Gen Y Retention in a Tough Economy

October 28, 2008

You may find yourself wondering why I would choose to write about employee retention in a tough economy. 

Some of you may be thinking that, in a poor economy, retention efforts are unnecessary since employees are less likely to leave their existing job.

Others may be thinking that retention is even more critical in a down economy.

I’m writing in response to the first position with support for the second.

Over the past few weeks, I can’t tell you how many times I’ve been responding to comments along the lines of, “As the economy gets worse, I don’t t think we’re going to have a retention problem.  I don’t expect our Gen Y employees to be leaving as fast as they used to.”  While the spoken element of this is a belief that their employees won’t leave, the unspoken belief is that efforts to increase these employees’ job satisfaction are no longer necessary.  Bad Plan!

In a down economy, employee retention and job satisfaction are even more important. 

Employers who think the poor economy will encourage an unhappy Gen Y to stay in that job will find themselves disappointed and with an open headcount.  This generation is fairly confident they can get another job, likely to already have their own entrepreneurial ventures going, have friends with entrepreneurial ventures going, &/or see no stigma in moving back home with their parents. 

So, in a down economy, doesn’t it make sense to focus attention towards retention, efficiency and morale efforts rather than the alternative?  Consider the following:

Recruiting Efforts & Costs – When an employee leaves, unless you are not replacing that headcount, you and others in your organization will be spending time and money to replace that employee with someone as qualified as the person you hired in the first place.  Once you have paid the recruiting costs and you, your staff, and your HR department have spent the time interviewing, you have the . . .


Training Costs and Training Time – You will need to train the new employee so s/he can be a productive new member of your staff.  Who will do most of that training?  Probably your existing employees who are already overworked because of the . . .


Retained Staff’s Reduced Efficiency and Effectiveness – First, your staff is probably running lean in this economy as cost containment becomes a survival focus.  Second, when your employee resigned, your existing staff has likely had to absorb the workload until a new employee is hired.  Third, they are still doing more than one person’s work, are now training the replacement and are still covering the replacement’s workload until that new employee comes up to speed.  This means that they spend less time on their original job and what follows is . . .


Churn’s Morale Hit – When employees start to leave an organization morale takes a hit.  It’s frustrating to see someone move on to another position.  It makes you feel like you’re being left behind.  It makes you think more about greener pastures and what’s “wrong” with your current job.  It makes you feel trapped.  And sometimes, you may just miss your old work buddy.  This doesn’t even include the reality of the extra work coming your way, when you’re already doing the work of two people because your company is running lean in this tough economy.

Reputation for an unpleasant culture gets around.  Once the economy improves, these employees you didn’t care enough about will leave and it will be hard to replace them because you will have a reputation as an organization that doesn’t care about its people and doesn’t treat them well.

But, besides all this, why would an organization want to retain people who aren’t happy in their jobs.  That too creates a morale hit.  You also aren’t getting those employees at their creative, problem solving, roll up their sleeves best.  And isn’t a tough economy when you need that most?

So, for Managers of Gen Y employees, while you may get some satisfaction from the reality that it will probably take longer for the departing employee to find another job than that employee anticipates, that doesn’t negate the fact that you now have to spend time and money on recruiting and training, and endure yet another learning curve.  Retention efforts don’t need to be expensive.  Focus on making sure your employees (all employees, not just Gen Y’s) understand the value of their efforts, why their projects are important, and that you care about them as people.  Be patient with them, they’re worried about the economy too.  Invest in their skills and assure them that they are “part of the solution.” Surprise them with something fun once in a while.   Assure them that they are critical to your organization’s riding out a tough economy.  You need them at their creative, focused, problem solving, happy best.

Gen Y, don’t just sit back and wait for things to get better.  Take part in making it better.  If you’re ready to leave a job not because you’ve got a great opportunity but because you’re unhappy where you are, think about what you could do to make things better.  Before you get your letter of resignation written, put yourself in your manager’s shoes and think about the challenges s/he is facing.  If you were that manager, how would you want/need your employees to respond.  Now is the time to be your best.  While your management needs to recognize that you are “part of the solution,” you need to actually BE “part of the solution.”  This is your opportunity to wow your manager and have the impact on the organization that you know you have the potential for.  Won’t that position you well when the economy improves and promotions and new projects flow more freely?  Yes, a large part of this is your management’s responsibility.  But an even larger part of it is yours.

Social Networking Tools – To Enable or Disable Access?

October 13, 2008

“If we give our employees access to _______________, they won’t get any work done!”

This is a quote from the director of a department I worked in a loooooong time ago.  I was a Systems Analyst with the N.A.S.D. (they manage the over the counter stock market.)  The year was 1987 and he was referring to the personal computer.  He went on to say “They’d just play games all day and I don’t have time to police it.” 

There were a few open area computers that we all had to share.  So, you’d draft your document on paper, then hope to find an open area computer available.  You’d migrate all your notes etc. to the computer, type and further refine your document.  Then you’d print it and head back to your desk to proof it.  Once proofed, you’d again hope a computer was open and enter your edits.  Then print and back to your desk.  Hopefully, you wouldn’t find an error.  If you did, you’d ask yourself, “does this error really need to be corrected?” before deciding whether it was worth the effort to start the process again.  Needless to say, it was incredibly inefficient. 

Since Apple was one of the major stocks on the NASDAQ, our management decided that our IS department should have one.  Volunteering to house the lone Macintosh (that we purchased at Macy’s) on my desk finally got me out of the open area computer pit.  That was my first experience with my own computer at work and it was one of the best decisions I ever made.  I became known as the person who could process the most work in the shortest amount of time.  My documents looked better than anyone else’s because I didn’t have to spend 20 minutes correcting a typo.  Go figure!

Can you imagine having to share a PC now?

Fast forward to the mid 1990.  The Internet was coming of age, and companies were reluctant to give their employees access.  Why?  Same reason.  Managers didn’t see the value that access to this range of information would have on their employees’ productivity.  They also didn’t want to police usage and were afraid their employees would surf and shop all day when they were supposed to be working. 

It’s 2008 now, almost 2009, and many companies still don’t allow their employees Internet access or dramatically limit the sites their employees can view.  So, it’s no surprise that these and even full-Internet-access-allowing companies shutter at the thought of letting their employees access social networking tools like Facebook and MySpace.

In terms of the potential for a productivity hit, they’re not completely wrong.  You can plan to just take a peek and then spend 30 minutes or more as one curiosity leads to another.  But there will always be potential for distractions.  If your employee can’t manage their time and meet their commitments through any number of temptations and distractions, don’t you have a bigger problem?

Social Networking Tools are how Gen Y communicate.  This is not just a casual connection.  This is a significant part of their lifeline. 

For managers, my strong recommendation is that you allow your employees access to social networking tools for the following reasons:

First, if you don’t, poor economy or not, you will have trouble attracting and retaining this already fickle generation of employees.  Your policy on access to social networking tools will say more about your culture than many other decisions.  To this generation, no access to social networking means a company that “doesn’t get it.”  Whether Gen Y’s recognize it or not, they respect people who understand and embrace new technologies and have less respect for those who don’t.  You might say “I want to do everything I can to assure your productivity and success.”  But, what they’ll hear is “I don’t trust you to exercise good judgment regarding how you spend your work day.”

Second, think about the full scope of what you’re asking them to do in their role with your company.  At some point, you’ll want them to:
 – help you make a sale or do their own sales call
 – recruit their associates into a newly opened position
 – come up to speed quickly on a topic so they can execute a new project
 – quickly uncover best practices as you re-engineer a process
 – etc.
Their first instinct will be to leverage their personal network.  How effectively and enthusiastically do you think they’ll meet those requests if you disable access to the most effective tools they’ve got? 

Third, they all have handheld devices.  They’ll access these tools whether you provide access or not.  Why take the “old fashioned culture” hit, if it won’t stop your employees from accessing the tools during their work day anyway?

Yes, you will need to coach them on security issue boundaries, how to manage their time well, and how to impact the perceptions of senior management (see my earlier blog on Information Sharing Boundaries.)  This is an excellent opportunity to establish a reciprocal arrangement with your Gen Y employees.  You help these employees to use social networking tools in an acceptable way within your organization and have them train you (and others) on all the power of these tools.  That level of respect for what they bring to the table will go a long way in cementing their connection to your organization, not to mention help you learn to use some potentially valuable new tools.

For Gen Y’s, (how do I say this without sounding condescending?) don’t make me sorry for presenting this recommendation.  Muster the discipline not to abuse this access privledge while at work.  Don’t make this a problem for your manager.  A career-launching client recently told me about studying at the library during finals week and noticing that about 80% of the other studiers’ screens were on Facebook.  I’m just going to assume they were taking a short break.  Hmmmmm.  Be respectful of the culture of your organization.

Help others in your organization understand how these are valuable tools for you.  Help them get started using these tools.  Showcase success stories where things you were able to learn about/from “friends” using these tools have positively impacted a project, sales call, recruiting opportunity etc.

You are uniquely qualified to provide a huge value add to your organization by helping them leverage the power of these tools in new, creative and effective ways.  In these difficult economic times, creative thinkers have opportunities to significantly impact their organizations in wonderful ways.  Be part of the solution.

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