Lately, I have noticed an increasing amount of my peers and colleagues quitting their jobs or even doing some job hopping. So I asked myself why so many companies have been struggling to attract and retain millennial talent. Older generations are quick to judge millennials, calling them lazy, but maybe the companies for which they work are to blame for their low retention rates.
So…why DO millennials want to quit their jobs? According to the fifth annual Global Millennials survey, cited on Bloomberg, (for which Deloitte reached out to nearly 7,700 working college-educated professionals in 29 countries), the data collected reveals a common theme among this group–they are not happy with how their leadership skills are being developed. While 71% of those likely to leave in the next two years are dissatisfied with how their leadership skills are being developed, that number drops to 54% among those who are planning to stay beyond 2020.
Why aren’t millennials happy with the way their leadership skills are being developed?
Maybe it has to do with the flattening of corporate hierarchies. The practice of “flattening” organizational hierarchies — a way of improving efficiency by stripping out levels of bureaucracy — has removed from many companies the ability to climb rungs in a corporate ladder, which used to serve as a primary motivation for performance. It is this disappearance of traditional career paths that weaken incentives to stick around.
Why would a company flatten their organizational hierarchy?
In an effort to cut costs and improve efficiency, many companies put in effect a process called “delayering,” which simplified the executive structure by removing positions from the organizational hierarchy. According to CEB, delayering picked up steam after the Great Recession in 2010. The lack of corporate rungs available for our millennials to climb is a symptom of this trend. Now, employees globally cite lack of future career opportunities more than anything else as the driving factor in their decisions to quit.
Why don’t companies restore a semblance of organizational hierarchy?
Now that digital disruption is causing companies to innovate rapidly, companies are opting to decentralize authority to create a “network of teams” that will communicate and coordinate activities in unique ways. Many companies have moved away from functional structures: Only 38 percent of all companies and 24 percent of large companies (>50,000 employees) are functionally organized today.
Although there are other factors that play into the lack of employee retention so many companies are seeing, such as low salary rates, lack of company culture, etc., the main problem here is that millennials have nowhere to go. They are forced to leave their jobs from a lack of corporate ladder. No one wants to stay in the same position, with the same low salary with nowhere to go but sideways. Companies need to provide ways for employees to enrich their experience and develop useful skills in order to gain their loyalty. Introducing mentoring programs in which workers are paired with leadership or rotating employees through different jobs to allow them to gain new knowledge and expertise are a great start to providing millennials with the intellectual challenges they so desire.