Here's what the best companies for millennial employees do differently.
Six in 10 Millennials—the country’s largest generation—say they’re looking for new employment opportunities, according to a recent Gallup poll. The cost of that turnover is estimated to top $30 billion each year.
Many companies continue to ponder what to do about the issue. Some C-level leaders have responded by adopting lavish perks and a fun atmosphere to appeal to the younger generation.
Now, Great Place to Work’s research on the Best Workplaces for Millennials shows this generational penchant to job-hop is avoidable when companies focus on one key thing—building a high-trust culture.
“You might find some initial benefits to ditching your dress code and throwing out cubicles,”said Chinwe Onyeagoro, president of Great Place to Work.“But superficial changes like these won’t improve retention among Millennials unless they’re accompanied by managers making authentic connections with employees, linking their work and contributions to a broader purpose, providing access to a diverse array of learning and development opportunities, and demonstrating fairness in promotion and advancement decisions. These deeper leadership behaviors and cultural practices affect how Millennials feel about their place in the organization and how long they choose to stay.”
For decades, Great Place to Work has shown the immense impact that a high-trust culture has on employee experience across all generations. No matter their age, employees tend to be more productive and engaged when they feel pride in their work, experience camaraderie with teammates, and work in an environment defined by trusting relationships.
The difference with Millennials is the degree to which a high-trust culture impacts their experience and their intent to stay.
We found that Millennials who say they have a great place to work are 20 times more likely than peers who do not have that experience to plan to stay with the company (compared to 15 times for Gen X and nine times for Boomers). In stark contrast to the popular image of the constantly job-hunting Millennial, 85% of Millennial front-line employees and 89% of Millennial managers at the Best Workplaces said they intend to stay with their companies for a long time.
That 89% figure for Millennial managers is especially noteworthy. Unlike other generations, we found that Millennials tend to have less positive work experiences as they move up the ladder in an organization; Millennials in executive leadership roles not only reported lower scores than their Boomer and Gen X executive counterparts, they also fared worse than Millennials in front-line manager and department leader roles.
This trend plays out in turnover stats as well, with Millennial managers twice the flight risk as Boomer managers.
To solve this retention problem, the best companies look beyond trend-of-the-day perks and consider how to connect Millennials to the deeper meaning in their work. Our research shows that Millennials who found “special meaning” in their work were six times more likely to plan to stay at their workplaces.
But what does that mean for organizations without obvious social missions? Are certain industries at an inherent disadvantage in competing for and retaining the best Millennial talent?
In studying the Best Workplaces for Millennials, we found leading employers use different “meaning archetypes” to help employees connect to their work and feel part of something significant. For example, they might identify as an industry disruptor that inspires innovation, or declare giving back a key part of their organizational culture. Others honed in on their service-oriented focus, their unwavering team support for employees in times of need, or their reputation as industry leaders offering superior products and expertise.
Across all these archetypes, employers we studied focused on helping align the employee’s personal values and the organization’s work. This approach turns work into an opportunity for employees to meaningfully express who they are as individuals—or even an opportunity for their organizations to help them become the person they want to be.
And while some of these archetypes easily lend themselves to a particular industry, outstanding companies aren’t relying on a single avenue to meaning. Instead, they combine several archetypes to ensure as many employees as possible can find meaning in the workplace.
This strategy doesn’t work without clear communication and a true commitment from leadership. Inconsistency between an organization’s stated and lived values will immediately undermine its leaders’ trustworthiness. Millennials are especially sensitive to authenticity.
But when company leaders do make the effort to connect with team members on a personal level, the results are astounding: Millennials who said managers take a sincere interest in them as people, and not just as employees, were eight times more likely to report workplace traits linked to innovation and organizational resilience.
That’s one reason Ultimate Software, the No. 1 company on the Best Workplaces for Millennials list, flies every new employee to its Florida headquarters for a two-day orientation that includes a chance to meet the CEO. When they return, new hires plug in to a custom social network that not only shares company news but also connects co-workers to groups formed around shared hobbies and professional pursuits.
“Millennials have a fraught reputation in the workplace,” said Onyeagoro. “Yet the main generational difference boils down to higher expectations for the level of personal fulfillment and connection they want from work. Employers that work to meet those demands by building a high-trust culture, with a special focus on Millennials in leadership roles, will get ahead in both the talent game and in the marketplace.”
There are more than 75 million Millennials in America, all working age. The leading employers among this generation have not only cracked the code on how to engage Millennial workers—they’re finding effective ways to sustain those results as Millennials move into leadership roles. And that’s the key to future business success.
Kim Peters and Sarah Lewis-Kulin are Executive Vice President and Vice President, respectively, at Great Place to Work, the longtime research partner for FORTUNE’s annual list of the 100 Best Companies to Work For and other Best Workplaces lists, including the Best Workplaces for Millennials.