The modern workplace is evolving rapidly, with a new generation of employees emerging. Millennials (born 1981-1996) and Gen Z (born 1997-2012) are the youngest generations in the workforce, and they present unique challenges for CEOs looking to attract, onboard, train, and retain top talent.

These generations have very different expectations, values, and needs than previous generations, and companies must adapt to meet these demands if they want to keep these employees.

Today’s talent management challenges

Here are some of the biggest challenges that companies face today with their talent management.

1. Competition for Talent: Gen Z and Millennials are the most educated generations in history, and they have high expectations for their careers (or work-life). Companies are now competing for the best talent which is driving up the cost of attracting the right candidates and keeping them onboard.
2. Work-Life Balance: Gen Z and Millennials prioritize work-life balance (or, as they see it, life-work balance). They want to work for companies that offer flexible schedules, remote work options, and opportunities for professional growth
3. Purpose–Driven Work: These generations want to work for companies that align with their values, and contribute to society in a positive way. They are attracted to companies that have a clear mission and purpose, beyond making a profit.
4. Up-to-date Technology: Gen Z and Millennials grew up with technology, and they expect their workplaces to be equipped with the latest tools and software. Companies must invest in current technology to attract and retain top talent.
5. Diversity and Inclusion: These generations value diversity and inclusion in the workplace and want to work for companies that prioritize these values (institutionalizing them, and being open to improving in this area, rather than just talking about DEI). Companies must create a culture that is inclusive and welcoming to all employees.

These challenges represent a sea-change in the culture of the modern workplace (in the U.S.) Culture is one of the most difficult and elusive aspects of the work environment, which means it’s difficult to change. But bad cultures are the reason for most employee churn.

Donald Sull, a senior lecturer at M.I.T. Sloan School of Management, co-authored a study on employee attrition which found that a toxic corporate culture was 10x more likely to contribute to attrition than compensation.

While there’s no standard definition of a toxic culture, it can be characterized as having the following characteristics:

1. Lack of respect for all employees
2. Accepting of bad or abusive behavior from managers
3. Acceptance of back-stabbing or unethical behavior among colleagues
4. No consideration of stress levels among all employees

What happens when there’s a toxic culture? Those employees who have talents they can use elsewhere will leave. And once an employee leaves because of a toxic culture, employee turnover can be contagious (Visier Insights Report). “When a resignation occurs, employees on that team are 9.1% more likely to leave.”

The following graphs the likely contagion effects, by team size.

A toxic culture will also lead to unfavorable reviews on Glassdoor, which will change the front door of an organization into a turnstile at the front door. A toxic company festers, with the bad players staying and the good players leaving as soon as they can.

Are you having challenges in your workforce today? Have your activities to date helped? If not, contact us and let’s talk!