Understanding millennials to maximize their potential
As reported in AssociationsNow, according to the annual CEO Challenge 2016 survey conducted by the Conference Board, the failure to attract and retain top talent is the leading concern among corporate CEOs, presidents and chairs.
The millennial generation (also known as Gen-Y and Echo Boomers includes births from approximately 1977 – 2000) will represent 40% of the total workforce by 2020, as reported by Forbes, making it the largest age group to emerge since the baby-boom generation. In the next ten years, according to Forbes, 75% of the workplace will be millennials. Additionally, according to DMR, there are 83.1 million millennials in the U.S. today.
PwC reports that millennials want a say in the design of their contracts, working arrangements, rewards and benefits packages. They want flexibility and mobility, continual feedback on their performance, and easy access to massive open online courses (MOOCs).
A survey conducted by PwC sheds additional light on defining characteristics of millennial workers:
- Nearly 60% will deliberately seek employees whose corporate responsibility behavior reflects their own.
- 72% made compromises to get into a company.
- 52% said good opportunities for career progression made an employer attractive (the top response).
- 66% feel they need to gain international experience to further their careers.
- Less than one third of millennials expect to work regular office hours.
The mantra for millennials seeking employment is a resounding “make work-life better.” Putting a finer point to it, millennials believe more in “life” than in “work-life balance”.
According to Fidelity Investments’ Evaluate a Job Offer Study, when asked how much of a pay cut they would be willing to take for an improved “quality of work life” (such as career development, purposeful work, work/life balance, company culture), millennials report they are willing to take, on average, a $7,600 pay cut.
Furthermore, when asked which is more important when evaluating an offer – financial benefits or improved quality of work life – 58% choose the latter.
The Fidelity Investments’ survey also revealed that millennials are always on the lookout for a new opportunity, with 41% expecting to start a new job in the next two years. Even with 86% of millennial professionals currently happy at work, nearly half (49%) are either actively looking, or open to a new opportunity.
Additional characteristics unique to millennial workers include (Source: DMR):
- Enter the workforce at a later age than prior generations
- Strongly expect employers to invest in employee training and growth
- Spend 18 hours on their smartphone each week (86% of U.S. millennials own a smartphone)
- Are likely to quit job if employer has substandard technology
The emergence of a new generation of workers presents an entirely new set of challenges, and talent management will become a key strategic tool, which places great responsibility on the shoulders of HR.
As masters of digital technology and natural-born multi-taskers, millennials are primed for success. The onus is on HR to employ digital tools and strategies that effectively harness the massive energy and unbridled potential of millennial workers.
HCM shifts to the cloud to put employees first
Historically (circa 2000), typical core HR systems focused on payroll, ran in-house and were complex, expensive to maintain, highly-customized and difficult to use. Nonetheless, these ‘systems of record’ served companies well by automating complex, time-consuming payroll and employee benefits processes. Fast forward to today. Employers are moving away from legacy point solutions that primarily serve employers to omni-purpose, cloud-based integrated HCM systems designed, first and foremost, to meet the needs of digitally-savvy employees.
(As a refresher, HCM is an umbrella term encompassing everything from recruiting, on-boarding, performance management, workforce management and learning to core HR functions (personnel administration, benefits, compensation management, payroll).)
The goal is not only to cut costs and streamline service delivery, but also to strengthen employee loyalty. In line with this, creating a corporate culture that fosters talent development, team collaboration, and continuous learning is essential. Millennials want to work for an organization that shares their values and shows interest in their personal and professional development.
Unfortunately, many HR departments are still saddled with older technology that is ineffective and costly. According to Mercer’s 2016 Global Human Resources Information Services study, the vast majority of HR departments’ human resource information systems are antiquated, disparate and redundant.
Nonetheless, today’s mandate is clear: HR must embrace digital technologies to reinvent the workplace and create an employee experience that mirrors the best customer experience, an experience that is human-centered, personalized and compelling.
The shift is toward tightly-integrated, multi-faceted, cloud-based systems that incorporate recruitment, on-boarding, learning and continuous performance management — all in one place.
HCM’s strong (and cloudy) growth
By all accounts, the global HCM software market is set to soar in the years ahead and has rapidly ascended to the cloud:
- As reported in AppsRuntheWorld, the worldwide HCM applications market will reach $17.8 billion by 2020, compared with $15 billion in 2015, at a CAGR of 5%.
- The HCM market will grow at a CAGR of 9.2% from $14.5 billion in 2017 to $22.51 billion by 2022, according to MarketsandMarkets.
- The global HCM market is forecasted to grow from $12.59 billion in 2016 to $19.88 billion by 2021, at a CAGR of 9.6%, according to RnR Research.
- As reported in TechTarget, the HR management software market was $19 billion in 2016 and is forecasted to grow to $21 billion in 2017 and $24 billion in 2018.
- In 2017, TechTarget reports, SaaS HR software surpassed on-premises systems for the first time, accounting for 56% of installed HCM systems, up from 36% in 2013.
- More than half of all enterprises will rely on cloud-based or hybrid solutions for their human resources systems by 2020 – more than double the number that do today, according to ISG Insights. By 2020, more than 75% of companies expect to have migrated at least one HR system to the cloud, ISG finds.
- As reported in a recent Forbes Insight study, a survey of 798 HR executives from across the globe conducted by KPMG finds 40% intend to replace their existing, on-premises HR system with a SaaS solution in the near future. Specific HR functional areas ripe for cloud adoption include benefits administration (40%), HR analytics (32%), talent review services (32%), time reporting services (32%) and core HR functions (30%).
Humanizing HR with Oracle HCM Cloud delivered by AST
Oracle HCM Cloud spans and integrates the entire HCM landscape, including on-boarding, social networking and collaboration tools, a learning management system (LMS), as well as modules for recruiting, performance management, payroll, benefits administration, succession planning, talent management, employee wellness and HR analytics.
Across the board, leading analyst firms recognize Oracle for its excellence and continuous innovation across the entire suite of cloud-based HCM solutions.
At AST, we see it every day: Nowhere in business has the impact of cloud computing been felt more keenly than in HR. Decades spent implementing — and customizing — on-premise software have created considerable cost, complexity and rigidness, holding companies hostage to legacy processes dating back to the ‘70s (and beyond). The inability of disparate, legacy point solutions to meet today’s challenges is driving the demand for holistic, integrated, cloud-based HR solutions.
Today, Oracle’s mature cloud-based systems are available for all core HR functions. AST improves and accelerates deployment of human capital management solutions in the cloud through our deep partnership with Oracle. We provide businesses in all industries with an affordable, low-risk hybrid or pure-cloud solution that is typically implemented significantly faster than other approaches.
We’ve invested heavily in pre-configured templates with built-in best practices, project accelerators, data migration tools, bundled offerings and HCM specialists that allow our clients to significantly decrease HCM implementation timelines and costs.
Understanding that customers need to realize maximum value from existing investments, we specialize in guiding our clients through their complete HCM journey – from on-premise to hybrid to pure cloud delivery.
Contact AST today to learn how our Oracle Cloud experts can help your organization better attract and retain top talent by accelerating its cloud HCM journey.