How Will The 2020 Workforce Affect Your Total Rewards Programs?

HR Strategies Consulting - HR Technology

In order to attract, motivate, retain and engage Millennial employees, it is important that your company does their due diligence to educate and communicate, both to employees and recruits, about the benefits of working with you.

34% of companies surveyed by Oxford Economics are doing this well. They reported that they were making significant progress towards meeting their future workforce goals. Where that’s good for some, that leaves a lot of room for improvement. 

Let’s take a look at how the Millennial shift might affect your total rewards programs.

The total rewards model encompasses six components — compensation, benefits, work-life effectiveness, recognition, performance management, and talent development    

Here we will break them down and outline what Millennials are looking for under each element.

Compensation:

Millennials are motivated by wages, but it isn’t their primary factor for working with a company. Second on the list of things that make an employer is attractive, to a Millennial, is competitive wages and financial incentives. When Millennials were surveyed they said that the starting wage or rate of pay was only a factor 21% of the time in influencing their decision to accept their current position.

Statistics show, however, that Millennials need at least $79,000USD to afford the lifestyle they want and this only increases as they get older. In order to offset the cost of some of these starter positions, companies need to look at other aspects of their total rewards program.

Benefits:

According to the PWC Millenials at Work Report, millennials only care about benefits after their basic compensation needs are met. Only 4% said they would rather higher pay than no benefits.

Millennials are very family oriented. They want benefits and perks that directly impact their lives and the lives of their family members and they want the option to choose what is important to them. Benefits can encompass everything from health-related benefits, to wellness related benefits, as well as any other employee perks you may offer.

In order to stay competitive, some employers are even offering financial wellness programs that include benefits such as student loan repayment programs.

Work-Life Effectiveness:

Perhaps one of the harder areas to express are the intangibles such as quality of life and work-life balance. 21% of Millennials desire flexible working arrangements. While 95% say that work-life balance is important to them.

Millennials, aged 18-38 are entering a stage of life that they are marrying, buying homes, and having children. Older Millennials are having to manage to sustain the life they built while moving up the corporate ladder.

Anything that will help a Millennial achieve this work-life balance, or increase their quality of life will be seen as a benefit.

Recognition:

When creating reward programs for Millennials, you need them to reflect your company’s culture and values. Company culture is important to Millennials. They want to work with companies who are:

  • Collaborative
  • Positive
  • Clear in expressing goals
  • Green / Socially responsible
  • Flexible
  • Advanced in technology
  • Innovative

Millennial employees want to be heard and involved in decisions. Developing a program that allows Millennials to give you their feedback and ideas regularly can assure Millennial employees have a voice.

One of the strongest Millennial traits is that they welcome and expect detailed, regular feedback and praise for a job well done. Immediate performance feedback is desired by Millennials and they want it to go both ways! They want to hear your feedback and they want to give their feedback. 

Performance Management:

Because Millennials prefer more frequent communication over annual reviews, it is important to keep the lines of communication between employee and manager open. Modern performance management software incorporates a Millennials need for feedback and communication by providing a social media-like platform. It’s a worthwhile investment for many organizations. 

Another important aspect of performance management is coaching and leadership development. If these are already aspects of your culture it is important to encourage these relationships with Millennials as Millennials will leave an organization when they don’t see enough opportunity for leadership development or if they feel the organization is neglecting to improve their skills.

Talent development:

28% of employers said they are worried about a lack of skilled talent entering the workforce. Good news is that Millennials love to learn. The overall skill gap and need for learning opportunities can be managed with the inclusion of a training program.

Millennials expect to keep on learning as they enter the workplace.  35% of Millennials were attracted to employers who offer training and development programs. They see it as the top benefit an employer can offer to them.

Millennials want to know you are invested in them, not only as an employee but as a person. They want to see that they bring value to a company. What we have seen is that 91% of Millennials say they want to stay with a company for 3 years or more, but in reality, they are only devoting 12-18 months with a company.

This highlights a need for companies to invest in designing a training program to not only to support talent development and shorten the skill gap but to also to support your attraction, engagement, and retention of your Millennial workforce.

Conclusion

By re-defining your Total Rewards Program you will be able to empower Millennials to be able to work in the pace, style, and environment that’s most conducive to them producing the best results. Millennials want to bring value to a company, we need them to because by 2020 they will be 75% of our workforce.

If you need help assessing, designing and developing a total rewards plan and strategy that aligns with the goals and strategies of your organization give us a call.

Terri Joosten
Global VP Business Development
HR Strategies Consulting Inc.
905 886 2097
Book a call https://calendly.com/tjoosten

 

Download some of the resources we mentioned:

Watch the Webcast

 

 Workforce 2020: The Engagement Paradigm 

By the year 2020 75% of our workforce will be Millennials.  What are you doing to attract, engage and retain your staff and prepare for the millennial shift? 

Crafting strategies for the 2020 workforce is no small task. Learn more about this paradigm in a webcast hosted by Terri Joosten,  Global VP Business Development at HR Strategies Consulting