Now that millennials represent the largest generation in the nation’s labor force, employers are competing in a tight market for this young talent. Flexible work policies are a rising demand many companies are rushing to meet, as millennial employees seek greater freedom and work-life balance.
When Kaelin Priger, 26, interviewed for her current job as an environmental analyst in Atlanta, she was excited the company offered three weeks of vacation per year, plus overtime compensation in the form of paid time off, starting on day one.
She lived abroad for several years, and the vacation policy meant she could visit friends in Turkey within her first five months of work. Priger called it “a dream.”
“I think as millennials, we are realizing that we can have a robust life outside of work that perhaps past generations didn’t grasp,” says Priger. “Maybe past generations thought that it was necessary to sacrifice more for your work than millennials are willing to. My parents were not surprised that a job would offer me no vacation for a whole year, but I was not willing to accept that.”
Priger isn’t alone. Now that millennials represent the largest generation in the nation’s labor force — with more joining every day — employers are competing in tight market for this young talent. Flexible work policies are a rising demand many companies are rushing to meet, as millennial employees seek greater freedom and work-life balance.
But even as millennial workers are granted flexibility their parents may not have dared to ask for, many simultaneously worry they might lose benefits their parents enjoyed, such as retirement plans.
“Millennials are no different from anyone else, apart from the fact they are digital natives,” says Sophie Wade, founder and workforce innovation specialist at Flexcel Network, a consultancy that advises firms on the future of work, and author of the book Embracing Progress: Next Steps for the Future of Work.
Although many employers assume that millennials don’t care about more traditional benefits, like retirement plans, in reality, a good 401(k) plan can be very attractive to younger workers, Wade says. She’s found that many young workers have reported being acutely aware that there will be less of a safety net for them than for older generations.
“They do have an understanding their long-term prospects are very different from what has been in the past,” she says.
The recently released Deloitte Millennial Survey 2018 underlines this. The survey found 51% of millennials and 63% of Gen Z respondents cite financial rewards and benefits as very important. In fact, they rank those factors second and third, just after one priority: a positive workplace culture.
Deloitte surveyed 10,455 millennial workers (born between 1983 and 1994) in 36 countries who are employed in the private sector, as well as 1,844 Gen Z respondents (born between 1995 and 1999) in six countries.
Old Benefits Still Attract Young Talent
Just how important are traditional benefits? One reason Priger left a previous job was she discovered on her start date that there would be no vacation days for the first 12 consecutive months of work and a maximum of two weeks of vacation for those who stayed two or more years.
She had assumed she would get a minimum of one to two weeks her first year, which she understood to be a common agreement.
“I was astounded, not only by the fact that I would have to give up seeing my international friends for a whole year, but that I had no chance of receiving more than two weeks of vacation annually, no matter how long I stayed at the company,” she says.
Although her boss later updated the policy to provide three weeks of vacation for those who worked five or more years, Priger ultimately resigned and looked for a new position.
Priger’s decision to leave is reflective of a larger shift in thinking among millennials. A Gallup report found that 21% of millennial workers reported changing jobs within the previous year, which was more than three times higher than what non-millennial workers reported. The study estimated the turnover cost the national economy $30.5 billion annually.
In addition to classic benefits, millennials welcome nontraditional perks and benefits popularized by tech startups, too.
“A lot of people appreciate the perks very much,” says Amos Schorr, 25, who worked at a nonprofit and then a recruiting firm before going into business for himself at Hack Summit Labs, a New York City area firm that creates programs to engage the business world on social impact.
“I can get considerably more work done than if I was in an office,” Wickstead says.
Schorr says his friends in the tech world really appreciate it when companies have a great cafeteria that offers free food, he says. “Great chairs are a perk a lot of people talk about—like Aeron chairs,” he adds. “Especially for the engineers I know, that’s really important. That’s a big difference in their daily life.”
That said, many millennials would prefer to be sitting somewhere outside of the office, like their home or a café. In Deloitte’s survey, 44% of millennials and 50% of Gen Z respondents cited an employer’s flexibility in both hours and location as “very important” to them.
Flexible Work Policies Tough to Get Right
Indeed, 55% of workers in these generations who intend to stay with their existing employers for at least five years said there is more flexibility now at their workplace than compared to three years ago, versus 35% of those who plan to leave within the next 24 months.
The desire for flexible work policies is driven less by age than by life situations, such as having a child or having aging parents, notes Chris Broderick, president of B.near Global, a human resources consultancy in the Chicago area.
“If you’re a new mom, you’re going to want flexibility around nursing your baby, regardless of whether you are 40 or you are 25,” says Broderick. “If your parents are aging, you could be 32 or 52, but you still have the same need for flexibility.”
Many employers aren’t keeping pace with what young workers want on the flexibility front, however.
“People find it challenging to get the flexibility to work from home,” says Broderick.
Often it’s because managers lack the skills to manage a remote workforce. “People working remotely need managing differently, in a more individual way,” says Wade. “They need very explicit instructions.”
This inability to meet the demand for flexible work policies can be costly in the war for talent. Businesses are not just competing against each other, but the option of self-employment. Many millennial and Gen Z workers see doing work in the gig economy as “an attractive alternative or adjunct to their jobs,” according to the Deloitte survey.
Some employers are staying one step ahead of the trend– and they’re benefitting. One reason Tom Wickstead, 25, loves his job as a project manager for a pharma company is his freedom to work from anywhere. “The ability to work remotely is a massive thing for me—from home, a coffee shop, wherever it might be,” he says. Although his company is physically located 10-12 miles away, he works from his home three-quarters of the time, finding there are fewer interruptions. “I can get considerably more work done than if I was in an office,” he says. Oh yeah– he also likes the five paid personal days a year the company offers.
Wickstead also likes it that his current employer is fine with team members running “side hustles,” like his stories featured in a Business podcast, focused on inspiring entrepreneurs. “That is a benefit from the employer, in terms of being open-minded,” he says.
Even better, his employer can offer flexible work policies for free.