Just 11 years from now, by the year 2025, millennials are expected to make up as much as 75 percent of the American workforce. As members of this generation starts to dominate cubicles and corner offices, they'll drastically shift the way the businesses woo consumers, treat employees, and market themselves to the outside world.
Yet, corporations are not yet prepared to deal with the onslaught of their demands, according to a new study from the Brookings Institution, nor are they moving fast enough to retain and attract millennial workers and customers. "All is we're saying is: 'Hey, look out,' " says Morley Winograd, one of the study's authors, who is a senior fellow at the University of Southern California's Annenberg Center on Communication and Leadership Policy.
Already, the millennial generation disrupted the music industry by refusing to pay for CDs or entire albums. They helped to elect the country's first African-American president in 2008, much to the surprise of the Democratic establishment. Now, they're pushing to make over parts of the food industry by preferring to visit fast-food casual restaurants like Chipotle, sweetgreen, and Panera Bread instead of Burger King or McDonald's. This is just the beginning of the changes millennials will spur politically and economically, Winograd says, as they look to support companies and institutions that they believe promote good over profits. "Millennials as workers and consumers want the idea of social causes carried into the marketplace and the workplace. Not too many companies have figured that out," he says.
Other surprising data points from the Brookings study:
- St. Jude Children's Research Hospital topped one list of institutions or companies where millennials would most like to work, followed by the State Department (at No. 12) and the NSA (at No. 17). The FBI and CIA also made the list of ideal employers along with Google, Apple, Facebook, and Amazon — proving that, apart from high-tech, millennials want to work for places they believe help to shape the world.
- Millennial consumers take an equally altruistic attitude when it comes to their purchasing power. An overwhelming number of those surveyed in 2013 indicated they were more likely to buy products from companies involved in social causes. Attributes they want reflected in their purchases and the companies they financially support include kindness, empathy, and social responsibility.
- Finally, millennials don't like big banks. A study of more than 10,000 millennials found that the 10 least popular brands among members of this generation include major players of the financial services industry such as Bank of America, JPMorgan Chase, Wells Fargo, and Citigroup. An overwhelming majority of those surveyed said they would "rather go to the dentist than listen to what banks are saying." Winograd and his fellow author, Michael Hais, argue that this introduces the very real possibility that millennials could one day support stricter corporate regulations especially for Wall Street. "The financial industry is further behind the curve [on engaging them] than almost any other sector in the economy," Hais says.
So what can companies do to deal with this soon-to-be 75 percent of the workforce? Well, legacy companies such as PricewaterhouseCoopers have tried to appeal to millennial workers by abolishing unpopular annual performance reviews and instead offering more frequent feedback. Newer businesses, such as TOMS Shoes, already inherently appeal to millennials. (The company makes casual slip-on espadrilles. For every pair a consumer buys, the company gives away a pair to a child in need.) These latter businesses, built with millennial values in mind, are in the best position to take advantage of the coming changes in consumer attitudes.
Perhaps, the biggest takeaway from the Brookings report is that the look and feel of work will undergo a dramatic makeover under the millennial generation. Businesses' usual tricks of keeping employees happy and productive simply will not fly by the year 2025. "The desire on the part of millennials for their daily work to reflect and be part of their societal concerns will make it impossible for corporate chieftains to motivate millennial employees simply by extolling profits, or return on investment for their shareholders, or even employee salaries," the authors write. It makes you wonder if the corporate chieftains are listening.