Retaining Millennials in the Workplace: Boost Benefits
Retaining top notch millennials in the workplace has become a major challenge for companies and managers. Millennials, on average, will change jobs four times in their first decade out of college—that’s four jobs by age 32, and nearly double the bouncing around that generations before them have done.
Why do millennials change jobs so frequently? Millennials want opportunity – they want a career path and job enrichment. It’s also very important to millennials that they like and enjoy their job.
I’ve seen this firsthand from the millennial generation at home (I have three millennial children), at Pentegra-hosted intergenerational roundtables and directly from the millennials I work alongside on a daily basis. We actually have a terrific millennial employee at Pentegra who just won a “Milli” award from Westfair Communications that’s given to young business stars. She’s been with us for five years – having started with an entry level job, her manager quickly realized she was an employee that is super motivated and brilliant. Her manager came to me and said, “We have to figure out a career path for her.”
To that end, we created a mentoring program and cross trained her for other jobs while she was still performing her regular duties and she kept asking for more. She kept knocking one thing out of the park after the next and made sure she was prepared for whatever opportunity came her way by getting her professional credentials from the American Society of Pension Professionals & Actuaries (ASPPA). She was patient and over time the stars aligned and we eventually had the right opportunity for her.
Managers are finding a direct correlation between retaining millennials and offering competitive benefits packages. Some are even offering to help pay down student debt after the employee is with them a certain period of time. That, of course, can be a huge benefit as millennials are now graduating with a record-breaking average of $37,000 in student loans.
However, not all companies can offer student loan help. Instead, small to mid-size companies are offering flexible work schedules, better vacation plans as well as more favorable matches for 401(k) plans.
401(k) matching contributions are a huge incentive for millennials, especially because I have not been able to find many people under the age of 35 who believe that they will receive any Social Security benefits at all in their lifetime. It’s been estimated that Social Security will run out of funds by the year 2034, about eight years before the first millennials are set to retire.
A millennial is really relying on two things. Number one, does his or her employer have a 401(k) plan? Number two, is there a matching contribution?
I firmly believe companies have to stop waiting for an employee to be with them for a year before allowing new employees to participate in a company 401(k) plan and receive matching contributions.
Millennials have a lot on their plate when they graduate and companies that don’t offer a 401(k) match right away are clearly hurting younger workers’ chances of getting a head start on saving for the future during those important first years in the workforce.
The recommendation from most financial advisors is to get into a 401(k) plan as early as possible – contributing anywhere between 10 to 15% of your salary, if possible. When it comes to smart savings strategies, the formula for millennials is no different—start saving early and often, despite student loans.
I offer that very same advice to all millennials, including my own children —save early and save often. I started having the savings conversation with my daughter while driving her home from her first part-time job at an ice cream shop when she was in high school. I explained to her that if she saved just a few dollars per week over the course of 40 years, that she could easily have a million dollars. Needless to say, she was very motivated to start saving and we opened a Roth IRA account for her while she was still in high school.
Offering a 401(k) match is key for companies that are looking to retain millennials. It’s not only a major contributing factor when millennials are first contemplating which company is going to be best for them to work at, but also whether they will stay there for the longer haul. Thankfully, companies are being a lot more responsive to millennials than they were just five years ago, let’s hope it continues.
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