If you want to retain your millennials, ditch the office hierarchy
To retain top millennial talent, organisations need to do more than merely burnish their image, talk about work-life balance, and add a ping-pong table.
If a company is really serious about retaining millennials, they need to transform their company structure. And that might mean ripping it up and starting again.
The corporate struggle to retain millennials
Millennials now constitute a large part of the workforce. And they’re vital because they increasingly have the skills that businesses need to compete in our modern economy. Organisations know that they need these talented young people to succeed. But they struggle to get to grips with what millennials want, how to attract them and how to retain them.
For employers, the evidence makes for uncomfortable reading. Many millennials don’t stick around for long. In fact, 91 per cent of millennials expect to stay in a job for less than three years, according to a survey conducted by Future Workplace.
Many employers have found it difficult to develop a successful strategy to retain millennial employees
If millennials don’t find their employment meaningful, or they can’t see an obvious purpose in their job, 37 per cent will leave, according to a ManpowerGroup survey. In addition, executive-level millennial employees are very ambitious. The same survey found that 50 per cent of executive-level millennials would move company if they couldn’t see an opportunity for advancement in their current organisation.
Many employers have found it difficult to develop a successful strategy to retain millennial employees. To attract them in the first place, they’ve focused on putting their corporate missions front and centre. And this makes sense. Data shows that millennials increasingly want to work for companies that align themselves with their values. But, at the same time, employers haven’t put enough effort into how they’ll retain these same workers — hence the millennial exodus after only a few months or years.
It could be your hierarchy that’s the problem
In my view, the problem lies in the fact that many companies still operate with rigid hierarchies.
Millennials have grown up in a world that has been flattened by the Internet and social networks; in a world where hierarchical structures have been stretched and questioned. For example, it is now possible for people to ask questions — and attack — not only celebrities and politicians but company bosses in real time on social media. This has changed many younger people’s expectations around the workplace, and their role within it.
According to PwC, 65 per cent of millennials now say they feel that rigid hierarchies and outdated management styles fail to get the most out of them.
This needs to change. Millennials increasingly want to challenge lines of management and overcome hierarchical bureaucracy. They want to present their own ideas and approaches about how to do their work, and not have these things dictated to them. They want flexibility; to work as part of a team, and crucially they want immediate and ongoing feedback.
Flatter structures will help your other employees too
But aren’t rigid hierarchies a way of life? Haven’t they developed because they are the most effective and efficient way to run an organisation? Don’t they guarantee that managers have oversight, control, and responsibility for performance? No, no, and no.
Flatter organisations provide employees with more opportunities to question conventional ways of doing things
It can be tempting to think that rigid hierarchies increase company performance. But the data shows the exact opposite. For example, academics at the University of Iowa and Texas A&M followed more than 500 factory employees who worked in self-managed teams and determined that this structure resulted in better performance — both at the individual and team level.
Flatter organisations provide employees with more opportunities to question conventional ways of doing things — and this often results in better and more innovative solutions to workplace challenges. It make companies more adaptable. Authoritarian organisations, with command-and-conquer managers who just want their teams to do the job the way it’s always been done, often don’t have the breathing space to experiment in the same way, so they can fail to innovate and grow stagnant.
Companies that strip out and simplify management structures not only get to appeal to important millennial workers, but — as a direct result — they could improve their organisational performance too.
Flatten the organisation and drop the rigid hierarchy
It’s easy to say we need to change our organisational structures. But how do we actually do it?
Hierarchies have been the rule in management for the last century, so it’s not going to be easy to move to a flatter, team-based system. One of those challenges will be making sure that the team can collectively adapt and react to internal feedback. Run themselves, so to speak. The risk is that without a single all-powerful manager, that the team becomes stagnant and resistant to change.
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But, fortunately, technology can provide us with solutions to these new problems.
I strongly believe that teams can self-manage, but to do so they need the tools to understand what they are doing right and what they are doing wrong. They need feedback. In practice that means two things: first, they need to know what other team members think about the team’s performance, and, secondly, they need to know what other teams think of their performance. This information can play the role that the manager used to play — providing the team with feedback and data to respond and adapt to. A digital therapist or coach, if you will, available in real time, all the time.
Transforming organisational structure will not be easy, even with the latest digital tools. But millennial workers are no longer a ‘nice to have’; an optional extra. They are the key to building companies that appeal to the next generation of customers and clients.
The organisations that get their millennial strategy right today, flatten their structures, ditch the hierarchies and use the latest feedback tools, are very likely to be the only ones that succeed long term.
Ab Banerjee is CEO and Founder of ViewsHub, the team-to-team ratings and feedback platform. Find out more about ViewsHub at: https://viewshub.com
