Millennial Engagement- Positives on productivity
Recent labour productivity figures released by Forbes and the OECD showed Ireland as number one in the world. The numbers show that every person who works here generates significantly more value than the EU norm. This runs counter to the notion that tax incentives are the main reason for foreign direct investment (FDI) in Ireland. Ireland relies a lot on FDI and high labour productivity is currently a more relevant factor than lower corporate taxation. Consequently, this factor should be protected and propagated. But we risk losing this advantage in an environment where employee attitudes are changing and labour turnover increases.
Attitudes changing and challenges
New generation employees value health and wellness, social responsibility and flexibility. We see people ready to glue themselves to aircraft in protest at how our environmental agenda is mismanaged. Young employees are showing that they will not accept to remain in jobs where core values are undermined and they do not feel appreciated. Recently the government have fielded concerns from unions on employees’ “right to disconnect”. Employers have much to do.
Attitudes among younger generations are evolving and they don’t have traditional expectations. They expect much more, and we need to understand these differences. Such understanding must be used to help build continuity in the workforce. Young people are certainly more aware of their responsibility to the environment. Global demonstrations around climate change, pioneered by Swedish schoolgirl Greta Thunberg, show the steps they are ready to take to save our planet. Extinction rebellion protests are adding fuel to this fire, with a strong showing in Dublin last month. Young people are evaluating the company employing them with new eyes and values are important to them. Indeed, it might be suggested that millennials with a big external idea – an idealistic frame of mind – may find everyday work mundane and unrewarding. And millennials will make up 75% of the workforce by 2030.
The cost of turnover
As Ireland nears full employment, considerable efforts must be taken to ensure that employees have stability in their careers while companies have a stable workforce. Turnover of skilled employees is a serious impediment to businesses as they try to grow profitably. This year, the Work Institute in the US released the “Retention Report”, which used data from 234 thousand exit interviews. It determined that while one in four left their jobs in 2018, 77% could have been prevented by employers being more proactive.
In Ireland, Adare Human Resource Management has estimated Irish staff turnover at half of this US example through the same period. Doubling to US levels could be a drastic potential drain. Cost estimates of employee turnover are broad but with CSO figures showing the cost of labour at €83 billion and an average salary of €39k in 2018, doubling turnover would be a heavy weight for business. As Ireland approaches full employment, employers will struggle to retain skilled employees. Competition will force labour costs upwards.
Imperatives for engagement
In the future, successful companies will manage their costs and skill base through engagement with employees. Millennial employees need to feel part of the journey. Such engagement helps avoid the cost and complexity of employee turnover. Employee engagement is the norm for benchmark organisations, using the “Best Place to Work” scheme or other engagement platforms like that of the Gallup organisation. The main steps a company needs to address include
- Vision and values of the company are clearly understood by all employees.
- People know what is expected of them as part of this journey.
- Validate with them that they have the tools and equipment needed to do their work effectively.
- People can feedback on issues and blockages to progress in a neutral, which is regularly maintained.
- People get regular feedback on what’s going well and what needs improvement in a constructive way. This should feed into their individual development or career management program.
These basics are not always performed well in companies, but it’s particularly important for our indigenous industry base. To compete with the multinationals, who have big pockets, these important basics must be looked after. Millennial employees may think differently and communicate differently but the end remains the same. They will stay with companies that show an interest in building a future for them.