Editor’s note: This article originally appeared in the May 28, 2007, issue of Fortune.
Nearly every businessperson over 30 has done it: sat in his office after a staff meeting and—reflecting upon the 25-year-old colleague with two tattoos, a piercing, no watch, and a shameless propensity for chatting up the boss—wondered, What is with that guy?!
We all know the type: He’s a sartorial Ryan Seacrest, a developmental Ferris Bueller, a professional Carlton Banks. (Not up on twentysomethings’ media icons? That’s the American Idol host, the truant Matthew Broderick movie hero, and the overeager Will Smith sidekick in Fresh Prince of Bel-Air.) At once a hipster and a climber, he is all nonchalance and expectation. He is new, he is annoying, and he and his female counterparts are invading corporate offices across America.
Generation Y: Its members are different in many respects, from their upbringing to their politics. But it might be their effect on the workplace that makes them truly noteworthy—more so than other generations of twentysomethings that writers have been collectively profiling since time immemorial. They’re ambitious, they’re demanding, and they question everything, so if there isn’t a good reason for that long commute or late night, don’t expect them to do it. When it comes to loyalty, the companies they work for are last on their list-behind their families, their friends, their communities, their coworkers, and, of course, themselves. But there are a whole lot of them. And as the baby-boomers begin to retire, triggering a ballyhooed worker shortage, businesses are realizing that they may have no choice but to accommodate these curious Gen Y creatures. Especially because if they don’t, the creatures will simply go home to their parents, who in all likelihood will welcome them back.
Some 64 million skilled workers will be able to retire by the end of this decade, according to the Conference Board, and companies will need to go the extra mile to replace them, even if it means putting up with some outsized expectations. There is a precedent for this: In April 1969, FORTUNE wrote, “Because the demand for their services so greatly exceeds the supply, young graduates are in a strong position to dictate terms to their prospective employers. Young employees are demanding that they be given productive tasks to do from the first day of work, and that the people they work for notice and react to their performance.” Those were the early baby-boomers, and—with their ’60s sensibility and navel-gazing—they left their mark on just about every institution they passed through. Now come their children, to confound them. The kids—self-absorbed, gregarious, multitasking, loud, optimistic, pierced—are exactly what the boomers raised them to be, and now they’re being themselves all over the business world.
It’s going to be great.
“This is the most high-maintenance workforce in the history of the world,” says Bruce Tulgan, the founder of leading generational-research firm RainmakerThinking. “The good news is they’re also going to be the most high-performing workforce in the history of the world. They walk in with more information in their heads, more information at their fingertips—and, sure, they have high expectations, but they have the highest expectations first and foremost for themselves.”
So just who is this fair bird?
Boomers, know this: You are outnumbered. There are 78.5 million of you, according to Census Bureau figures, and 79.8 million members of Gen Y (for our purposes, those born between 1977 and 1995). And the new generation shares more than just an age bracket. While it may be crass to “define” such a group, any Times Square tourist could probably do so with one finger—pointed at the MTV Networks building. Gen Y sometimes seems to share one overstimulated brain, and it’s often tuned to something featuring Lindsay Lohan. Add to that the speed with which Yers can find Lindsay Lohan–day or night, video or audio–in these technology-rich times, and it’s suddenly not so strange that Gen Y has developed such a distinct profile.
“This is the most high-maintenance workforce in the history of the world. The good news is they’re also going to be the most high-performing.”
And what a profile it is. As the rest of the nation agonizes over obesity, Gen Yers always seem to be at the gym. More than a third of 18- to 25-year-olds surveyed by the Pew Research Center for the People and the Press have a tattoo, and 30% have a piercing somewhere besides their earlobe. But those are considered stylish, not rebellious. And speaking of fashion, this isn’t a group you’ll catch in flannel. They’re all about quiet kitsch—a funky T-shirt under a blazer, artsy jewelry, silly socks—small statements that won’t cause trouble. The most important decorations, though, are electronic—Pods, BlackBerrys, laptops—and they’re like extra limbs. Nothing is more hilarious than catching a Gen Yer in public without one of those essentials. Let’s just say most wouldn’t have lasted long on Walden Pond.
When it comes to Gen Y’s intangible characteristics, the lexicon is less than flattering. Try “needy,” “entitled.” Despite a consensus that they’re not slackers, there is a suspicion that they’ve avoided that moniker only by creating enough commotion to distract from the fact that they’re really not that into “work.” Never mind that they often need an entire team–and a couple of cheerleaders-to do anything. For some of them the concept “work ethic” needs rethinking. “I had a conversation with the CFO of a big company in New York,” says Tamara Erickson, co-author of the 2006 book WorkforceCrisis,“and he said, ‘I can’t find anyone to hire who’s willing to work 60 hours a week. Can you talk to them?’ And I said, ‘Why don’t I start by talking to you? What they’re really telling you is that they’re sorry it takes you so long to get your work done.'”
That isn’t the only rethinking Gen Yers have done. Their widespread consumption of uniform media has had some positive effects. Girls watch sports and play video games, and no one thinks twice about it. And boys can admit to loving The Real World with impunity. Race is even less of an issue for Gen Yers, not just because they’re generally accustomed to diversity, but because on any given night they can watch successful mainstream shows featuring everyone from the Oscar-winning rap group Three 6 Mafia to wrestler Hulk Hogan. It all makes for a universe where anything–such as, say, being a bodybuilding accountant–seems possible.
Of course, Gen Yers have been told since they were toddlers that they can be anything they can imagine. It’s an idea they clung to as they grew up and as their outlook was shaken by the Columbine shootings and 9/11. More than the nuclear threat of their parents’ day, those attacks were immediate, potentially personal, and completely unpredictable. And each new clip of Al Gore spreading inconvenient truths or of polar bears drowning from lack of ice told Gen Yers they were not promised a healthy, happy tomorrow. So they’re determined to live their best lives now.
From the moment Gen Yers were born, long before technology or world events affected their lives, they were dealing with a phenomenon previously unknown to man: the baby-boomer parent. Raised by “traditionalists” after World War II, the boomers, once they had children of their own, did exactly the opposite of what their parents had done, cooing and coddling like crazy. Couple all that affection with the affluence of the ’80s and ’90s, throw in working parents ‘guilt, and boomers’ children not only got what they wanted but also became the center of their parents’ lives. Self-esteem was in, spanking was out, and coaching–be it for a soccer team or a kindergarten interview–was everywhere. Affirmation continued as they grew, and when they spoke up, their opinions were not only entertained but celebrated. Overscheduled grade-schoolers became overcommitted teens, with the emphasis on achieving. The goal was to get into a great college, which would lead to a great career and a great life.
But there was a hitch. Upon graduation, it turned out that a lot of Gen Yers hadn’t learned much about struggle or sacrifice. As the first of them began to graduate from college in the late 1990s, the average educational debt soared to over $19,000 for new grads, and many Yers went to the only place they knew they’d be safe: home. Lots haven’t left. A survey of college graduates from 2000 to 2006 by Experience Inc. found that 58% of those polled had moved horne after school and that 32% stayed more than a year. Even among those who’ve managed to stay away, Pew found that 73% of 18-to 25-year-olds have received financial assistance from their parents in the past year, and 64% have even gotten help with errands.
It’s what Jeffrey Jensen Arnett calls “emerging adulthood” in his 2004 book of the same name . “People think very differently about their 20s now,” the Clark University research professor says. “It’s so volatile and so unfettered and so very unstructured. Nothing has ever existed like it before.” For example, in 1960 the median age at marriage was 20 for women and 23 for men. Today it’s 26 for women and 28 for men. In sociological terms that’s a revolution.
And though Gen Yers will eventually have to grow up–like all of us, they’ll lose their parents, face layoffs, and suffer insane bosses (see next story)–they are stretching the transition to adulthood well into their 20s. “If we don’t like a job, we quit,” says Jason Ryan Dorsey, the 28-year-old author of 2001’s My Reality Check Bounced!, “because the worst thing that can happen is that we move back home. There’s no stigma, and many of us grew up with both parents working, so our moms would love nothing more than to cook our favorite meatloaf.” It’s a position borne out by the numbers; 73% of Pew’s respondents said they see their parents at least once a week, and half do so daily, a fact that, however sweet, sort of makes you want to download Rebel Without a Cause.
“If we don’t like a job, we quit, because the worst thing that can happen is that we move back home. There’s no stigma.”
With this level of parental involvement, it’s a miracle that Gen Yers can do anything on their own. “It’s difficult to start making decisions when you haven’t been making decisions your whole life,” says Mitchell Marks, an organizational psychologist and president of consulting firm Joining Forces. He points to one of his recent projects at a software development company. His client, which had one health-care plan, was acquired by a bigger firm that offered five more. “The twentysomething software developers were up in arms about having to choose,” Marks says. “That was their No.1 issue-not ‘Will I lose my job?’ or ‘Will there be a culture clash?’ but this-because they were just so put off that they were put in what they viewed as a very stressful situation.” One can’t help but wonder how stressed they’d be with no health insurance at all. But even for the Gen Yers who try in earnest to succeed, Marks says, the way they’ve been raised can still be detrimental: “They’ve been made to feel so special, and that is totally counter to the whole concept of corporations.”
What, then, is a Fortune 500 company to do?
Gen Yers still respond most of all to money. There’s no fooling them about it; they’re so connected that it’s not unusual for them to know what every major company in a given field is offering. And they don’t want to be given short shrift—hence the frightening tales of 22-year-olds making six-figure salary requests for their first jobs. One could chalk that up to their materialism and party-people mentality, but author Erickson has a different take. “They have to get some money flowing because they have a lot of debt to pay,” she says.
To get noticed by Gen Yers, a company also has to have what they call a “vision.” They aren’t impressed by mission statements, but they are looking for attributes that indicate shared values: affinity groups, flat hierarchies, divestment from the more notorious dictatorial regimes. At Halleland, which was founded in 1996 by defectors from a larger firm, offices are all the same size, new associates are encouraged to pass work up the chain, and senior partners send out e-mails congratulating junior staffers on career milestones. In 11 years Halleland has lost just five associates to other outfits.
It hasn’t hurt that the firm emphasizes work-life balance. While Gen Yers will work a 60-hour week if they have to–and might even do so happily if they’re paid enough to make the most of their precious downtime–they don’t want that to be a way of life. Some firms where long hours are the norm have found ways to compensate. At Skadden Arps, new employees are reimbursed up to $3,000 for home-office equipment and $1,000 every year after. And the firm’s gyms are a big hit with Gen Yers. “You’d be amazed, when people come by to interview or check out the firm, what a warm response the fitness center gets,” says Wallace Schwartz, who leads the firm’s New York office.
Watching public accounting firms scout for talent is especially instructive, since they have had to staff up after Sarbanes-Oxley. At Ernst & Young, recruiters hand out flash drives instead of brochures, send text messages to schedule meetings with candidates, and give interns videocameras to create vlogs for the first corporate-sponsored recruiting page on Facebook to meet Gen Yers on their own turf. “That was a difficult sell,” says Dan Black, who heads E&Y’s college recruiting for the U.S. and Canada, “to be in a medium where you don’t have control and people can post some not-so-nice things and you’re going to leave it up there, which we do.” It was so far ahead of its time that even the kids got thrown off. At one point Black wanted to quote some vivid comments a junior staffer had posted on the page. He left him a voicemail asking for a call back. The next thing Black knew, the posts had all vanished. “He thought he was in trouble!” Black says, howling. “So they’re learning how to work with us too.”
But as any worthy suitor knows, in the end the key to courtship lies at home-in wooing Mom and Dad. For Merrill Lynch, getting young people to commit wasn’t much trouble before. “In the past, if we gave you an offer, you accepted,” says Liz Wamai, who heads diversity for Merrill’s institutional business. “It was Merrill Lynch. Now it’s sell, sell, sell.” The company holds a parents’ day for interns’ families to tour the trading floor. But it’s involving parents in recruiting that’s been a real shift. Subha Barry, global head of diversity, recalls running into a colleague having lunch with a potential summer recruit and someone she didn’t know. It turned out to be the boy’s mother. “If somebody would have said to me, ‘You’re interviewing for a job somewhere, and you’re going to bring your mother to the closing, decision-making lunch,’ I would’ve said, ‘You’ve got to be crazy,'” she says, wagging a finger. “But I tell you, his mother was sold. And that boy will end up at Merrill next summer. I can guarantee that.”
No one joins a company hoping to do the same job forever. But these days even your neighborhood bartender or barista aspires to own the place someday. What’s more, the ties that have bound members of this age group to jobs in the past–spouse, kids, mortgage–are today often little more than glimmers in their parents’ eyes. So if getting Gen Yers to join a company is a challenge, getting them to stay is even harder. The key is the same one their parents have used their whole lives—loving, encouraging, and rewarding them. What that amounts to in corporate terms is a support network, work that challenges more than it bores, and feedback. “The loyaltyof twenty- somethings is really based on the relationships they have with those directly above them,” says Dorsey, the Reality Check author. “There’s a perception among management that those relationships shouldn’t be too personal, but that’s how we know they care about us.”
Dorsey-who in true Gen Y style dropped out of college to write an earlier book, Graduate to Your Perfect Job, without having either graduated or gotten a job-recommends starting small. Business cards are an easy way to make young employees feel valued. Letting them shadow older employees helps, as does inviting them to a management meeting now and then. And marking milestones is major, says Dorsey. No birthday should go uncelebrated, and the first day on the job should be unforgettable. Dorsey recalls the time the president of an engineering firm called a new employee’s mother and asked her to be there when her daughter started work Monday morning. “When her mom walked through the crowd, she was like, ‘Oh, my God,’ and her mom says to everyone, ‘I took her to kindergarten, and now I’m here for her first day of work,'” Dorsey says. “The president took them on a tour of the company and explained to both of them why what new employees were doing was so important to the company. And the mom turns to her daughter and says, ‘You are not allowed to quit this job. Real companies are not like this.”
“I want to do good work, not just slog through for years till I get my Persian rug and my 50-gallon fish tank.”
Skeptics would say Mom had a point. But the idea is simply to make big companies feel small, and even major corporations can do much of that work through mentoring. This no longer means creating a spreadsheet, matching people by gender, race, or a shared love of baseball, and hoping for the best. At KPMG, says Jesal Asher, a director in the advisory practice, every junior staffer is expected to have a mentor, every manager a protege, and those in the middle often have both. There’s a website to facilitate the formal process, and social activities–happy hours, softball games, group lunches–are organized to encourage informal networking.
With the resources that companies like KPMG have, though, ice-cream socials are just the beginning. This summer KPMG will send 100 new hires to Madrid to train alongside new hires from other countries. The firm also gives employees time off to do community service. Steps like those have helped bring turnover down from 25% in 2002 to 18% last year, says KPMG’s head of campus recruiting, Manny Fernandez. “Gen Yers are able to do and learn so much more than I could at that stage,” he says, “and they’re not looking to have a career like I have, with just one company. So we’ve got to build tools that are not just about retention but about having people develop skills faster, so that they can take on larger opportunities.”
“I took her to Kindergarten, and now I’m here for her first day of work,” said the mother of a new hire at an engineering firm.
While development is a long-term goal, it begins in the short term with harnessing Gen Yers’ energy. “They’re so vocal that you can almost take an associate to a meeting with the CEO,” says Asher, “because something that comes out of her mouth is going to be actually outside the box, something that none of us have ever thought about.” And twentysomethings can thrive when given real responsibility. Mark Meussner, a former Ford manager, remembers one instance when, faced with a serious manufacturing problem and two young engineers begging for the chance to solve it, he took a chance on them. He gave them one more-experienced person as a counselor, and they made what he estimates was a $25 million impact by solving a problem that had proved intractable for a decade. The success spawned a slate of company-sponsored initiatives led by more-junior staffers. Says Meussner: “We need to use 100% of an employee–not just their backs and minds, but their innovation, enthusiasm, energy, and fresh perspective.”
It’s 12:45 A.M., this story is due next week, and I’m hard at work. By that I mean I am sitting at a desk. In my house. Wearing yellow ducky slip- pers, track pants, and the royal- blue Tommy Hilfiger pullover that has been my thinking cap since I started writing papers in high school. Pondering my bookshelf- some Faulkner, Irving, Naipaul, Kerouac, Franzen, and, of course, Dr. Seuss and A.A. Milne-for inspiration. With The Cosby Show playing in the background, Google chats going with two friends, and text messages coming from my boyfriend, who’s on assignment in Africa. When things really get going, I’ll put on Lord of the Rings: The Two Towers, which has kept me company through every major story of my writing career. In short, I’m ridiculous.
I know this will be alarming to read, particularly for my mother, who cares so much about my image that she began blow-drying my hair when I was 4. But it had to be written, because I’ve come to realize that the most significant characteristic of the Gen Y bird is that we are unapologetic. From how we look, to how spoiled we are, to what we want–even demand–of work, we do think we are special. And what ultimately makes us different is our willingness to talk about it, without much shame and with the expectation that somebody–our parents, our friends, our managers–will help us figure it all out.
That’s why, in retrospect, when I started at FORTUNE in 2004, I asked then-editorial director John Huey what he thought the magazine needed and how I might contribute to that end. “I don’t think you need to worry about that,” he said, fixing me with an ever-so-slightly amused gaze. It seemed like a perfectly valid question at the time, but with all the hindsight that three years can offer, thinking about it makes me giddy with embarrassment, but also a fair amount of awe. Who did I think I was? At 23, I had already had three jobs—one at a startup magazine that folded, a contract gig at the prestigious MTV News, and a stint recruiting for Time Inc., which is why I was sitting with Huey in the first place. And Huey was just an office away from becoming top editor of the world’s largest publishing empire. Unwise of me, to say the least.
But that’s the beauty of Gen Y. Despite the initial smirk, Huey did go on to talk to me about the magazine, his own career, and what he expected of and hoped for me. And that 20-minute conversation set a tone of learning, self-evaluation, and growth that I’m glad of now, especially as I’ve struggled to turn years of Gen Y news, research, and hearsay-ranging from the worshipful to the condescending- into some sort of cohesive narrative. It speaks to a confidence that’s been building since our parents clapped at our first steps, right through the moment when-as so many new college graduates are doing now-we walked across the stage at universities throughout the country, straight into America’s finest corporate foyers. If that makes us a bit cocky at times, it’s forgivable, because I’m willing to bet that in coming years, all that questioning will lead us to some important answers. And in the meantime–sorry, Mom–I’ll be out getting a tattoo.
