As Millennials take leadership roles, it spells change in corporate culture
Models of thought
As young workers move toward the C-suite, companies are making big changes to retain and nurture them – from moving downtown to better aligning businesses with their values.
Chicago—They are the so-called “trophy generation,” those young, budding leaders who, the conventional wisdom goes, want it all with a pat on the back and a promotion every two years. In the most competitive industries, the perks tailored to them – the ping pong tables and free food, to name a couple – have become as par-for-the-course as health insurance and a retirement plan.
Still, independent-minded Millennials, broadly defined as those between 20 and 36 years old, have a somewhat uneasy coexistence with their employers. That looms large especially now, as many begin to inherit a new title: boss.
As companies plan for that future, they’re focused on figuring out the priorities of workers like Jessica Schaeffer, who has stuck with Chicago-based LaSalle Network, a professional staffing firm, for the past six years since graduating from college. Ms. Schaeffer has gone from handling some of the firm’s marketing responsibilities to a chief of staff role that has her in charge of the growing company’s internal and external communications, including pinch-hitting for LaSalle chief executive Tom Gimbel at public speaking events.
The ability of companies to nurture employees like Schaeffer up toward the C-suite will be critical to their future success. Millennials make up one-third of the current workforce, headed toward half by 2020 as more Baby Boomers retire. In order to attract and develop Millennial talent, companies are making big changes, from boosting professional-development opportunities to moving their headquarters to cities like Chicago where young adults prefer to live.
Most fundamentally, many firms are responding with a values shift – by aiming to embody the sense of higher purpose that appeals to Millennials as workers and, by extension, as consumers too.
“Young people are calling the shots and they don’t even know it,” says Josh Bersin, a Deloitte consultant who studies trends in company culture.
Actually, some young managers are helping to lead the change, even as they learn the practical limits of policies like flexible scheduling.
‘Money is ... not everything’
Schaeffer remembers entering the work world as something of a “shock to the system,” handling long commutes, early mornings and – as an English and Spanish double major with no business experience – learning the job and the business world on the fly. Mr. Gimbel and the company’s open approach gave her something she says many younger workers want – the ability to learn from older mentors and company executives directly.
“I reported to a CEO that’s running a $30 million company, I learned how to do an RFP [business proposal], how to create social media … I listened to people, I watched people,” Schaeffer says of her first months at LaSalle. “I made friends with accounting and HR. I got really unique perspective, and I got to build those relationships and have that exposure.”
Gimbel, her boss, emphasizes the importance of investing in employees like Schaeffer. In April, his company sprung for an all-expense-paid trip to Nashville for its 150 employees, and LaSalle has won dozens of awards for its office culture.
“Money is important and it pays the bills … but it’s not everything,” says Gimbel, 45, whose firm now has three Chicago-area offices and one in San Francisco. The firm’s effort has paid off in worker retention.
“Everybody’s staying. Our voluntary turnover rate is one of the lowest in the industry. We’re the destination of choice,” he says.
Making worker values company values
Not all companies have been as successful on this front as LaSalle. A 2016 Gallup poll found that 1 in 5 Millennials had changed jobs in the past year, job hopping at three times the pace of older workers.
Executives seem to know that keeping young talent happy and on the payroll is an issue, even if they’re not quite sure how to address it. A recent survey of executives by Deloitte points to the struggles: It found that while 8 in 10 executives put a high priority on the employee experience, only 23 percent rate their own solutions on work-life balance as excellent. And a 2015 study from the consulting firm found that some 70 percent of Millennials eventually want to start their own businesses. And very few – just 20 percent – are happy in a job for which they don’t perceive a broader mission or purpose.
A company with an ethos that reflects and amplifies the values of its employees is one that will have staying power through the decades, says Deloitte’s Mr. Bersin. He cites the book “Firms of Endearment,” which makes the case that passion and purpose beyond the bottom line also leads to profits and long-term success.
“I won't mention any names,” he says, “but if you look at companies that have fraud, huge government liabilities, ... all of a sudden they kind of wake up and say ‘our culture was kind of screwed up, wasn’t it?’ ”
Bersin argues that Starbucks started the trend of leadership on corporate culture when it began to offer part-time employees health insurance. It was an expensive proposition that most corporate bean counters deemed unnecessary, but the move sent a signal to both its employees and the public that it wasn’t going to be a large corporation in the traditional mold.
Some large corporations, facing the task of a culture reboot, are moving their headquarters from rural areas and suburbs toward livelier environs downtown.
Last year, McDonald’s announced it will be leaving its suburban Chicago complex in 2018 and moving corporate headquarters into a smaller building in one of the most desirable neighborhoods downtown – near where Google has recently placed its Chicago office. Caterpillar’s company executives are exiting Peoria, Ill., for a locale closer to Chicago. General Electric is in the process of moving from its longtime home in suburban Connecticut to a new campus along Boston’s seaport.
If catering to Millennials is vital for the corporate future, it’s because they’re the rising generation of consumers as well as workers. (Pertinent for McDonald’s, for instance: The younger generation values healthy eating.)
Flexibility – to a point
The transition to the next American workplace isn’t always smooth, but Millennials themselves are helping to carve the path. At LaSalle, Schaeffer says the company constantly views its Millennial-friendly culture as a work in progress.
“We want to instill fun, but we want to instill accountability as well,” she says. It’s also not just about the perks. “You can’t copy what Google and Netflix and Facebook do.” She points to the trend of offering employees “unlimited” time off as an example. “I think a lot of companies think it’s a quick fix. It doesn’t work.”
Instead, she says, “it's figuring out ‘what does my company stand for, who owns the culture … how are we scaling it as we grow?’ ”
That requires constant vigilance toward questions of company culture. A few years ago, for example, the company experimented with flexible work schedules – something much of its workforce preferred. But LaSalle’s clients weren’t able to reach its employees easily enough, and the company abandoned the practice.
“As a professional services firm we need to be available for when our clients need us,” she says. “We want people who want to be [in the office].”
In other words, the corporate world is the Millennials’ proverbial oyster – to a point.