How employers can engage with generation y

Engaging generation Y
Money will not buy love from the next wave of talent
Written by The Economist Intelligence Unit

W

ith unemployment on the wane in the UK, the balance
of power in the employment market is shifting. As the
number of vacancies grows, competition for the top talent is
sure to intensify.
But when it comes to hiring the stars of the younger generation,
businesses may soon find that their traditional lures, such as salary and
equipment, may no longer hold their appeal.
This is confirmed by António Horta-Osório, chief executive of Lloyds
Banking Group, who acknowledges that in the wake of the financial
crisis his industry will have a tough time securing the finest minds
of a generation.
A survey by Lloyds found that 28% of students would be too embarrassed
to tell friends that they were going to work for a bank, 41% distrust
financial institutions, and 56% trust banks less than they did five
years ago.
“We want the best and the brightest to see banking as a credible career
choice,” Mr Horta-Osório says, but because of the reputational impact
of the credit crunch, the next generation is more likely to choose a
career in the public sector than in financial services.
The banking sector is at the sharp end of a trend that will affect any
organisation seeking to attract young talent. Increasingly, young
workers are looking for employers who offer less tangible but more
meaningful benefits.

Money will always hold a certain appeal, but according to Peter

Thomson, visiting executive fellow at Henley Business School and coauthor of Future Work, even high salaries do not have the same draw
they once did.
“These tend to be seen as bribery, particularly in financial services,”
he says. “Banks might pay a lot of money, but they expect long hours,
and people recognise they are being paid to give up their private lives.”
Instead, Mr Thomson says, young people want more control over their
working lives.
That means being measured by results and rewarded for thinking up
smart new ways of doing things, not for when or where they get the
job done, Mr Thomson says. “They expect to have choice and to be
empowered to make decisions.”
Companies putting this into action include online video streaming
service Netflix, which allows employee not only to choose their own
hours, but even lets them decide how many holidays they take.
Consumer goods giant Unilever, meanwhile, plans to make 30% of job
roles “location-free” by 2015, reducing the amount of office space
needed, saving money and enabling expansion without increasing its
carbon footprint – another way to appeal to Generation Y.
Organisations that are flexible and give employees time out to travel
are much more likely to keep them than those who try to restrict people
to one location for years, says Michael Jenkins, chief executive of
Roffey Park, a charitable trust that helps people achieve their potential
at work.
“It’s enlightened self-interest, because the employee will probably
come back more useful in the long term.”
Another important motivator is the ability to expand one’s skills and
try new things. Online grocery retailer Ocado recently tapped into
this with what it calls “a guerrilla recruitment campaign” to attract
technology people with skills such as robotics and simulation.
It is encouraging them to “think big and experiment”, and letting them

see the fruits of their efforts within two hours, rather than two months,
as is usually the case.

A sense of purpose
As Mr Horta-Osório’s remarks reveal, young recruits are sensitive to an
organisation’s purpose and mission.
According to Lesley Uren, a talent management expert at PA
Consulting, applicants are more likely to be attracted by employers who
have a good reputation and espouse corporate values in line with their
own. “Organisations need to think more about what they stand for and
clarify this,” she says.
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To win immediate loyalty from recruits, Ken Lever, chief executive of
UK-based Xchanging, a technology services company, talks to the
annual graduate intake on their first day. Within 24 hours they fly to
Xchanging’s office in Shimoga, India, where “buddy” counterparts help
them build cross-cultural relationships.
The recruits also spend time in an elephant sanctuary and eye hospital
that the company supports. Each graduate has a board-level mentor
who helps promote them internally.
To summarise, Mr Jenkins says that people are motivated by being in
alignment with the purpose of the organisation, having autonomy and
freedom to explore areas outside their main job, and being able to
shine among their peer group and become really good at what they do.
These factors will become increasingly important as the new generation
enters the workplace, he adds.
This may present a challenge to a generation of managers, currently
doing the recruiting, who have been trained to focus on more tangible

objectives. Many industry leaders have risen to power and influence
by virtue of their technical, scientific, legal or accounting knowledge,
Mr Jenkins says. “They’ve not had the opportunity to understand what
makes people tick from an emotional point of view.”

Any change in mind-set will need to begin early. Business schools, says
Mr Jenkins, see their main function as creating people who think driving
shareholder value is the be-all and end-all. Roffey Park’s research has
shown that companies with this view will not motivate people in the
long term, because once they have achieved it, the pressure is to keep
on delivering more of the same.
This can make them take risks and eventually burn out, says Mr Jenkins.
“The financial sector has shown what happens when people are pushed
too far.”