How to Retain Generations X and Y

How to Retain Generations X and Y

by Sarah L. Sladek

It costs a company between $7,000 and $17,000 to replace a typical employee, and Generation X (1965-1981) and Generation Y (1982-1995) employees boast the highest turnover rates at an average stay of 20 months per job.

Unless businesses take steps to retain young employees, they could lose a competitive edge to other companies.

To retain and engage bright, young talent, employers need to do more than increase payroll and expand benefits. Employers need to consider young employees' life-stage needs and values.

Here are some ways companies can retain their Gen X and Gen Y employees.

1. Appreciation

Xers and Yers often leave jobs when they feel their hard work and efforts go largely unnoticed. Even something as simple as a handwritten thank you note or a traveling employee of the week award goes a long way to make them feel valued.

2. Compensation

Money isn't the primary motivator for Xers and Yers, but that doesn't mean it isn't important. Employers are creating incentive pay programs to align compensation with performance. Others give employees extra paid days off or partial payment of their car leases.

3. CEO meetings

Generations X and Y want to know their leaders. Some companies set up coffee breaks or lunches where employees can meet with the CEO in small groups. Others regularly host employee events featuring a motivational address from the CEO and other members of senior management.

4. Elder care programs

Most Xers and Yers soon will find themselves caring for aging relatives. Elder care programs provide families with resources and referrals to services, flex-time options, counseling and other support systems specifically geared toward this situation.

5. Employee empowerment

Xers were raised to be self-sufficient, and Yers were raised to be high achievers. Employers are giving them more authority via self-managed work teams where employees can take turns leading, develop new products and have more decision-making opportunities.

6. Parenting classes

Many young employees are parents, which makes employer-offered parenting classes attractive. It's also not unusual for employers to provide confidential access to family therapists and marriage counselors at significantly reduced rates.

7. Social opportunities

Xers and Yers like to create friendships with their peers at work, which is why companies are organizing regular social events, such as beach parties and sporting events, to appeal to this age group.

8. Technology

Electronic communication is essential for the younger demographic. It is becoming commonplace to send company notices via text, launch employee blogs, conduct computerized simulations for training, and provide video updates in place of annual reports.

9. Training

Ongoing training is critical in the ever-changing world in which generations X and Y grew up and in which we are all living. Younger generations rank training, including on-the-job coaching and mentoring, as important to their career development.

10. Travel

The growing presence of generations X and Y has generated interest in customized travel. Employers have abandoned cookie-cutter vacation packages and are offering their best workers a menu of activity options, such as adventure- and humanitarian-themed vacations.

11. Volunteer work

Companies are organizing or providing paid time off for employees to volunteer, which supports Gen X's and Gen Y's desire for meaningful work and community-focused service projects.

Generation X and Y employees want to know that, starting on day one of their employment, a company has their best interests and professional development at heart - which is why most of the retention strategies listed here are relationship-focused.

In other words, if a company wants to retain talent, it has to work at building relationships and motivation. Remember: It's the people, not the job, that generations X and Y want to work for.

[About the Author: Sarah L. Sladek is the president and CEO of Limelight Generations and the author of Rock Stars Incorporated: Hiring the High-Performance, High-Maintenance Hotshots Half Your Age.]