It’s estimated that Millennials, or Gen Y, will comprise more than 40% of the workforce by 2020 (WSJ/U.S. Bureau of Labor Statistics).

Generally defined as the generation born between 1980 – 1995, they are digitally savvy, highly collaborative, and bureaucracy adverse. They’re driven and hardworking, but not in the way companies are used to. Oft maligned as lazy, impatient and entitled, their work style challenges the conventions of talent acquisition and retention, and the impact can already be felt.

As boomers retire, the skills gap widens, and competition for top talent grows, it will become increasingly important that companies place this generation’s expectations at the heart of their talent management strategy. They must understand that Millenials (and the changing workforce around them) expect the ‘Total Package’ when it comes to offer negotiation, and that financial incentives alone are an increasingly ineffective differentiator.

So what do they want?

In Silicon Valley’s ongoing war for the best tech talent, for example, candidates increasingly consider the value of their work and the experience they’ll gain above all other criteria – including financial compensation – when evaluating a new job opportunity. Andrew Wilkinson, founder and managing partner of our Northern California office explains:

People in the Bay area are cognizant that options are important.  They target companies with those opportunities that go beyond compensation.  What employers must know is that engineers in the Bay area are all about solving problems–engineering problems.  Beyond just the financial compensation, they want the challenge and satisfaction of building from scratch or ground up, and they want to tackle interesting software problems.

This sentiment was echoed in the recently-released PwC 2013 NextGen: a global generational study and in their 2011 Managing Tomorrow’s People/The Future of Work report. In the largest study of it’s kind, PwC surveyed 40,000 global workers – Millennial and Non-Millennial alike – to uncover the new workforce reality and the implications for retention, loyalty and job satisfaction of employees at any stage in their careers.

Here’s what they found:

• 71% of Millennials (vs. 63% of non-Millennials) say that their work demands significantly interfere with their personal lives.

• Career progression is the top priority for millennials who expect to rise rapidly through the organisation. 52% said this was the main attraction in an employer, coming in ahead of competitive salaries in second place (44%).

• Development and work/life balance are more important than financial reward: This generation are committed to their personal learning and development and this remains the most essential benefit they want from employers. In second place they want flexible working hours. Cash bonuses come in at a surprising third place.

• They’re transparent.Almost half (43%) of Millennials say they have discussed their pay with co-workers (vs. 24% of non-Millennials).

• With technology dominating every aspect of their lives, it is perhaps not surprising that 41% say they prefer to communicate electronically at work than face to face or even over the telephone. They routinely make use of their own technology at work and three-quarters believe that access to technology makes them more effective at work. However, technology is often a catalyst for intergenerational conflict in the workplace and many millennials feel held back by rigid or outdated working styles.

• Given the opportunity, 64% of Millennials (and 66% of non-Millennials) would like to occasionally work from home, and 66% of Millennials (and 64% of non-Millennials) would like the option to occasionally shift their work hours.

• Millennial employees want greater flexibility…and so does everyone else.
  Millennials and non-Millennials alike want the option to shift their work hours to accommodate their own schedules and are interested in working outside the office where they can stay connected by way of technology. Employees across all generations also say they would be willing to forego some pay and delay promotions in exchange for reducing their hours.

(By the way, it’s predicted that more than 80% of PwC’s global workforce will be comprised of Millennials by 2016.)

Conclusion

To catch a Millennial, employers must think beyond base salary/benefits and offer flexibility, autonomy, training and development, collaboration, and the opportunity for rapid growth/promotion in the initial stages of the hiring process. (And the promise of global travel opportunities helps, too.)

To retain a Millennial, employers must make their ‘work-life balance’ a priority, too, and follow through on the promises made during the initial hiring process. Millennials are noticeably more transparent and less loyal than their professional predecessors, and their reputation for being ‘entitled’ often stems from this fact. Fail to deliver on their expectations, and they’ll find someone who will.