by Masashi Ueno, Executive Officer
(The original article in Japanese was posted in November 2021)

 

Millennials refer to people born between 1980 and 1995. They were born just before the spread of the Internet. They experienced its spread and the IT revolution during growing up, making them highly literate in digital technology. People in this generation is also called “digital natives.” Another characteristic of Millennials is that they are not obsessed with owning “products.” They are said to be less interested in owning homes, cars, and jewelry, while actively utilizing sharing economy services and subscription services.

On the other hand, Generation Z defines people born in the late 1990s to 2000. As with Millennials, Generation Z is digitally literate. The major difference between these two generations is that those in Generation Z are “social natives” who have been familiar with social media from their childhood.

Although a working style that values a good “work-life balance” has been a recent trend, Millennials and Generation Z have increasingly been having a perspective that does not keep personal and professional lives separate but rather considers them as linked. At the same time, they have a strong desire to contribute to solving social issues. When they choose a job, many of them seem to prioritize how much the company is addressing such social issues as well as the meaning and purpose of working for the company, rather than a high salary and compensation. As for their views on a company, while they have less interest in building a successful career within the same company and have less sense of belonging to the company, which may be partially represented by the tendency that they do not really place importance on taking of the “life-time” employment system. On the other hand, they tend to value communities with which they can share the same interests and values.

Furthermore, Millennials and Generation Z have the potential to change not only how businesses operate but also how the society functions with their high level of digital literacy. Therefore, if their awareness of their work is increased, more companies will expectedly be innovated with their energy. Also, in the future where a company and its employees will be more evenly balanced, it is necessary for the company to improve the corporate culture to adapt it more to their values.

According to the data on labor turnover of new graduates employed by the Ministry of Health, Labour, and Welfare (MHLW), 31.2% of those who graduated from universities and were employed in March 2018 have quit their jobs within three years after joining the company. Although this is a slight decrease from the level in the survey of the previous year, it still means that about one-third of new college graduates have left their companies within three years. As the workforce inevitably continues to decrease due to the declining birthrate, companies are becoming highly desirous of preventing Millennials and Generation Z who have particularly high potential from quitting.

In relation to such situation, the importance of “employee engagement” is increasing for both companies and their employees. “Employee engagement” defines a state where employees understand companies’ management policies and future visions and have motivation to contribute to the company.

The importance of employee engagement is reflected in the situations of the corporate side including the need to respond to the thought of Millennials and Generation Z; the need to take measures to prevent resignation; the need to establish new indicators such as the disclosure of information on human capital demanded by investors; and the fact that more attention has been paid to “job satisfaction” in the trends of Sustainable Development Goals (SDGs) and environment, social, and governance (ESG). Also on the employees side, the importance is reflected in the fact that a growing number of people are thinking about topics such as “What I really want to do?” and “What should I do?” in the current era of the 100-year life.

 

Measures to achieve high “employee engagement” include the following: 1. staffing the right people in right places; 2. promotion of having a good “work-life balance”; 3. development of satisfactory employee evaluation systems; 4. development of incentive compensation programs; 5. enhancement of communication between employers and employees; 6. promotion of widespread understanding of corporate visions; 7. upgrading the working conditions and welfare programs; 8. training in human resources and providing growth opportunities; 9. Providing opportunities to build job skills and to develop careers; 10. admiration (e.g. employee recognition programs, peer bonus systems, and Citi’s ThankYou🄬 Points program); 11. clearly teaching employees corporate values; 12. providing functional and comfortable working environments; 13. assigning suitable managers in right departments; 14. exchanging views on future visions and goals between employers and employees; 15. Adopting flexible working styles including telecommuting; and 16. spreading the idea of diversity and inclusion. Millennials and Generation Z particularly tend to value mutual understanding and whether they feel a sense of personal growth or not within their companies and communities. In employee evaluation systems, they focus on transparency and fairness. In addition, since they are digital natives, they want to receive prompt feedback and expect corporate management to be tailored to each employee’s strengths and orientations toward career development. Therefore, I believe what is required is to hold an one-on-one meeting by a supervisor and a subordinate and provide feedback on the evaluations to share values each other.