Originally Published in Supply Chain Management Review | June 11, 2015 | By Audrey Ford
Editor’s Note: This guest article addresses our industry’s need for attracting and recruiting a talented workforce. For more information on employment opportunities, check out our Job Board.
It’s time for Chief Procurement Officers to cast aside any preconceived notions of their millennial employees and take a hard look at one of the fastest growing segments of the workforce today.
Many describe this group as entitled, unmotivated, and unable to stay in one place for long. Others say millennials have strong voices that should be heard, as well as an even stronger connection to trends, given their tech-savviness and ability to network with social media.
But being a millennial doesn’t just mean being computer literate and hungry for constant change. Being a millennial also means adapting to other generational ways of thinking. While many senior-level executives are re-examining HR practices and training models in order to accommodate the needs of this generation, others believe the millennials are the ones who have catching up to do.
Here are some of the most important things for Chief Procurement Officers to keep in mind about managing their millennial workforce.
Older Generations May Alienate Millennials
The question of how an older generation senior-level executive will manage a millennial worker is one that has come up recently in my conversations with Chief Procurement Officers. When asked about the biggest obstacle in millennial management, Jeff Scott, Chief Procurement Officer at RTI International, argued that older generations may be resistant to change, which can alienate millennials and make their desire to “jump ship” even stronger. A recent report published in Millennial Branding shows that 45% of companies experience high turnover with those employees identified as “millennials” compared to older generations by a 2:1 margin.
Retaining Millennial Talent
The question then becomes how to retain top millennial talent. In fact, talent retention is one of the top agenda items for CPOs today. In a recent Consero Group survey conducted with 45 CPOs at an event earlier this year, 72% of executives did not see a sufficient pool of trained procurement talent available to support hiring needs.
While procurement departments are prioritizing talent retention overall, they are zeroing in on the turnover rates of their younger workforce. According to Jeff Scott, the difficulty in managing and retaining millennials is that they have a hard time maintaining the perspectives and values of older generations. Values around what defines work ethic differ generationally, he argued. One example given was the idea of working outside of the normal 9-5 routine in order to prove oneself and ultimately move up in the company. Not all millennials see the benefits outweighing the costs of this practice. Diving into the psychology behind different modes of thinking may shed light on this divide in values.
Companies Should Embrace Millennials’ “Growth Mindset”
Carol Dweck, author of Mindset: The New Psychology of Success, compares two different ways of thinking in the world – a “growth mindset” and a “fixed mindset”. The growth mindset is fueled by the idea that if you work hard, you can acquire new skills. The fixed mindset believes that skills and abilities are fixed. One CPO said that when the millennial’s growth mindset is not embraced by the company culture or management, many problems can arise. Namely, that millennial worker will be lost to a different company that fosters a management culture that embraces change.
Older Generations Can’t Be Left Out
Creating an entrepreneurial culture in your company with the aim of attracting and retaining millennials is one proposed change for older members of management. At the same time, how do CPOs and other executives ensure that veterans of the company with that so-called “fixed mindset” are not left out in the cold? The answer is that older executives need to drive change to retain millennials. Alan J. Rice, Vice President of Corporate Procurement at Southern Wine & Spirits of America, Inc., suggests that “If we’re not driving these changes, they’ll go to other companies that are at the forefront of these issues.”
New Training Models Help Millennials Adjust
What does embracing change mean for an older generation of management eager to adapt to millennial demands? First, it helps to identify what millenials’ demands are, such as more flexible working hours, room for upward growth, more responsibility and embracing technology to streamline core job responsibilities, among others. Many companies are implementing new training models and incentives to keep millennials around, but it remains to be seen if these programs actually will impact retention. The impact of these new programs will become even more apparent when one considers that the aforementioned Millennial Branding study found that 87% of companies estimate the cost to replace a millennial employee to be between $15,000 and $25,000.
Corporate Culture Drives Comfort Across Generations
As Alan J. Rice put it, “Millennials are inheriting it all, so managers have to be flexible to them.” There are many perspectives on how to address managing millennials, particularly in the procurement space. At Consero’s upcoming forum taking place this July 26-28th in Newport Beach, CA, this and other important questions will be discussed as scores of CPOs from across all industries will convene to tackle their most pressing leadership issues. “The challenge is and always has been a question of company culture and how to change that so that you can change the practices that keep people, not just millennials, engaged in their jobs, and believing their mission is mirrored by their company,” Rice offered.
As a millennial myself, I agree that company culture can drive whether management makes a case for new programs that are designed to keep millennials engaged. Perhaps you can teach an old dog new tricks, if that’s the case. The true challenge will lie in the willingness of multiple parties to learn from each other and move toward compromises that benefit the company and align the objectives of differing generational perspectives.