HR managers must adapt to millennials' values to reduce turnover

Generation Y is on the verge of becoming the dominant generation of the global workforce. As a result, HR professionals are increasingly recognizing that new solutions are needed to meet the challenges this cohort brings to the recruitment and retention process. 

Those born between 1982 and 2000 (also commonly referred to as Millennials) offer a highly desirable set of skills to employers: they’re tech-savvy, optimistic, inclusive, civic-minded, hard-working, entrepreneurial and the most highly educated generation of all. However, they also have low levels of loyalty and the highest turnover rates on record. 

Millennial employees have high levels of dissatisfaction with entry-level jobs and value their independence and work-life balance

To help HR managers create environments where Gen Y employees are more likely to stay long-term, Rueff-Lopes, professor in the Esade Master in International Management, Ferran Velasco (EADA), Esade’s Associate Professor Josep Sayeras and Ana Junça-Silva (ISCTE-Instituto Universitario de Lisboa), have examined the value system of Gen Y workers and their attitudes towards commitment. 

The research, published in Personnel Review, has important practical implications for HR professionals and offers useful predictors of turnover in Generation Y workers. 

A generation that knows its worth

They’re highly educated, highly skilled, highly sought after — and they know it. Generation Y graduate employees want to work at the best possible companies in the best possible conditions, and if their expectations aren’t met, they’ll simply move on. 

Millennial employees have high levels of dissatisfaction with entry-level jobs and value their independence and work-life balance over long hours. Given the choice, one in four Generation Y workers say they would leave a position after the first year to try a new organization or move to a different area. According to research from Deloitte, only 16 percent say they would be happy to stay with the same company for a decade. 

With 75 percent of the global workforce being made up of Generation Y by 2025, the resulting turnover costs will be significant. And for HR professionals whose processes and procedures are rooted in the loyal principles of Baby Boomers and Gen X, the stark differences in attitudes and values require a strategic rethink. 

Exploring Gen Y values and turnover intentions

To delve into this phenomenon and find out more about the relationship between the values’ system of Generation Y to job turnover, the researchers set out to pursue three objectives: identify the work-related values of Gen Y; explore the relation between values and turnover intentions and examine how the field of study influences this relationship; and to follow-up after a year at work to verify the reported intentions. 

The team interviewed 71 master's program graduates from a leading European business school to take part in their study. They were all early-career workers who were completing their 1st year at their first job. All graduates were from six fields of business studies: business analytics, finance, innovation and entrepreneurship, management, marketing and sustainability. 

Opportunities for networking, personal development and external benefits played a huge role in turnover intentions

Each participant took part in three in-depth interviews that included sociodemographic questions, open questions about their work life since graduation, what they valued in their jobs, and their intentions to look for another job in the short term (1 year). Drawing on their answers, eleven work-value categories were created, such as autonomy, company culture, financial rewards or networking opportunities, among others. Decision trees were used to identify the groups of categories that better predicted turnover intentions. 

Offer opportunities to reduce churn

Overall, 60.5 percent of respondents said they would consider leaving their jobs in the near future. However, the opportunities for networking, personal development and external benefits played a huge role in turnover intentions. 

For finance graduates specifically, 64.7 percent said they would look for a new role. However, if no competence development was provided, all participants said they would leave their job. If both networking and competence development were provided, 100 percent said they would stay. Thus, the dealmaker is a combination of networking opportunities and competence development, while the dealbreaker appears to be the lack of opportunities for developing competence. 

The overall figure for innovation and entrepreneur graduates who intended to leave their roles was slightly lower at 57.1 percent. When autonomy in their jobs was present, only 20 percent said they intended to leave. These students were also heavily influenced by the associated outside-the-job benefits. If no benefits were available, 73.3 percent said they would leave. Besides the retention power of outside-the-job benefits, the researchers found another dealmaker. When available human and material resources to perform their job were introduced in addition to autonomy, 100 percent committed to staying in their role. 

Long-term implications

When the participants were followed up after a year, the proportion of those who had left their job was significantly higher among people who had expressed intentions to leave, at 52 percent, with only 20 percent of those who said they intended to stay leaving after a year. 

The findings, say the researchers, emphasize the need for employers to understand the work-related values of their Gen Y employees. And as well as recognizing the individual factors that persuade people to stay or go - such as culture, access to benefits and opportunities for progression - retention strategies should focus on the meaning and impact of jobs. Additionally, future research should replicate this study with Generation Z workers who are just joining the current workforce. 

Offering opportunities that are in line with individual values, regular feedback and recognition regarding progress, ensuring the impact of the role on the business is highly visible, and regular ongoing discussions are all essential strategies for reducing Gen Y turnover.