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Top executive trends in Australia for 2020: harnessing the value-based millennial mindset
This is part two of eight articles on the upcoming trends that executives in Australia need to watch out for. In this story, we explore how millennials, the senior leaders of tomorrow, are reshaping organisational structures as we know it, and the roles executives play to engage, attract and retain these young talent.
Millennials are coming of age as an employee demographic. Already passing Baby Boomers and Generation X as a share of the workforce in some countries, they will comprise 50% of the global workforce by 2020, according to research by PWC.
Millennials are taking their place as tomorrow’s senior leaders. The implications will be transformative.
This is a generation of contradictions. Academically tested and measured throughout school life more intensely than any previous cohort; yet also taught that participation and effort count at least as much as winning. Stereotyped as shallow or overly interested in superficial interactions on social media, while sweepingly labelled as snowflakes for apparently caring too much about issues like climate change and equality.
Millennials reached adulthood during the global recession and entered a workforce changed by the pressures of globalisation and the financial crash. Things have not become any easier: they now find themselves caught in the currents of historic technological shifts that affect all areas of business.
Beyond the lazy stereotyping, there has been plenty of serious analysis of how the values of this generation — for example, their desire for flexible working practices, less rigid corporate structures and meaningful work — will impact corporate thinking and practice. This is a generation now moving into management and affecting organisational structures.
In terms of management positions, research from EY found that, globally, 62% of millennial employees manage the work of others in some form. In China, this number is significantly higher at 90%, highlighting that, while the rapid rise of millennials to the top is a global phenomenon, Asia is leading this charge, thanks also to India (85% managing the work of others) and Japan (85%).
Millennials represent not just a powerful demographic force, but a uniquely human resource: driven by deeply held values, an instinct for purpose-led work and natural empathy. So, the question for today’s C-suite should be less how to adapt to this misunderstood generation and more how to harness it. The question is how to forge these new managers into senior ones, able to turn the challenges of today into the sustainable results (including profits) of tomorrow.
A different approach to management
Although money remains, as ever, a motivator, studies such as KPMG’s Meet the Millennials demonstrate clearly that this generation places more importance on impact and meaningful work than on financial gain.
Simon Nolan, Senior Partner and Head of Global Consumer Practice, Page Executive, says that “the expectation and overall motivation of what they want to achieve from their careers has changed. It’s less about money and much more experiential. They care about their employer’s purpose.”
To attract the best managerial talent, the responsibility lies with companies to ensure they convey their employer value proposition to millennials (alongside the rest of their workforce), while actively managing their reputation. Millennial managers, like their peers, want to see the effect of their actions. They prefer and demand constant communication and informal feedback to formal, infrequent performance reviews.
At the same time, millennials need to be fulfilled by the work that they do. Job satisfaction is very important to this generation and they are rarely willing to settle or stay in an unsatisfactory position. Managers need to create structures that work best for them and their teams’ fulfilment, such as mentoring to retain the best employees. Because, as EY highlights in its study, a lack of mentoring is a key reason for millennials deciding to leave.
PWC’s research supports this, as it explains the ability to quickly progress to a managerial level role is more important to millennials in a company than competitive salaries (52% vs 44%), emphasising that meaning and clear purpose are crucial psychological drivers. These findings explain one of the more frequently cited theories of millennial attitudes — that they are less loyal than previous generations — with one in four expecting to have more than six employers during a career, compared with just one in 10 in 2008.
All of this poses a vital question: by aiming for management positions, might this generation be climbing the ladder quickly so they can bring about the positive changes they believe should be available and applicable to all employees?
Twenty years ago, Generation X managers developed and popularised the concept of work-life balance, a phrase that quickly entered the Oxford English Dictionary.
Today, millennials are refining that concept and taking ownership of what it truly means in practice. The concept of working outside of office hours has not suddenly become anathema, but there is a clear expectation of a quid pro quo. As further research by KPMG shows, there needs to be a common-sense trade-off that allows time for personal life and obligations during official work hours — a pragmatic and honest expectation that explains their preference and propensity for flexible working options.
Nolan sounds a note of caution here, as flexible working is always a balancing act between team-building and freedom of location: “While it is important to empower employees with flexi-work benefits, we need to be careful not to lose the value of in-person, in-office engagements. If you want a team to truly grow together and prosper, you need them to perform in close physical proximity to each other.”
The Michael Page Working Life study in Europe found employees of all generations desire a better work-life balance and less intrusion into their private life from work. Even if we are not familiar with the statistics, we likely all recognise the picture they paint: 62% of Europeans in employment check work emails outside of office hours every weekday, along with 57% who answer work-related calls. Nearly half of workers say that out-of-office communication negatively affects their work-life balance, while 40% of Europeans still have no access to remote working at all.
A more flexible, sustainable and productive blend of work and life is clearly needed. Millennial managers will both expect it, and expect to deliver it.
Relationship management is key
For millennials, the traditional hierarchical structure that Baby Boomers or Generation X-ers work or worked under is simply outdated.
They believe open, honest communication across experience levels is more valuable than a formal chain of command. Instinctively attuned to the impact of relationship power-dynamics on culture and workflow, managers of this most empathetic of generations want more communication and less bureaucracy in the workplace.
US-based shoe and clothing e-retailer, Zappos, adopted this flattening of hierarchy when they instituted holacracy in their organisation. Their aim was to empower creative collaboration to support new initiatives across all roles, while reaping the cost-saving benefits of needing fewer employees, since all roles expanded.
But this is not yet the norm. “We’ve been accustomed to this idea of upward mobility at work for decades,” Nolan expounds. “I haven’t seen much of a move away from that in most companies. Even a company as progressive as Amazon still has a hierarchal organisation structure.”
The wide-scale adoption of flatter hierarchies will not happen overnight — old habits die hard — but companies that explore communication-led and bureaucracy-light structures will undoubtedly be the first to harness the millennial mindset.
Millennials need to see this kind of positivity not just in their structures and leadership teams, but also in the focus of the company itself. The 2018 Deloitte Millennial Survey shows that while they see business leaders as generally positive (44%), these leaders remain some way behind NGO leadership (59% positive), highlighting that the purpose of the company and leadership they work for is vital.
There is no right answer to the question of how to position a company to harness millennials’ mindset, in terms of building the senior leaders of tomorrow.
The best approach may be a blend of forward-thinking strategy and tried-and-tested tactics.
Companies need to take the time and effort to understand the research that has been done into this generation, to properly understand the values that drive millennial managers.
The next step is to consider how those values can be harnessed to respond to the challenges that are coming, such as AI and automation. By ignoring the stereotypes about this generation, it is possible to see millennials as the most human of human resources. Complex, deep, shaped by contradictions — and powerfully placed to build truly human organisations, focused on what employees, customers and stakeholders want and need.
All of us should be excited about that future and what it will look like.
Millennials are making workplaces more human by demanding more flexibility, bringing their values into play and harnessing the power of feedback.
▪ Millennials will soon be senior leaders: the implications will be transformative.
▪ China, India and Japan are seeing the biggest influx of millennial managers.
▪ Companies need to convey their employer value proposition to attract talent.
▪ Companies should blend forward-thinking strategy and tried-and-tested tactics.
▪ Mentoring programmes, open communication and job fulfilment are keys to engaging younger generations.