Why You Aren't Paying Millennials Enough
One of the most common complaints I hear from companies is that Millennials are jumping ship for better wages. A related complaint is that Millennials “demand too much” from their compensation, and that they think “they deserve to be paid a fortune.”
Let’s unpack that assertion a little bit.
Millennials make less than Boomers did.
Adjusting for inflation, Boomers made an average of $50,910 between the ages of 25-34. It was easier for a Boomer to graduate without debt, since college – in today’s dollars – cost an average of $10,088 a year.
At the same stage of life, Millennials now make an average of $40,581. They’re three times as likely to have debt, too – the average college education costs $30,405. You can’t work your way through school any more.
Millennials are earning 20% less income than Boomers at the same period of life.
Imagine, for a moment, what paying the bills was like when you were 28 years old.
How much harder would it have been if your paycheck had been cut by 20%?
How much harder would it have been if you had a $350 monthly student loan bill to pay with your sizably smaller paycheck?
Small wonder Millennials are leaving jobs for better salaries. They’re not entitled – they’ve got bills to pay.
Millennials produce more than Boomers did.
Between the Boomer generation and today, the average amount of economic output generated by an hour of work grew by 72.2%, but pay only grew 9.2%.
Put simply? Millennials are producing more money for the companies they work for – and they’re getting paid far less for the privilege.
Imagine how you’d feel if you came up with innovative new ideas that earned the company a sizeable profit – and your paycheck only went up by a measly 0.5%.
Millennials don’t feel appreciated, but it’s not because they feel entitled to a ‘participation trophy.’ They know they’re earning their companies more money, and they know the company doesn’t feel the need to compensate them accordingly.
Is it really so surprising they’re ready to try another company?
What Can You Do About It?
That’s a lot of data, but here’s the bottom line: Millennials aren’t leaving for better-paid jobs because they’re “entitled.” They’re leaving for better paid jobs because they have all the same concerns you did when you were starting your career.
They need to be able to afford to put a roof over their heads, to pay their student loans, and to own the things you need to own as a professional adult. If your salaries aren’t sufficient to meet those basic needs, they’ll need to look elsewhere.
It’s time for a hard question: do your salaries reflect the benefit you’re getting from Millennials?
If not, maybe it’s time for your company to make a change – before your employees decide it’s time to move on.