How Do You Keep Millennials From Moving On?
The Cost Of NOT Investing In Training
It seems logical on the surface to cut training. After all, budgets must be trimmed in this economic environment. Not only is the training financially a burden, but there is so much on the organization’s plate that entering into this kind of “extracurricular” activity is time consuming. There is an urgent need to focus on the business in front of us and increase profit margins.
Yet this kind of thinking is counter-productive in the long run (and in many cases in the short run). This is true of employees in general, but exponentially true for the Millennial generation (1978-1994), also known as Gen Y. They need to be challenged, given regular feedback, and understand their personal development plan. Beyond this, companies need to have these young employees involved in ongoing training activities.
Many organizations are set up to where new hires learn a lot and then learning gradually slows down after two years on the job. When the training momentum trends towards stopping, the departure rate of Millennials is heightened. The training often is in high gear for the first six months, and then replaced with the assumption of on-the-job-training. The fact is that there IS on the job learning. But without time invested in training, a Millennial will see themselves as just doing a job. They might perceive the value they bring to the company, but the training and learning slows towards stoppage.
Is cutting the training budget financially prudent? A survey done on 200 companies showed that slowing down or delaying training was costing those companies an average of 7% of their total annual sales. There are also the costs of covering the position while vacant, the cost of recruiting the replacement, and the cost of training a new hire. (Ken Blanchard Companies – The Cost of Doing Nothing Calculator)
It is important with Millennials to keep them learning and moving around. This creates value for them and increases retention. Deloitte, Microsoft, and other companies do this well. Companies like these also see the value in training, not just these young employees, but all their employees. A leading authority on turnover and retention (Saratoga Institute), found that at least 9% and up to 32% of a company’s voluntary turnover could be avoided with ongoing training.
For Millennials the stakes are even higher. They are more prone to voluntarily walk than their older counterparts. They need to be given multiple opportunities to keep them challenged and engaged. And we know that engagement impacts the bottom line. How could it not? If someone is highly engaged in their work they will obviously do a better job. Companies that move their young workers around to give them greater exposure and buy in, are more positioned to retain their good employees than those that don’t. It’s actually a mindset that is caring and kind. It’s a mindset that says, “We are interested in what you need to be learning for your personal development.” It’s taking an interest in their learning curve.
If 75% of what they are doing is what the company immediately needs, and 25% is what the Millennial needs, then in the long run the company benefits from an engaged, devoted, and loyal partner. As time goes by and Millennials step into executive leadership, they will be doing this. So as a company why not get ahead of the game and start doing it now?
Too many companies don’t see this. They will in the future, but not now. They feel that if you are not working 100% on our current needs, then you are not a valuable employee. Yet that is simply a false assumption and a poor strategy for employee engagement.
We all know the cost of employee replacement. Corporate trainers, Red Tree Leadership, show the replacement cost of employees at various levels of the organization.
It costs you 30-50% of the annual salary of entry-level employees, 150% of middle level employees, and up to 400% for specialized, high level employees. (SHRM)
Research shows that the investment of developing employees, in this case the Millennials, reaches to the bottom line.
In a sputtering economy one of the first things to go is training. This is where counter-intuitive thinking and action will produce the desired effects. Training and career development is essential for this new workforce. Organizations need to build into their training a personal development plan. This will not only keep talent on the job, but it will also keep them engaged. That shows up at the bottom line, and leverages talent for future growth.
(Mick Ukleja is the co-author of the book Managing the Millennials: Discover the Core Competencies for Managing Today’s Workforce)
*We have partnered with Red Tree Leadership to deliver training in Managing The Millennials.