The Millennials Are Coming, and Boards Need to Get Ready
The Millennials are coming to the corporate workforce, in droves. Is your board of directors prepared?
The members of the generation born roughly between the late 1970s and the early 2000s comprise the fastest-growing segment of the labor market. As such, their increasing presence at the office raises all kinds of policy issues for companiesbeyond laments over how to tolerate the quirks of the ME generationthat range from topics like talent management and compensation to social media.
These issues require thought leadership from company directors, too, according to panelists at the Women Corporate Directors 2012 Global Institute, held this week in New York City.
First, what sets this generation apart from their Gen-X and Baby Boomer forerunners? They expect constant stimulation at work, and they want constant feedback, says Jannice Koors, managing director at compensation consultancy Pearl Meyer & Partners.
And forget waiting their turn for access to the powers that be. Millennials want to share their opinions, and they want to be heard by the CEO from Day 1, notes Kathy Kane, senior vice president for talent management at Adecco Group North America.
She also stressed that Millennials arent afraid to hop from one company to another, a la the milieu in Daniel Pinks book, Free Agent Nation. Kane recommended that boards have a talent management committee to make sure they are placing the right people in the right job at the right timeand at the right cost.
And dont forget that compensation committees arent limited to just thinking about executive compensation, says Koors. She encouraged board members to consider HR policies and their impact on the company, broadly.
For example, many businesses are still clinging to holdover policies from the manufacturing age that are out of sync with todays changing workforce, she says. Those relics include rigid hours and requisite face time; formal annual review processes, in which companies spend an inordinate amount of time and resources telling workers that theyre average; and hierarchical pay structures.
We overvalue tenure relative to contribution, Koors says.
The Millennial challenge for boards, then, is to ask: Are we doing these things because they makes sense, or because this is way weve always done it? As for paying higher wages to younger employers based on their skills sets, All of us 50-year-olds are going to have to get over that, she says. And on revamping the formal review process, she reminded the audience that Millennials want to be able to give feedback as much as they want to receive feedback.
Social media policies also need to account for how Millennials use online networks. KPMG is in the process of updating the companys social media policy, says Nancy Calderon, national partner in charge for operations and chief administrative officer for KPMG Americas.
One of the biggest concerns they are wrestling with, she says, is whether or not we should allow our employees to friend a client. The risk is that Facebook friending could create a potential conflict of interest, Calderon says.
When it comes to blogging and tweeting by employees, another issue that arises is how to combat the perception that employees are giving advice on behalf of the company. She suggested one possible solution is to make more use of disclosures that state all these views are my own and not affiliated with my company or my board.
She also advised boards to start a technology committeeand to make sure that young people are represented on it.
After the panelists had enumerated the many changes they recommended be made for a Millennial-heavy labor force, one audience member finally asked if companies could ever deny the Millennials what they want. Wheres the pushback?
Kane said to remember that Millennials dont just make up a rapidly growing segment of the workforcetheyre also most companies rising customer base. Its what your products and services need to be, she says. Its a new world and we have to behave differently.