Millennials, the generation whose eldest members are now staring down the barrel of 40, are a sometimes misunderstood and occasionally maligned group. Known for various attributes, most notably adeptness with social media and digital technologies, this well-educated and ethnically diverse cohort — also referred to as GenerationY—has used its talents and independent thinking to challenge many workplace and societal conventions.
Women millennials, especially, are experiencing unprecedented social and economic impact, being in the majority in professions like law, medicine, dentistry and veterinarian medicine — vocations historically dominated by men, according to Environics Analytics chief demographer Doug Norris. In terms of sheer numbers, millennials are on par with the Baby Boom generation, numbering close to 10 million, or nearly 30 percent of the total population, reports Statistics Canada.
Millennials, it is fair to say, are also poised to take the helm of the Industry 4.0 – the fourth industrial revolution – which describes the trend towards automation and data exchange, including the Internet of things, cloud computing, cognitive computing and robotics.
Born between 1980 and 1995, millennials have also overtaken Baby Boomers as Canada’s largest working generation at 37 percent, according to Statistics Canada 2015 figures. And, with the eldest aged 38, they are now entering upper-tier management. Yet evidence shows them to be fickle, exhibiting far less loyalty than preceding generations.
For credit unions, which are seeing their Baby Boomer employees — born between 1945 and 1964 — already gone or heading for retirement pastures, managerial and executive leaders must now be mined from the millennial vein. Future success, in other words, will be dependent upon how well credit unions can attract, nurture and hang on to these 24- to 38-year-old dynamos.
How to do this? Work/life balance, as well as flexibility in the workplace, are important to millennials, with 65 percent preferring to work away from the office, either from home or another location, from time to time, according to a Randstad WorkMonitor Q1 2018 report. As a generation, they also exhibit strong ethics, demanding transparency and a strong social consciousness from the business world.
It is this grounding that bodes well for strong synergies between credit unions and millennials but only if credit unions can satisfy the cohort’s personal financial needs.
As a generation, they also exhibit strong ethics, demanding transparency and a strong social consciousness from the business world.
Marie Mullally, CEO of Credit Union Atlantic (19,597 members, $486 million in assets), is enthused about the leadership qualities being shown by millennial employees. “They are high energy, engaged and well aligned with the values of social responsibility and cooperative principles,” says Mullally. “They have a strong desire to understand what they are doing.”
A key millennial attribute of benefit to future credit union operations is their adroitness with technology. If a new tool offers the potential of better functionality — even if there is a transition cost — they willingly make that switch. The other side of the coin is: millennials, as a generation, show less brand loyalty, due in large part to growing up surrounded by rapidly changing technology, the Randstad report states.
Conditioned while growing up to intuitively and proactively find a solution to problems rather than referencing a handbook or waiting for instructions, millennials will also google information or text a friend in the middle of a meeting to get a quick answer.
Should I stay or should I go?
Millennials’ reputation for a dearth of loyalty towards employers is supported by statistics. The 2018 Deloitte Millennial Survey, based on the views of 10,455 millennials in 36 countries as well as 1,844 members of Generation Z from Australia, Canada, China, India, the United Kingdom and the United States, reported that 43 percent of millennials envision leaving their jobs within two years. Only 28 percent plan on staying more than five years. The younger Gen Z cohort — born between 1995 and 2012 — shows even less loyalty, with 61 percent stating that they are planning to leave their place of work within the next two years.
Why the willingness to jump ship? According to the Deloitte survey, there is a lack of alignment between millennials’ personal priorities and what they perceive as their employers’ motivations — such as a focus on profit. Millennials believe that societal leaders should commit to making a tangible, positive impact on the world and show greater loyalty towards employers who prioritize innovation and societal improvement.
Incongruously perhaps, millennials’ top priority at a company is financial compensation. This is largely due, the survey found, to the stage of life many millennials are at: they have young, growing families and are house hunting or shouldering hefty mortgages. A Vancouver City Savings Credit Union (499,039 members, $22.2 billion in assets) 2016 report, Arrested Development, the impact of affordability on millennial living, also found that student debt and the high cost of home ownership act as barriers to true workplace choice. On average, 26 to 34-year-olds today spend more than 23 percent of their household income on shelter, compared to 19.5 percent in 1992. This cold reality forces millennials to betray some of their social values.
So, while millennials consistently cite an employer’s social responsibility as important, they still prioritize conventional factors including compensation, the quality of their manager and advancement opportunities.
“One area that we consciously try to work on is helping them manage their expectations for career progression.” – Sheri Hamilton
Nonetheless, prioritizing a generous salary is consistent with their belief that employers should enhance workers’ lives, provide good jobs as well as well as “share the wealth,” according to the Deloitte survey — things that come straight out of the credit union corporate social responsibility handbook. It is important to acknowledge, the survey noted, that millennials are “pro-business,” while expecting business leaders to make a positive impact on the world and commit to making a clear, definite impact on society. “Companies and senior management teams that are most aligned with millennials in terms of purpose, culture and professional development are likely to attract and retain the best young talent and, in turn, potentially achieve better financial performance,” writes Michele Parmelee, Deloitte’s global managing principal for talent, brand and communications.
However, another survey supports the need to better communicate credit union and millennial synergism. The Canadian Credit Union Association’s 2017 National Awareness Survey found that the local community ethos of credit unions was an irrelevant differentiator, while access to no-fee ATMs or dividends was a relevant differentiator that impacted consumer behaviour.
Sheri Hamilton, associate vice-president at British Columbia’s Salmon Arm Savings and Credit Union (19,262 members, $694 million in assets), says that credit unions need to support millennials in another key area. Often, members of this generation don’t have a wide breadth of job experience to lean upon when starting with a new employer. Hence, it is critical to establish expectations early on and lay out a plan that will ensure they excel, enabling them to move up the corporate ladder within an organization, Hamilton says.
“One area that we consciously try to work on is helping them manage their expectations for career progression,” says Hamilton. “We do that in the interview process and work with our managers to create realistic yet challenging development plans, encouraging job shadowing and cross-training. This is important not only for engagement but retention.”
For a millennial to want to commit long term and not test the job market to see if there is a better opportunity for both compensation and fit, they need to feel that they are growing in their job and deriving personal satisfaction from it, Mullally adds. To achieve this, there is no one-size-fits-all approach. Personal development is “an organic process,” says Mullally. “We figure out a path that we think is the right path to match their skills and passion.”
The Deloitte survey further supported how signicant career development for millennials is and especially how important preparation for the changes inherent in Industry 4.0 are. Few younger workers, the survey found, feel prepared, yet they are ready to embrace the 4.0 changes that free them from mundane, routine tasks, allowing them to pursue more creative, value-added activities.
Enormous workplace changes are predicted in the near future and millennials will be part of how well credit unions adapt. Credit unions’ socially conscious, community-minded principles and business savvy should help attract this talented and high-minded millennial generation — boding well for the future of both within the system of financial cooperatives. ◊
Millennials: A Financial Snapshot
It isn’t just millennial employees that credit unions must attract, it is also millennial members. Not only is this generation the largest in Canada, it also holds substantial wealth, holding $824 billion in assets in households where the main income earner is under 35, according to Statistics Canada 2012 figures.
Millennials, however, are reluctant investors, according to Missing Out – Millennials and the Markets, a 2017 study by the Ontario Securities Commission (OSC) Investor Office that surveyed 1,585 Ontarians aged 18 to 36. Why? Many were affected by the 2008-2009 financial crisis, which occurred around the same time they were graduating high school and trying to find a job. This has made them, according to the OSC, the most fiscally conservative generation since the Great Depression, holding larger percentages of their savings in cash than previous generations. This means that six in 10 worry about losing money and three in 10 don’t trust big banks or investment firms, states the report.
Other findings from OSC include:
- From 2011-2016, home ownership among those 35 and younger fell by nearly four percentage points, due to the rising cost of residential properties. Nonetheless, home ownership rates are consistent with those in the 1980s and 1990s.
- Mortgage debt represented nearly 80 percent of the debt held by households under 35, according to the Statistics Canada study, Survey of Financial Security (2012).
- Among households under 35, 63 percent said that mortgage and housing costs leave them cash poor, while 57 percent are worried that rising interest rates will make it harder to meet mortgage payments.
- Four in five millennials are saving but only one in two are investing. As millennials’ savings accumulate, they are more likely to put it aside to decide what to do with later.
- Millennials often feel overwhelmed by investing, with 51 percent saying they would settle for lower returns if it meant less volatility. Six in 10 millennials say that they don’t invest due to a lack of knowledge.
- More than 30 percent of millennials invest on their own without the advice of an investment professional due to what they perceive as high fees and the need to hold a minimum amount in an account.
- Due to their comfort with technology, millennials use online discount brokerages or low-cost fintech services.