Renée* was tapped to join the market research team for a project on Millennials with one of her firm’s biggest clients, she was thrilled. As a Millennial herself, she looked forward to sharing her insights and showcasing her value to both the client and senior management.
Those hopes faded at the very first meeting with the client, who’d brought along an expert to inform the team about Millennials as a consumer demographic. This expert presented marketing data and then, to embellish his numerical portrait, provided a detailed list of the Millennial generation’s most common characteristics. Millennials, he explained, were overly idealistic, self-involved, impatient to be acknowledged with raises and promotions, and quick to turn their backs if these demands weren’t met.
Renée felt powerless to counter his argument. “After hearing all about how Millennials act like we’re experts right out of college, and how we all want to be given trophies for our ideas, how could I say anything?” she points out wryly. “It was so uncomfortable.”
Yet by far the most eye-opening—and distressing—response came from her colleagues. “I looked around the table, and all the people on my team were nodding their heads in total agreement,” Renée recalls. “I remember thinking to myself, ‘Is this why I’m not getting any development opportunities at this firm? Is this why I’m not advancing?’”
The Next Workforce
Renée’s experience illustrates a stubborn paradox in corporate America’s treatment of Millennials (the cohort of twenty-one- to thirty-four-year-olds also known as Generation Y). Succession planners and talent specialists recognize that they absolutely need Millennials—who number eighty-three million in the US alone—to step into the leadership gap left by retiring Boomers.1 It’s a gap the far smaller cohort of Gen Xers (who total just 46 million in the US) simply cannot fill.2 Yet, employers resent having to accommodate Millennials. They’re cognizant of the fact that Millennials represent both the future workforce and the most important consumer demographic worldwide, so they court Millennials assiduously, often recruiting promising talent before they even graduate university. Renée, for example, began working for her company as an intern when she was still a college student majoring in psychology. Once Millennial talent is in the door, however, employers resist allocating resources to them.
There is no disputing that Millennials are the next workforce: Millennials represent more than one quarter of the nation’s population and 34 percent of the US workforce, outnumbering both Gen Xers and Baby Boomers by a significant margin; by 2025, Millennials will make up 75 percent of the global workforce.3 Millennials are certainly the most diverse generation to date—44.2 percent of Millennials in the US identify themselves on the Census with an ethnic or racial group other than non-Hispanic white.4 Many are the children of immigrants, and about 15 percent were born in foreign countries—nearly double the proportion of foreign-born Gen Xers.5 Young Millennials are also more than three times as likely as adults aged sixty-five and older to identify as LGBT.6
Diversity is not the only area where Millennials differ from previous generations. In the US, these men and women have come of age in an era of unprecedented socioeconomic inequality. The wealth gap today is the widest on record: in 2013, the median net worth of the highest income tier of families was almost seven times that of middle-income families and nearly seventy times that of lower-income families.7 Many Millennials entered the workforce precisely as the global financial system buckled; they were the driving force behind Occupy Wall Street, the sit-in that began in New York City’s financial district and swelled into a movement protesting social and economic inequality worldwide.8 In the wake of the Great Recession, Millennials continue to feel the squeeze of economic uncertainty.9
That socioeconomic backdrop helps explain another distinguishing trait of this generation: Millennials are particularly anxious to establish career credentials, as they enter the white-collar workforce more qualified than any previous generation. Sixty-one percent of Millennials in the US have attended college—a talent pool of over fifty million—compared to just 46 percent of Boomers.10 Ambitious and highly educated, these young employees understandably resent getting coffee and making copies. Indeed, they cannot be perceived as perennial interns, because the imminent exodus of Boomers in leadership leaves a power vacuum that Millennials must fill.
As employers like Renee’s clearly grasp, Millennials represent the future of not only the workforce, but also the consumer market, commanding tremendous power both as trendsetters and as customers. In the US alone, Millennial spending power is estimated to reach $200 billion annually by 2017, totaling more than $10 trillion over their lifetimes as consumers.11 “We look at Millennials as a strategic segment, because they represent such a significant consumer base,” agrees Nancy Testa, VP, senior HR business partner, and chief diversity officer at American Express. “They are American Express’ current and future Card Members.” With Millennials beginning to step into positions of corporate leadership and take control of the purse strings, understanding what motivates this generation will become critical for companies trying to capture not only individual consumers, but also the corporate consumer market.
Millennials are, in short, the bench strength for leadership—and as such, the candidates whom talent specialists and succession planners must prepare, however premature it may seem to do so. But if Renee’s story is at all indicative, that’s not what companies are doing.
Renée’s employer snapped her up as a full-time employee as soon as she graduated, enthusiastic about her passion, skills, and leadership potential. But that initial interest failed to translate, during the eight years of her employment, into investment in her skills growth or leadership development. Training and on-the-job learning never materialized; project management opportunities were offered to older—though not necessarily more experienced—colleagues. The firm’s commitment to Renée only worsened after she had her first child and began working from home one day a week. “It’s like the hours I put in outside the office don’t count,” she says, “even though I always deliver, and probably put in more time than my boss.” Hence her excitement at the opportunity to show her mettle on the Millennials client team: she thought she was finally getting a chance to stretch her wings.
Renée’s experience appears to be typical. Average spending for all corporate training activities (including both employee and customer training) amounted to just 0.7 percent of annual revenues in 2013.12 Part of the reason for this paltry less-than-1-percent investment? Companies are offering on-the-job training to far fewer employees than they used to. In fact, the proportion of employees receiving on-the-job training dropped 42 percent between 1996 and 2008.13
Those employees lucky enough to benefit from employer-sponsored training are receiving the bare minimum: in 2014, organizations spent an average of $1,229 per employee on learning opportunities—roughly the same amount they might spend on that employee’s annual printing costs.14 This amounts to a total of just 32.4 hours of training per employee.15 A paltry 13 percent of that training is dedicated to developing managerial or supervisory skills, a critical area of mastery for a generation poised to step into management roles within the next few years.16
Young employees have never been a top priority for companies when it comes to allocating leadership development and training resources. Yet talent management specialists do note that organizations approach Millennials’ development differently. “Companies need to find ways to develop talent differently and not in the same ways they did years ago,” says Barbara Keen, head of diversity, culture, and organization effectiveness at Novo Nordisk. “In the past, you would ask someone to spend five days getting trained. Today the response is, ‘Are you kidding me? I can’t take that much time.’ We are working hard to make sure our new professionals get the tools they need to be successful in the future. If a company doesn’t adjust or doesn’t see this as a priority, then future leaders are missing out on an opportunity to grow.”
Other talent specialists, particularly those of Generation X, similarly observe that there’s been a major culture shift in the way corporations approach young talent. They see a marked difference between their own experience entering the workforce fifteen years ago and that of Millennials entering today. “There’s no training, no management development,” one HR executive told us. “When I was starting out in the workforce,