If you can't promise new college grads a chance to save the world, how do you get them to stick around?
A growing number of employers are trying the carrot-and-stick approach. Restructuring their 401(k) matches and vesting schedules to entice new employees to stay until the richer benefits kick in is one way. To improve retention, Ernst & Young in 1999 began doubling its match after four years of service to 3%. Today, it boasts the best five-year retention among Big Four firms: 34%. Although that still leaves a lot to be desired, the savings in recruiting and training expenses are significant.
By making a big impression when it matters most, employers can get their young charges over the hump and, with luck, motivated to stay on for many more years. KPMG paid out an average of $4,300 in performance bonuses to entry hires in their first year--nearly 80% of employees got the bonuses in 2007, up from just 10% in 2006.
One reason high pay alone is no longer enough to guarantee loyalty is that many members of Gen Y, who have been entering the workforce since 2004, have other priorities. For them, issues such as community service and serving the greater good are among the most important, according to the 2008 Universum USA survey of U.S. undergraduates. That's an inversion of their Baby Boomer helicopter parents' priorities, and particularly good news for nonprofit and government employers.
Money is all well and good, but nothing says "stay for the long haul" like a promotion or having a chance to work with nonprofits (for a shot at saving the world without sacrificing their jobs). Whirlpool is now giving employees a chance to fast-track their careers by offering them opportunities to work on special projects that will enhance their skills, thus making them eligible for promotions earlier. "The more opportunities we can provide our employees to engage in meaningful work and challenging assignments, the more quickly we can help them achieve career goals," says Jeff Beavers, Whirlpool's director of global university relations.
For many new college grads, nothing gets the juices flowing quite like a chance to speak truth to power. Mingling with top executives and having their ideas heard by senior managers is particularly important to Gen Y workers.
Some companies have even begun taking on the role of surrogate parent to attract and retain a generation often criticized as being far too dependent on mom and dad. Some companies now finance your move, help you pay for that laptop you can't afford, or even pick up the full tab for graduate school. IBM even brings in financial coaches to advise young employees.
Source: BusinessWeek, September 15, 2008
