Crafting the Employer Value Proposition for the Millennial Generation
March 23, 2015
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How to recruit and retain Millennial employees.

Yes, every generation has trouble understanding the next ones coming along. But employers need workers, and the country needs to keep the young’uns busy and off the street so they don’t make trouble. So we’re stuck with them.


The millennials – that inscrutable, tattooed and pierced bunch of mobile-gazing hipsters, ravers, brogrammers, social media addicts born between about 1979 and 1995. The oldest ones are in their mid-30s; the youngest are not quite in high school. But they’re coming – and they will be the most tech savvy and computer literate generation of workers yet.

And employers are going to be competing for the best of them.


Employers communicating with millennials.

So, from an HR perspective, what do we know about them? The data is starting to come in:

Financially, they are more risk-averse than previous generations. After all, Gen X workers graduated college into the boom times of the 1990s. Their baby-boomer forbears hit their stride as yuppies in the 1980s, under the prosperous Reagan era, and benefitted from a long bull market that made everyone with a 401(k) look like a genius just for contributing.

In contrast, the Class of 2012 graduated into an unemployment rate of over 13 percent among their peers, even as they watched their older friends and relatives run aground in the traumatic real estate crash of 2008-2010, the aftereffects of which are still with us.

These younger workers have a much more personal understanding of financial risk than their parents did at a much earlier age.

They value benefits much more than other workers. Indeed, multiple studies have found that more than 8 in 10 millennial workers rank benefits at the top of their criteria, when it comes to selecting whom to work for. This is much higher than either boomers or Generation Xers.

They grew up hearing all about how important health insurance is, and value health insurance a great deal. Indeed, aside from the real estate boom and bust, health insurance and related issues have dominated the economic news for the last seven years. While most of us regarded health benefits as an afterthought in our 20s and early 30s, and focused more on salary and the 401(k) match, millennials are keenly interested in comprehensive health insurance and disability insurance as an employee benefit.

They aren’t reading your employee handbook. They just aren’t. Yes, you need it for CYA purposes, but don’t be expecting your millennials to read a hard copy. They’ll happily go to a meeting or a counseling session to have you explain it to them, though.

They are struggling. Many of these young workers have been dislocated by an economy that no longer rewards a liberal arts bachelors’ degree, though that’s not what they were told growing up. And yet many of them – over 70 percent in some states – are struggling with student loans totaling over $27,000, on average, according to the Project on Student Debt. Some of these young people who went to more expensive private universities have student loans totaling $100,000 or more.

The average balance has grown by 74 percent over the last decade: In 2004 the average debt burden was about $15,000 per recent graduate. For the most recent graduates, or for those who pursued law degrees or put off hitting the work force during the worst of the recession to pursue master’s degrees, the debt burden is even higher today than the $27,000 listed.

That puts them in a radically different position than previous generations enjoyed when they were in their 20s. Student loan payments are putting a huge crimp in millennial budgets, and impeding their ability to finance or purchase reliable cars (it’s not like you can work on these new cars yourself anymore!), purchase their own starter homes, start families, or even move out of their parents’ homes.

A 2013 report from the Consumer Financial Protection Bureau found that these student loan balances and payments have diverted substantial millennial earnings substantially from things like retirement savings and down payments on homes. Economists note that part of the sluggish recovery may be attributed to millions of “missing households” – millennials who, burdened by student loan payments, lack of access to credit limited work hours due to the ACA, or any number of other reasons, have not started households of their own.


The result: While Generation X workers were all about the 401(k) match and profit sharing, millennials are struggling to make it amidst higher housing prices and widespread offshoring of work in many fields. A 401(k) match, for example, or a sweet voluntary benefits package doesn’t quite have the same allure when nearly all income after basic living expenses is going back to Sallie Mae and other student loan sources.

A better employer value proposition for this cohort may be something as simple as a meaningful student loan repayment program that allows them to move out of their parents’ homes, start a family, buy a starter home, and begin to contribute to their retirement savings plans.