Research from the CEB shows that many of the beliefs about Generation Y are myths. Case in point: Yers are the most loyal to their employer
As the economy shows intermittent signs of life and the labor market thaws, albeit slowly, organizations are revisiting the employment value proposition they offer to attract and retain the best-quality employees. Attracting Generation Y, however, still vexes most organizations. One company researched by the Corporate Executive Board has spent millions on a dedicated team within its HR function that produces unique programs for its Gen Y employees. The team has implemented customized development programs, team-building activities, and social responsibility initiatives tailored to attract and retain Gen Y employees. While it's still too early to see if the investments have been effective, it does raise the question: As the economy and labor market improve, will these investments be necessary to attract and retain Gen Y? Some researchers argue that the investments will be necessary because Gen Yers (those employees aged 22 to 29) are fundamentally different in their approach to work, while others believe that as Gen Yers age, their behavior and approach to work will fall in line with those of the previous generations. The reality is that most of the perceived differences about Gen Y are myth. Over the past three years, the Corporate Leadership Council, a program of the Corporate Executive Board, has surveyed more than 400,000 employees in different generations about their approach to work. This analysis reveals that the generational differences center on satisfying Gen Y's needs in new and different ways rather than satisfying needs that are different from those of Gen X and Baby Boomers. Myth 1: It's all about the money for Gen Y When comparing across Gen Y, Gen X, and baby boomers, each age group indicates compensation is either the most important or second-most important job attribute (out of 38 examined) they care about when evaluating potential employers. What is different, though, is how Gen Y evaluates their level of compensation, which creates the need for an entirely different compensation communication strategy. Gen X and boomers want to know how much compensation they get and whether the level of compensation will meet their needs. Gen Y employees focus much more on their level of compensation relative to their peers and less on the absolute amount of compensation. The implication for executives is that communication about compensation levels across the company (a subject often avoided in previous generations) will become more important in engaging Generation Y. And that communication must be more transparent than ever:, Organizations will be pushed by Gen Y employees to share specific pay ranges, bonus amounts, and in some cases, the specific pay amounts of employees to effectively engage them. Myth 2: Gen Y isn't loyal The reality is that Gen Y is actually more loyal to employers than either boomers or Xers. Thirty-six percent of Gen Y employees indicate that they feel obliged to stay with their employer. Without a doubt, that is a low number, but only 31 percent of Gen X employees and 32 percent of baby boomers feel obliged to stay with their employer. In addition, 47 percent of Gen Y employees indicate their employer has the employee's best interests in mind when they are making decisions, compared with 40 percent and 41 percent for Gen X and baby boomers, respectively. While Gen Y is slightly more loyal than previous generations, they don't face the same constraints as other generations do in their life decisions. Gen Y is more interested in exploring different types of career paths rather than locking into one for the course of their working experience. This creates a perceived lack of loyalty rather than an actual lack of loyalty. In response, leading companies have adopted two distinct strategies. They have overinvested in creating multiple career paths and options for Gen Y employees, both to leverage their loyalty and to respond to their desire for multiple career paths, with those multiple career paths ideally being pursued at their companies. Second, they have been more open to hiring boomerang employees (employees who have left the company and then returned). Boomerang employees tend to be higher performing when they come back, because they are already familiar with their employer and have gained valuable skills by working at a different company. Myth 3: Gen Y Communicates Differently A third major believed difference across generations centers around communication styles. While Gen Y is significantly more likely to use text messages and social networking sites in their personal lives as a method of communication, this is not true when it comes to communication within the workplace. When communicating with their manager, 18 percent of Gen X and Gen Y employees indicate that they predominately use networking tools, text messages, or instant messaging communication tools. By comparison, 15 percent of baby boomers say they predominately use the same tools when communicating with their managers. The contrast is greater when it comes to communicating with peers: 25 percent of Gen Y employees use new communication tools in peer interactions, compared with 19 percent for Gen X and 16 percent for baby boomers. New communication technologies will continue to expand in the workplace, but a communication tool gap is unlikely to emerge across the workforce, because older generations in the workplace are already adopting these tools. The objective of executives should be how to improve communication across the organization rather than focusing on specific communication tools for different generations. The reality of Gen Y in the workplace is that they aren't as different as we might think. What motivates their performance is relatively similar to other generations, but the best companies meet these needs in new and different ways. Those companies focus on clearly communicating around compensation differentiation, creating multiple career paths and options, and enabling peer-to-peer communication tools for all employees to attract, manage, and retain Gen Y employees. Tiffany Fountain, a consultant with the Corporate Executive Board's Corporate Leadership Council, contributed to this article.