Employee Retention is Going to Take More than Perks
Whether they are truly unaware or just indifferent, most employers at tech companies today are simply not meeting the needs of millennials. While they are busy force-feeding and pampering their employees with snacks and beer taps, employers are overlooking the key millennial motivation – the one that makes them wander-out after two years: their own growth.
Almost more than anything, growth is vital to employee retention and satisfaction. In fact, together with monetary compensation, opportunities to progress and professional development training programs are among the things that influence millennials’ choice of work the most.
In a survey commissioned by PwC, 52% of the participants (all under the age of 31) said that opportunities for career growth are the most attractive thing about an organization, and 65% said that opportunity for personal growth affected their decision to accept their current position.
Also, according to Deloitte, the opportunity for career progression is “the number-one priority in Argentina, Peru, Mexico, India, Colombia, South Africa, and China”. We’re looking at a worldwide phenomenon here. It’s not just the tech industry, it’s millennials everywhere who are looking for an alternative to the existing employment system.
To reassure this, we’ve commissioned our own survey at Jolt. We asked 500 millennial tech employees in California about their place of work. More than 47% said their employer spends too much on perks, fancy office space and facilities, while only 6.6% said perks were a major consideration in choosing their current employer.
This may sound intuitive at first, but still if you step into a classic tech company or startup in Silicon Valley, Helsinki or Tel Aviv – Beers, yoga classes, high-end toys and pool tables is what you’ll most likely see first. This type of prioritizing might be ok when funds are infinite (like it is for some online gaming companies, for instance), but sounds just plain-stupid when 80% of employees say the training they receive doesn’t meet their needs and goals.
Do these companies accidentally prioritize waffles and beers over training and development? Where did we go wrong?
This spending spree doesn’t stop at the open bar. According to Business Insider, companies like Buffer, Weebly or WelnessFX spend hundreds of thousands of dollars on perks each year, while larger companies like Dropbox reach a staggering $38 million a year. And the worst part is that HR now thinks this is a way to attract employees – stating “free unlimited snacks” or “beer taps” on their career site as a way to attract the best talent.
Optimizing the wrong metric
Why are these companies wasting so much of their valuable resources on perks? Well, for one thing, when 91 percent of millennial employees say they don’t expect to hold a job for more than 3 years, some employers feel like they have to do something to increase their employee retention metrics. For many, building a golden cage is the easiest solution for keeping employees in.
But is RETENTION even the right metric? Is “keeping employees in place” the best way to leverage the best talent?
This frenzy is getting worse by the day as the competition over talent gets more and more brutal. For companies who are looking for an edge, it’s time to reconsider what is it exactly that millennials want.
Millennials are looking for professional growth.
Times change, people change, but today’s employment system remained nearly the same.
Here’s the problem: Our most basic employment market concepts are based on methodologies built to cater to the industrial revolution. In a production-line world, what companies needed were production-line workers with a clear stationary position. Place holders who can do the same predictable job over and over again.
To achieve these kind of disposable workers all that was needed was a production-line education system. People in this system were taught to invest their energy into learning the job once – and then let go, just like a slingshot. Do and repeat, says the system. Above all, don’t change. Don’t be creative. The cubicle of despair that is your eternal home cannot cope with change. There’s a reason we’ve been calling having a job “holding a position” for the last 150 years: it’s optimized for getting you there and keeping you in place.
Today we have a different picture. With industries changing faster than ever before, not keeping up with them often means becoming irrelevant. For employees and companies, alike. Innovation requires new blood; fresh thoughts and ideas; shaking the ground and changing key assumptions. It requires what corporations always hated the most: change. And a lot of it, all the time. By optimizing for employee retention – companies are actually slowly killing themselves and their employees’ careers.
The core assumption underlying the current employment methodology is this: NOTHING CHANGES. Do the same things over and over again, and when you’re competent enough – you might be promoted to overseeing people who do the same job you did. For this concept – retention is everything. You’ve invested SO MUCH in your team – now keep it in place.
But in a world where planes can fly and cars can drive themselves, in a world with VR and 3D printing and, oh, yeah, the Internet – this key assumption, that work stays the same and the people progress on a linear path – is 100% irrelevant.
The market, we know by now, changes exponentially. We can’t expect anything to stay the same. We should expect everything to change, and while we can hardly expect people will grow as fast as their jobs, we at least owe it a shot.
Let’s face it, in a world that is centered around change, the true need of millennials is not expensive perks or a steady job they can hold for the rest of their lives. What they need is continuous professional growth.
As we leave the factory-like employment system behind us we can no longer accept learning to be a one-size fits all. This is what tech companies often fail to see. It’s not about getting the best talent and then keeping it in the office for as long as possible. It’s about getting the best talent and keeping it best. It’s about providing both the employee and the company the chance to grow, change, and seize opportunities – giving it a better shot in its race to keep up.
As millennials take over the workforce, the time has come for tech CEOs to join the discussion about the future of work and how millennials fit into it. Consider this for a start: instead of bribing them with food and gadgets, consider catering to their actual needs.
Grow them for as long as they’re yours, and then let them go
As AT&T CEO and Chair Randall Stephenson recently said to the New York Times, “There is a need to retool yourself, and you should not expect to stop…. People who do not spend five to 10 hours a week in online learning will obsolete themselves with the technology” (4).
Learning once and then repeating doesn’t cut it anymore. Especially in the tech world, to acquire any set of skills and not expect them to get dusty over 3 years or sometimes 3 months is just playing naïve. The solution to keeping ahead includes circulating people faster, and pushing teams towards ongoing learning and development.
It’s what our teams now need more than anything; integrating learning into work itself.
San Francisco, CARoei Deutsch is the CEO and cofounder of JOLT, a marketplace for live talks given by professionals to teams who wish to keep up to speed with rapid market changes. He founded and sold his first company at the age of 15 and by the age of 18, Served as new-media consultant for a number of media corporations, including Fox International Channels and others. Roei also served as the CEO of Veribo and led the rise of one of the most prominent Israeli political party today through digital campaigns in the last two election cycles.