What Millennials Want (from the work world)

There is no doubt that the popular press plays a valuable role and enjoys a wider reach than academic publications. Yet it is essential to base any assertions or in-depth observations on solid scientific evidence. To this end, our study offers one of the first rigorous, scientific contributions to further our understanding of Millennials in the workplace, downsizing the role of ‘common wisdom.’

This study is based on the proven relevance of generation as a time period that is a meaningful unit of reference. What’s more, in our work, we offer a theoretical lens to use to understand the differences that relate to age in the context of work. To conduct our study, we adopted a conceptualization of the “psychological contract” as our analytical tool. This refers to the tacit obligation that ties employees to their tasks and to their employers. In taking this approach, we position our study in the research stream on organizational management that focuses not only on formal aspects of contractual relationships, but also on reciprocal promises and expectations, both implicit and explicit, that exist between workers and organizations.

A psychological contract is a tool by which employees and organizations reciprocally express what they’ve come to believe about their relationship. This allows us to see that, based on generational divergencies, a mismatch is likely between the perceptions of managers and their younger employees.

To understand how relevant dimensions of the psychological contract have changed from one generation to another, we analyzed the key characteristics that distinguish Millennials from previous generations, collecting data from more than 1,000 employees in a large Italian company through an online survey. We then compared our findings from the Millennials in our sample with responses from another group of 150 Millennial workers surveyed online without revealing significant differences.

On the basis of our analysis, we formulated hypotheses on Millennials, Generation X and Baby Boomers with regard to the importance they attach to the following aspects of the psychological contract: high pay; pay for performance; training; job security; career development; power and responsibility; social atmosphere at the workplace; and work-life balance.

Then we built a framework which incorporates two new dimensions of the psychological contract that are more in sync with the values and concerns of Millennials. These two factors have never before been investigated in previous studies: feedback and work meaning.

We discovered that in contrast to the dominant narrative, the relative importance of various dimensions of the psychological contract are similar from generation to generation, for the most part, with job security, training and social atmosphere ranking highest on the list both for Millennials and for older workers.

The main generational difference that our findings reveal is that Millennials generally have higher expectations than Gen X or Boomers. And this holds true for all the dimensions of the psychological contract we investigated, with the exception of pay for performance and work-life balance, where there is a marginally significant discrepancy. “Generational prejudice” is the label we used for this dissimilarity in expectations.

With our study, on one hand, we provide insightful evidence that confirms, at least in part, some widespread convictions we find in popular literature based on anecdotal evidence. For example, it is true that Millennials tend to expect more than older workers do. But on the other hand, our results chip away at some consolidated viewpoints, highlighting the fact that Millennials are paying more attention to job security, a consideration they take seriously. Our findings also underscore the central role of work itself within the context of their lives.

Our results also show that Millennials and non-Millennials differ in their expectations regarding the extent, rather than the content of a job. However, their priorities are similar, as they rank job security and train consistently at the top. At the same time, Millennials have significantly higher expectations in general.

Further research on Millennials in various organizational contexts and in different countries is fundamental to enhance our understanding of the current trends underway, as is an analysis of younger generations, in particular Generation Z (or gamers), who account for a sizeable slice of the workforce.

Our study has numerous practical implications. A vast number of articles offer practical advice on how to manage Millennials on the job to enhance their potential. The sheer number alone goes to show that this is a very pressing matter for companies. Yet our research only confirms this in part, seeing that as far as priorities, Millennials and previous generations share very similar ones. So we can assume that this is probably a cyclical problem that emerges every time a new generation enters the job market. However, our study can help managers gain a better understanding of the needs of Millennials, and to design and develop specific actions to recruit, manage, and retain talented young people from this generation.  

Many organizations hesitate to invest in training and developing their Millennial employees because they are afraid that a number of these young people will leave after a short stint in the company.  But our research shows that Millennials, beyond prioritizing job security, also value training and career development, as opposed to high pay, work-life balance and responsibility. In light of this finding, organizations should invest more in training and development if they don’t want job-hopping to become a self-fulfilling prophecy.