As baby boomers near retirement and Generation Xers move well into their careers, millennials are fully in the labor market and have a unique career approach. Millennials include anyone born between 1981 and 1997—meaning they range anywhere from 23 to 38. Although millennials have a reputation as job hoppers, studies actually show that this generation has a longer track record with employers than Generation X members did at the same age.
According to Pew Research, millennials represent the largest generation in the U.S. labor force (35 percent in 2017). And with a low unemployment rate, now 4 percent according to the Bureau of Labor Statistics, financial services leaders may feel as though they face an uphill battle to attract and retain strong talent from this generation. The good news is that financial services and insurance rank among the top industries millennials consider when switching jobs, according to LinkedIn.
But competition is fierce in the financial services industry with the rise of fintechs and other non-traditional organizations. To attract and retain top millennial talent, financial services leaders should build strong employee relationships from the start through professional growth, proper training and employee engagement opportunities.
Engage millennials in professional development training
Many employers still face obstacles in meeting the wants and needs of this generation. In a 2018 survey, LinkedIn identified “getting employees to make time for learning” as the top challenge facing talent development. Yet 94 percent of employees say that they would stay at a company longer if it invested in their career development. To address this gap between company efforts and employees, industry leaders should implement or increase awareness of professional development programs.
BAI’s research on talent management in financial services found that employees are three times more likely to leave an organization that lacks a leadership development program. The study also found that aside from salary, the opportunity for career advancement is a top reason why employees would consider leaving their current employer. And contrary to what many may believe, general satisfaction with career development in financial services decreases over time.
By not focusing on existing employee engagement, financial services leaders put their organizations at risk of feeling like they are on a “treadmill” of hiring new employees. This in turn can lower operational efficiency and likely lead to using more resources than associated with incorporating employee engagement activities. Companies with engaged employees experience lower turnover; improved productivity, service and teamwork; better communication; and a greater propensity to go above and beyond in the workplace. Additionally, many studies have found that engaged employees often generate higher customer satisfaction, placing even more importance on the value of focused engagement strategies. According to a study published in the International Journal of Business and Management, “Engaged employees are emotionally attached to their organization and highly involved in their job with a great enthusiasm for the success of their employer, going the extra mile beyond the employment contractual agreement.”
Keys to attract and retain millennial talent
Three key areas particularly resonate with millennials: career development, leadership programs and proper training.
With many ways to approach career development, talent managers can be easy overwhelmed. Mentorship programs are an easy and effective way to kick start this approach. The 2016 Deloitte Millennial Study found that those who intend to stay with their organization for more than five years are twice as likely to have a mentor (68 percent). Financial services leaders should consider establishing a formal mentorship program to ensure no employee is left behind.
Other effective methods include offering rotational programs, which give employees an opportunity to try new job functions and identify the best departmental fit within the organization. Another approach involves changing annual reviews to quarterly meetings. This provides leaders the opportunity to have more frequent performance and engagement discussions with employees.
BAI research indicates that 54 percent of employees are unaware of leadership development opportunities within their financial services organization, even though most human resource professionals indicated that the organization does in fact have one. If you already have leadership programs in place, make sure they are well known, and find unique ways to encourage employees to participate.
Consider thinking outside the box. According to our research, millennials in financial services cite ethics and values as one of their top areas of satisfaction with their employers. Financial services leaders can use that starting point to draw engagement. You can do this by organizing a “give back to the community day,” which encourages employees to do something positive for the community as they represent the company.
While this may seem like an obvious or easy task, BAI research found that less than one third of financial services employees feel strongly that they have the necessary training to do their job. To address this issue, look at providing opportunities for professional skills training. Different from professional development training, professional skills training will help employees gain the knowledge they need to do their current job. When employees have the proper training, leaders give them confidence to do their job effectively.
Professional skills training can also help those in financial services build and maintain stronger customer relationships; convey deep industry knowledge; and instill a sense of pride in their work. Organizations can benefit greatly from retaining service-focused, passionate employees, making an investment into building their business more than worthwhile. Additionally, happy employees represent an invaluable asset when recruiting new talent. Our research indicates that increased engagement means a greater likelihood of referrals, an especially strong advantage to have in a contracting labor market.
Rather than worry about millennial employees leaving after investing in their development, industry leaders should approach their development and engagement as an important business strategy. Addressing these concerns can help any organization build loyalty, trust and longevity with their workforce. Millennials are the largest generation in the labor force and in financial services, retaining them feeds the success of an organization and the industry, now and in the future.
Want more Banking Strategies? Sign up for our free newsletter!
Karl Dahlgren is the managing director of research at BAI.
Learn more about how BAI Talent Management Benchmarking provides you with answers to your strategic talent management questions.