Feature Article - November/December 2015

Millennial Motivation

Designing Incentives to Meet the Needs of the New Workforce

By Rick Dandes


The growing workplace influence of millennials—that generation generally defined as those individuals born between 1980 and the mid-2000s (exact definitions vary)—has sparked an urgency within organizations to understand their world and their motivations. After all, millennials now represent the largest generation in the U.S. workforce, at 33 percent, said Michelle Smith, vice president, business development, O.C. Tanner, of Salt Lake City, Utah.

"That number surpasses the baby boomer workforce population, which has declined to 31 percent," said Smith, who has written extensively on the subject for the Performance Improvement Council. By 2020, she noted in one of her white papers, the U.S. workforce will flip from 50 percent baby boomers to 25 percent baby boomers and 50 percent millennials.

Millennials rank as the largest generation ever, and they're the incontestable driving force in both the workforce and the marketplace, so the question for executive leadership becomes: How different are they from previous generations? And how can we best manage their performance?

Already the majority population at many organizations, millennials stand to become a tremendous influence on the future of work and the most important consumer generation in history, with an estimated $170 billion in spending power.

There are differences between millennials and baby boomers in the way they respond to programs and rewards of interest. "From a structural perspective," explained Ira Ozer, founder and president, Engagement Partners, Chappaqua, N.Y., "millennials are 'digital natives' and prefer faster, soundbite-sized communications and quick engagement actions."

Boomers are more patient and comfortable with longer-form information and engagement steps. For example, running an all-digital incentive program focused on mobile devices, with quick, gamified quizzes and actions will work more effectively with millennials than boomers, Ozer said.

"From a reward perspective," he continued, "boomers are more likely to be interested in saving award points for larger items that are more substantive and provide 'trophy value' than millennials, who will redeem for smaller awards that are fun and useful."

Millennials might redeem for fun, retro-type cameras, for example, which allow them to take pictures and hand prints to their friends, as well as small housewares that they need for their starter homes and apartments.

"Millennials are masters of their own brand," added Justin Cesler, content manager, Aimia US. "They are technologically dependent, they are educated, and they are in the business of marketing themselves socially every day." In terms of incentive, rewards and recognition programs, Kessler believes they look for more than just a personal reward. They require the reward to also help boost their personal brand. This can be through exclusivity, affiliation or amplification in both the real world and online. "For example," he said, "10 percent off an item is good, but 5 percent off an exclusive item earned through the program is better. An exclusive item is great, but a tweet from the brand and an item is even better! Millennials identify with, and socially partner with, brands that fit into their lifestyle and programs that help elevate them to the next level."

Understanding Millennials

Millennials have unique priorities and, for employers, this can create challenges. Their view of the world is different from any previous generation, and employers need to understand how to build millennials' trust, increase their engagement and win their business.

Considered by many as the most socially conscious generation since the 1960s, millennials tend to be much more tolerant and altruistic. Maybe the reason for that, said Dena Hirschberg, vice president of sales and marketing, of Chicago-based Helping Hands Partners, is millennials have been given positive reinforcement "right out of the gate. They respond to programs emphasizing esteem building. Any kind of negative feedback typically should be given in a positive way. They work, they play and are social, in all these different media platforms. Although they are 'on' 24/7, there is also a work-play balance that is a little bit different from what other generations are used to. A high priority is given on life outside of work."

Having witnessed a variety of corporate scandals firsthand, millennials actively seek authentic leaders and ethical corporate policies as they enter and progress through their careers. They look for inspiration and value accountability.

"If today's business leaders want to connect with millennials," Smith said, "they should embrace clear missions, ethical corporate values and accountability. Millennials want to believe in the organizations they work for and the brands they support, so transparency, authenticity and involvement in altruistic causes rank as important business strategies."

"What we have found," Hirschberg explained, "is organizations that embrace social responsibility as a core value mirror the goals and intent of millennials. So reward and recognition products that are socially responsible— products that the recipient can see having an immediate benefit to the community—are rewards worn proudly by millennials. They want to carry that brand and they will feel good about the company they work for. What is interesting to me are studies that show this is also good for business. Socially responsible companies are attracting better talent, retaining talent and reducing turnover."