How to keep millennial employees motivated and happy

Millennials, also known as Generation Y, are the largest generation in the workforce today. A Deloitte report¹ found that millennials will represent 75% of the global workforce by 2025.

The needs and expectations of millennial talent are different from those of the previous generations of baby boomers and Gen Xers. With their tech-savviness and desire for a greater work-life balance, it's important to understand what drives and inspires this generation of employees.

In this article, we'll go over some specific tactics and strategies employers can use to keep their millennial employees motivated, engaged, and satisfied in the workplace.

Takeaways from this blog post:

• Traditional benefits and motivational techniques may not resonate with millennials, leading to decreased productivity and higher turnover rates.
• Offering perks like paid time off, retirement benefits, flexible work schedules, health benefits, professional development, and student loan repayment assistance can help keep millennials motivated and happy in the workplace.
• Employers should also encourage feedback, foster a positive company culture, and utilize the latest technology to keep millennials engaged.

What benefits do millennials want?

Millennials, born between 1981 and 1996, value a positive work environment, personal growth opportunities, and work-life balance. Traditional benefits and motivational techniques may not resonate with this generation, leading to decreased productivity and higher turnover rates. Employers must understand what motivates and keeps the millennial workforce engaged to foster a harmonious and productive work environment.

Our 2022 Employee Benefits Survey Report found that only 50% of millennial employees feel the benefits their employers offer are worth the cost to them.

Here are some of the top perks and benefits for millennials:

• Paid time off (PTO)
• Retirement benefits
• Flexible work schedules
• Health benefits
• Professional development
• Student loan repayment assistance

Let's go over each one in more detail below.

Offer an ample amount of PTO

Taking time off improves employee happiness and prevents burnout. PTO allows employees to rest, recharge, and tend to their personal lives without losing their hard-earned income. This includes personal time, vacation time, sick leave, and mental health days. Even if you can't offer unlimited time off at your organization, try to offer as much as you can. Our report found that 95% of millennials value an adequate amount of PTO.

Help them plan for retirement

Retirement plans, such as 401(k)s or pension plans, help employees save for the future and secure their financial stability after they retire. However, a Bankrate survey² found that 49% of millennials say they’re behind in saving for retirement.

You can help them get back on track by offering a retirement plan as an employee benefit. Our report shows that 87% of millennials value retirement benefits. But only 54% of employers surveyed offer these benefits, which suggests a gap in meeting the needs of this generation. Providing a retirement savings plan is a great way to become an employer of choice among millennial job seekers.

Embrace flexible hours

According to our report, 83% of millennials value flexible scheduling. Offering flexible work arrangements, such as remote work options or flexible work hours, can significantly increase their job satisfaction and overall happiness.

Healthy work-life balance is a top priority for millennials. Trust them to manage their time effectively and focus on results rather than strict office hours. This flexibility can positively impact millennial employees who feel empowered and in control of their work schedule.

Provide health benefits that give employees more choice and flexibility

Millennials want a say in their health benefits. Our report found that 63% of millennials value being able to choose their own benefits rather than their employer choosing for them. Additionally, our report found that 88% of millennials say health insurance is an extremely important benefit.

Some employers offer traditional group health insurance policies, but they're often more expensive than other health benefits. It's also one-size-fits-all, which may not meet the needs of your diverse workforce. A cost-effective alternative is a health reimbursement arrangement (HRA). HRAs allow employers to reimburse employees, tax-free, for their medical costs.

Here are three of the most popular HRAs:

• Qualified small employer HRA (QSEHRA)
• Individual coverage HRA (ICHRA)
• Group coverage HRA (GCHRA)

Qualifying expenses include medical care, dental and vision insurance premiums, and other related costs. Once your employees make eligible expenses and submit documentation of those expenses, you can reimburse them up to their allowance amount. This gives your employees more choice in their health benefits because they can decide which qualifying expenses they want you to reimburse them for. With a QSEHRA or ICHRA, they can also choose the individual health insurance plan that best fits their needs.

PeopleKeep's HRA administration software makes it easy to set up and manage your health benefits in minutes each month.

You can also provide a health stipend to your employees, which is a fixed amount of money for their health plans and medical expenses. Like HRAs, stipends are flexible and cost-effective, but they're taxable. The IRS doesn’t consider them a formal health benefit. However, you can leverage stipends to cover more than just health expenses.

With WorkPerks by PeopleKeep, you can easily create custom employee wellness stipends. A wellness stipend covers gym memberships, fitness classes, home exercise equipment, wearable fitness trackers, mental health counseling, and other wellness expenses for employees.

Offer training opportunities for career advancement

Millennial workers value continuous learning and growth in their careers. Our report shows that 73% of Millennials value professional development. Provide them with career advancement opportunities like training programs, workshops, or conferences. Encourage them to take on new challenges and offer support and guidance along the way. This will keep them motivated and show that you're invested in their skill development for long-term success.

Help them with their student loan debt

According to Education Data³, the average student loan debt in the U.S. is $37,088. Millennials make up the largest group of federal loan borrowers, followed by Generation Z. Offering a student loan repayment plan is an easy way to attract college graduates who are trying to chip away at their debt. You can also help your employees avoid student loan debt by offering tuition reimbursement for education expenses such as college tuition, textbooks, supplies, and equipment.

Other ways to keep Millennial employees motivated and happy

Along with the right benefits and perks, there are ways you can become an employer of choice for millennial job seekers.

Encourage employee feedback

Millennials appreciate an open communication style and transparency in the workplace. Encourage regular feedback from your employees and take their opinions into consideration. Implementing changes based on their constructive feedback shows that you value their input and can increase employee satisfaction and motivation.

Foster a positive company culture

Creating a positive workplace culture is essential for keeping millennials happy and motivated. Encourage a supportive and inclusive work environment where employees feel valued and appreciated. Organize team-building activities, social events, and other initiatives that promote a sense of community within the organization.

Use the latest technology

As the first generation to grow up with the internet, millennials are digital natives. Embrace technology and provide them with the tools and resources they need to work efficiently. Work tech includes tools and software that enhance the employee experience. With the right tools at their disposal, employees can work efficiently, communicate effectively, and manage tasks easily.

Some examples of work tech include:

• Project management software
• Video conferencing software
• OKR software
• Employee communication tools
• File-sharing software

Work tech solutions aim to improve workflow, productivity, and collaboration. This will keep your millennial employees engaged and showcase your company's commitment to staying on the cutting edge.

Conclusion

By implementing these strategies, you can keep your millennial employees motivated and happy in the workplace, leading to higher employee retention rates and a more engaged workforce. Remember that every employee is unique, so it's important to tailor your approach to meet the individual needs and preferences of your millennial team members.

This blog article was originally published on October 10, 2013. It was last updated on April 2, 2024.

1. https://www2.deloitte.com/content/dam/Deloitte/global/Documents/About-Deloitte/gx-dttl-2014-millennial-survey-report.pdf
2. https://www.bankrate.com/retirement/retirement-savings-survey/
3. https://educationdata.org/student-loan-debt-statistics