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.

Comments

One Response to “Gen Y Retention in a Tough Economy”

  1. Kate on November 4th, 2008 11:08 am

    Good points. While previous generations stayed in their first jobs for four years, Gen Y stayed for just two. A recent study found that only 40% of Gen Ys are satisfied with their current jobs. Smart HR professionals aren’t just asking how to hire Gen Y and retain them, but ultimately what this generation is looking for.

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