Engaging generation Y Money will not buy love from the next wave of talent Written by The Economist Intelligence Unit W ith unemployment on the wane in the UK, the balance of power in the employment market is shifting As the number of vacancies grows, competition for the top talent is sure to intensify But when it comes to hiring the stars of the younger generation, businesses may soon find that their traditional lures, such as salary and equipment, may no longer hold their appeal This is confirmed by António Horta-Osório, chief executive of Lloyds Banking Group, who acknowledges that in the wake of the financial crisis his industry will have a tough time securing the finest minds of a generation A survey by Lloyds found that 28% of students would be too embarrassed to tell friends that they were going to work for a bank, 41% distrust financial institutions, and 56% trust banks less than they did five years ago “We want the best and the brightest to see banking as a credible career choice,” Mr Horta-Osório says, but because of the reputational impact of the credit crunch, the next generation is more likely to choose a career in the public sector than in financial services The banking sector is at the sharp end of a trend that will affect any organisation seeking to attract young talent Increasingly, young workers are looking for employers who offer less tangible but more meaningful benefits Money will always hold a certain appeal, but according to Peter Thomson, visiting executive fellow at Henley Business School and coauthor of Future Work, even high salaries not have the same draw they once did “These tend to be seen as bribery, particularly in financial services,” he says “Banks might pay a lot of money, but they expect long hours, and people recognise they are being paid to give up their private lives.” Instead, Mr Thomson says, young people want more control over their working lives That means being measured by results and rewarded for thinking up smart new ways of doing things, not for when or where they get the job done, Mr Thomson says “They expect to have choice and to be empowered to make decisions.” Companies putting this into action include online video streaming service Netflix, which allows employee not only to choose their own hours, but even lets them decide how many holidays they take Consumer goods giant Unilever, meanwhile, plans to make 30% of job roles “location-free” by 2015, reducing the amount of office space needed, saving money and enabling expansion without increasing its carbon footprint – another way to appeal to Generation Y Organisations that are flexible and give employees time out to travel are much more likely to keep them than those who try to restrict people to one location for years, says Michael Jenkins, chief executive of Roffey Park, a charitable trust that helps people achieve their potential at work “It’s enlightened self-interest, because the employee will probably come back more useful in the long term.” Another important motivator is the ability to expand one’s skills and try new things Online grocery retailer Ocado recently tapped into this with what it calls “a guerrilla recruitment campaign” to attract technology people with skills such as robotics and simulation It is encouraging them to “think big and experiment”, and letting them see the fruits of their efforts within two hours, rather than two months, as is usually the case A sense of purpose As Mr Horta-Osório’s remarks reveal, young recruits are sensitive to an organisation’s purpose and mission According to Lesley Uren, a talent management expert at PA Consulting, applicants are more likely to be attracted by employers who have a good reputation and espouse corporate values in line with their own “Organisations need to think more about what they stand for and clarify this,” she says Sponsored by: To win immediate loyalty from recruits, Ken Lever, chief executive of UK-based Xchanging, a technology services company, talks to the annual graduate intake on their first day Within 24 hours they fly to Xchanging’s office in Shimoga, India, where “buddy” counterparts help them build cross-cultural relationships The recruits also spend time in an elephant sanctuary and eye hospital that the company supports Each graduate has a board-level mentor who helps promote them internally To summarise, Mr Jenkins says that people are motivated by being in alignment with the purpose of the organisation, having autonomy and freedom to explore areas outside their main job, and being able to shine among their peer group and become really good at what they These factors will become increasingly important as the new generation enters the workplace, he adds This may present a challenge to a generation of managers, currently doing the recruiting, who have been trained to focus on more tangible objectives Many industry leaders have risen to power and influence by virtue of their technical, scientific, legal or accounting knowledge, Mr Jenkins says “They’ve not had the opportunity to understand what makes people tick from an emotional point of view.” Any change in mind-set will need to begin early Business schools, says Mr Jenkins, see their main function as creating people who think driving shareholder value is the be-all and end-all Roffey Park’s research has shown that companies with this view will not motivate people in the long term, because once they have achieved it, the pressure is to keep on delivering more of the same This can make them take risks and eventually burn out, says Mr Jenkins “The financial sector has shown what happens when people are pushed too far.” ... immediate loyalty from recruits, Ken Lever, chief executive of UK-based Xchanging, a technology services company, talks to the annual graduate intake on their first day Within 24 hours they fly to Xchanging’s... really good at what they These factors will become increasingly important as the new generation enters the workplace, he adds This may present a challenge to a generation of managers, currently... objectives Many industry leaders have risen to power and influence by virtue of their technical, scientific, legal or accounting knowledge, Mr Jenkins says “They’ve not had the opportunity to understand