads to higher employee well-being. About 80% of employees of companies denoted as great in Fortune’s 100 Best Companies to Work For indicated they work in a fun environment90. SAS, the No. 2 place to work for for the last 15 years, has an in-house daycare center, gym and pool and the company’s turnover rate is below 2 percent91.

A glimpse inside the SAS offices in North Carolina (USA), the No. 2 place to work for.

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THE SCANDINAVIAN MODEL Whereas Silicon Valley is widely considered to be the economic darling of this era, Scandinavia is often appraised on a more societal level, providing a rich balance of personal comfort, economic strength and overall societal welfare to its inhabitants92. This utopia appears to extend into the workplace. The Scandinavian HR model93, though substantially different from the Silicon Valley one, is often seen as another successful route towards employee satisfaction, engage46

ment and performance. It also - perhaps not surprisingly - ticks the boxes for almost all Millennial work-related desires and expectations expressed above. First of all, the Scandinavian HR model is known for taking a holistic, humanistic approach with a multiple stakeholder focus (e.g. the public and private sectors, trade unions and employee representativeness)94. This approach expresses a more multi-dimensional attitude towards work in relation to personal and societal well-being, something that appeals strongly to Millennials. Secondly, the Scandinavian model is also a great example of how a collaborative culture and individual empowerment can go hand in hand. Despite a strong social fabric, Scandinavians highly value individual responsibility95 and Scandinavian companies tend to operate with flat, non-bureaucratic structures with a high degree of shared responsibility and accountability. But what differentiates the Scandinavian model perhaps most is its strong emphasis on employee well-being. While happiness and well-being have only recently become a focus for businesses

in the West, Scandinavia has a long history of putting the emphasis on the importance of these qualities in working life, with Scandinavian countries among the very few in the world that actually have a word for the meaning happiness at work (arbejdsglĂŚde in Danish, but variants existing in other Scandinavian languages as well)96. Scandinavian societies often apply the Lagom principle when it comes to work. Originating from Swedish, Lagom can be translated as enough, sufficient, adequate, or just right97. The concept aims to establish appropriateness, although not necessarily perfection, and moderation is considered the route towards realizing this. The Lagom principle translates most notably into the number of working hours; the average Scandinavian work week is among the shortest in the world98. Paid leave and holidays are also very generous, with employees often entitled to a full year of parental leave99. Scandinavian countries lead the way in terms of flextime, with roughly 25% of employees able to choose their working hours100. The Swedish Government has even experimented with a six-hour work day recently. Since February 2015, nurses in a Swedish retirement home had their work day reduced to six hours while keeping the same wage101. The initiative was soon followed by other companies, not only Swedish with Amazon recently making headlines by introducing a 30-hour work week for some of its teams102. There is also criticism however. Although the study initially found a positive effect on some productivity measures103, recent findings suggest the experiment might be too expensive to further expand or even continue104, which is exactly what more conservative political parties have argued from the start. Maybe a six-hour work week is not the lagom duration to maintain the current National Productivity levels, let alone make them grow.

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TO CONCLUDE While Millennials may not be prepared for the workplace of today, they are certainly more ready for the workplace of tomorrow. Compared to previous generations, Millennials are better equipped for a work context that is becoming more uncertain, more complex and more digitally fueled. In the expected war for talent, organizations should therefore understand how to attract, engage and retain Millennials and this paper shared numerous ways to make your company more Millennial-proof. As there is a wealth of research that shows that many of these strategies also have a significant positive impact on your overall business performance, making your organization more Millennial-proof is not just about Millennial pleasing or making concessions, it is about strengthening your organization as a whole in order to ultimately become more future-proof.

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Joeri Van den Bergh Co-founder & NextGen/Millennials expert InSites Consulting Joeri is an awarded global thought leader and marketing author on the impact of Millennials and Generation Z on marketing and business. He has extensive experience of all aspects of branding, marketing and advertising to kids, teens and young adults and is a frequently booked speaker around the world. His best-selling marketing book How Cool Brands Stay Hot: Branding to Generation Y and Z has been awarded several times (a.o. The American Marketing Association Berry-AMA Book Prize). @Joeri_InSites 50

joeri@insites-consulting.com

Kristof De Wulf CEO InSites Consulting With over 20 years of relevant experience with world leading FMCG brands, Kristof helps global brands to unlock the consulting potential that resides in ordinary consumers. He is co-author of the book The Consumer Consulting Board, has been awarded with the MOAward for Agency Researcher of the year 2010, and is a regular speaker at various research and marketing events worldwide. @kristofdewulf kristof@insites-consulting.com

Kim Verheyden Employee Happiness Manager InSites Consulting As Employee Happiness Manager (or HR Manager) at InSites Consulting, Kim is passionate about creating an environment that fosters and maximizes happiness for all InSitesâ&#x20AC;&#x2122; Smart Cookies. With over 10 years of experience in recruitment and HR management , Kim now leads a team of 4 colleagues and is responsible for the global HR strategy for InSites Consulting. @kim_verheyden kim@insites-consulting.com

Special thanks A word of thanks to Christoph Fellinger, Talent Relationship Management Beiersdorf, Anit Van Eynde, Vice President Brand Marketing Levi Strauss&Co Europe and Martijn van Bijnen, Research Director InSites Consulting for their help with this paper.

HOW INSITES CONSULTING CARES ABOUT MILLENNIALS

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PURPOSE AND CULTURE InSites Consulting is a new-generation agency stretching the boundaries of marketing research. Our purpose is to empower people to create the future of brands. We are currently making consumer centricity an everyday reality for more than one third of the worldâ&#x20AC;&#x2122;s most valuable brands. We definitely believe products, services, businesses and society in general will benefit from collaborating with customers/citizens. 54

Innovation is our lifeblood and keeps us ahead of the innovation curve. We have been acknowledged by the industry with more than 25 international awards and were nominated as one of the top 3 most innovative marketing research agencies in the world (GRIT). Over the last 10 years, we have grown at an average pace of 25% a year. Today, our team counts more than 175 enthusiasts working in six offices around the globe. No less than 87% of our team members are Millennials. We live by our FORWARD values and 4Ps of Employee Happiness. Our 7 FORWARD values define who we are and what we expect from our team members. In other words, they define the typical DNA of an InSiter: Forward, Open, Result-driven, We-oriented, Adaptive, Respect-

ful, and Daring. Our 4Ps of Employee Happiness express what we give back to our employees. It provides us with a lens through which we can evaluate the different initiatives we are taking when it comes to talent management: Personal freedom, Progress, Participation and Positivism. These 4Ps result from a switch we made a few years ago, moving from HRM to Employee Happiness with a clear BHAG: Caring for Growth.

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COMPANY WITHIN THE COMPANY Last year we introduced the Company within the Company principle, uniting different team members in mini-teams that have a clear and shared purpose. The main driver behind this new approach is to stimulate purpose- and goal-driven thinking. Teams are invited to define their team purpose and goals for the coming year, based on the company strategy. Sales teams for example are not only responsible for revenues but also manage their P&L, giving them greater degrees 56

of freedom in managing the growth of their team. This new philosophy is deeply rooted in our 4Ps of Employee Happiness. Itâ&#x20AC;&#x2122;s intended to create more personal freedom as teams are more empowered. It allows better and faster coaching of all team members and thus drives progress more naturally and efficiently. It fuels participation in decision-making as team members increasingly need to align with each other. And overall, it contributes to a positive working atmosphere. This new way of working requires strong teamwork, mutual trust between co-workers and a coaching practice in which ongoing feedback and a continuous focus on progress becomes the new normal. To support teams in making this switch, we introduced the habit thinking:

habits as a way to reinforce team performance and happiness. We defined 4 foundation habits (on the company level) we believe are crucial for teams to be successful in terms of performance, growth and happiness: Speak Up, Wanting to Wow, Trust & Empower and Chunk it to Dunk it. All teams are guided by habit experts to bring these habits alive and support them in their development.

ONGOING FEEDBACK AND PROGRESS/ DEVELOPMENT

Up to last year, we followed the classic performance management process, integrating every single best practice: objective setting, self-assessment, bottom-up and peer-to-peer feedback, calibration meetings, end-of-year evaluations. Unfortunately, this rule-based and bureaucratic process didnâ&#x20AC;&#x2122;t always bring us closer to our goal: (1) personal development and growth and (2) culture of feedback. This is why we made a radical change and killed our annual evaluations. Instead we installed a new approach where employees are in the driverâ&#x20AC;&#x2122;s seat of their career and ongoing feedback plays a central role.

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At the same time, we also ditched our performance rating system and cut the link between annual performance reviews and rewards. In other words, we moved from an ad-hoc-rating-based evaluation system to an ongoing cycle of performance management. Turning one rating into many conversations: â&#x20AC;˘ Recurrent check-ins: the classic performance review approach typically takes a top-down perspective, looks back, tries to spot weaknesses and bundles all of that in a yearly rating. We are replacing this annual cycle by a continuous practice of timely, short, 58

informal and frequent check-ins between coaches and coachees. These check-ins are meant to be a two-way dialogue: they should create room for cultivating strengths rather than tackling weaknesses. â&#x20AC;˘ 90-day goals: setting clear goals is key in the development and growth of employees. We believe that personal goals should be aligned with the corporate goals and strategy - making sure that we all contribute to the success of InSites Consulting and showing each employee the impact they have on the success of our company. We encourage employees to formulate goals in smaller chunks, leading to actionable objectives, more focus and opportunities to grow.

• Promotion management: employees are much more in the driver’s seat of their growth as they can file for promotion any time of the year - as opposed to once a year during the annual performance review. This allows people to grow at their own time and pace. When killing the annual performance evaluations, redefining our reward policy was crucial. As we were cutting the link between performance rating and salary increases, we needed to bring in a new approach, a strong sense of fairness was the key ingredient in our thinking: • Redefining what is a fair salary: the same way as Netflix bases pay rate changes on the market value of each position, our aim is to pay more than average versus relevant external salary benchmarks and guarantee internal fairness at the same time. By taking both an outward- and inward-looking perspective, we anticipate to limit peer-to-peer salary benchmarking and, by consequence, unhealthy competition and envy. • Bonus based on team performance and company profit: traditional performance reviews do not take team dynamics into account. Yet, we all know that great companies are built through collaboration and team work. That is why we will stop applying a bonus system for individual performances. Instead we are moving towards a team bonus that rewards the contribution of a team to the success of the company and shares the company profit.

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CARING AND ENGAGING WORK ENVIRONMENT In a competitive consulting industry, the workload can be intense and stress levels can be high. We want to create a supporting environment where employees feel appreciated and cared for. There is however 60

no such thing as one road to happiness, so a combined approach at different levels is what works best for us. We adopt a flexible working policy that allows employees to balance their professional and personal ambitions. Key in our approach is personal freedom: creating an environment where people themselves decide what, when and how they are doing things (within the boundaries of our business context). This is reflected in different practices such as our focus on getting things done instead of hours worked, flexible working schedules, flex-desking, (unpaid) sabbaticals, remote working, office closing between Christmas and New Yearâ&#x20AC;Ś The results of our latest Great Place to WorkÂŽ survey show that 86% of our employees agree that the offered flexibility matches their professional and personal needs.

An important source of happiness is social connection and the feeling of togetherness. To stimulate that social glue and engagement amongst employees, we allocate a significant budget to teambuilding initiatives. Every 18 months we organize an InSites Consulting Congress & Teambuilding with the aim of inspiring each other, exchanging knowledge, sharing stories that reflect the value of our work and cross-office team bonding. Over the years we have found that 4 key ingredients lead to the ultimate WOW effect: an inspiring theme, organization by and for employees, an exotic location and an engaging teambuilding activity. On average more than 100 employees actively contributed to the congresses. Last yearâ&#x20AC;&#x2122;s edition in Ibiza was rated with an overall satisfaction score of 9.4 on a 10-point scale. In addition, every office gets full budget autonomy to organize fun and informal team activities. This has led to the creation of local teambuilding teams and many bottom-up initiatives that contribute to a fun atmosphere and allow to disconnect from work.

Other programs such as the Happy Moments and Employee Appreciation Day are all about showing our care and appreciation. In our Happy Moments program we share and celebrate employees who recently got promoted, new employees joining, work anniversaries, birthdays, weddings and births. On Employee Appreciation Day all of the at-

tention goes to our employees and we say thank you in many different ways: free office lunch, massages or other healthy treats and a special thank you message for every individual employee. However, you don’t always need specific programs for employees to make suggestions or be engaged in decision-making. When openness and participation are part of your company culture, collaboration and idea sharing comes natural. A recent example is a group of 5 Belgian team members who took the initiative to re-design our workspace, even though this is not their regular day-to-day responsibility. 63

In today’s fast-changing society, the question arises if employers should play a more active role when it comes to taking care of the employees’ emotional health. The results of our latest Great Place to Work® survey highlight that employees struggle to disconnect from work and could benefit from extra support in recognizing stress signals and finding a better work-life balance (or should we say life balance as work is per definition part of life). As part of a new corporate FIT program we want to explore how we can provide employees with the necessary tools to build their mental capital and manage energy levels. Another pillar of this program will focus on a healthy workstyle, think healthy snacks and drinks at the office and initiatives to be more active throughout the working day.

IMPACT ON COMPANY HAPPINESS AND SUCCESS The main question for business leaders is of course if all these initiatives contribute to the success of an organization. In other words: 64

does this new approach lead to happier, more productive and engaged employees? Looking at the results of our latest Great Place to WorkÂŽ study, we have a strong indication that there is indeed a positive correlation. Over the past 3 years we have seen a positive evolution in the general satisfaction score: taking everything into account, 93% believe InSites Consulting is a great workplace, whereas in 2015 and 2016 percentages were at respectively 80% and 86%. 93% feel proud to be part of our team and 90% are willing to give extra to get the job done. There is a strong family feeling with 87% agreeing that we are all in this together. About 80% indicate wanting to work at InSites Consulting for a long time.

93% OF OUR EMPLOYEES BELIEVE INSITES CONSULTING IS A GREAT WORKPLACE

As mentioned there is no such thing as one road to happiness and the context in which a business operates (type of industry, local versus

global, company sizeâ&#x20AC;Ś) also determines the success of certain initiatives. Be critical in choosing the best approach for your business and

accept that trial and error is part of your journey towards a Millennialsand future-proof workplace.

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www.insites-consulting.com @InSites

illennials (born 1980-1996) are entering the workplace in

increasing numbers. Estimations say that four years from now, Millennials will make up 50% of the global workforce. Raised differently and in different times, Millennials are not like the previous generations, both in their attitude and in their approach towards work. The Millennials at Work paper will show you how to optimally capitalize on the Millennialsâ&#x20AC;&#x2122; talents and maximize their impact on business performance. Discover how & why Millennials are different and how companies can adapt their HR approach to become Millennial-proof.

ABOUT THE AUTHORS Joeri Van den Bergh is co-founder & NextGen/Millennials expert at InSites Consulting, Kristof De Wulf is CEO at InSites Consulting and Kim Verheyden is Employee Happiness Manager at InSites Consulting.

ABOUT INSITES CONSULTING From the start of InSites Consulting in 1997 until today, there has been only one constant: we are continuously pushing the boundaries of marketing research. With a team of academic visionaries, passionate marketers and research innovators, we empower people to create the future of brands. As one of the top 3 most innovative market research agencies in the world (GRIT), we help our clients connect with consumers all over the world.