The U.S. Chairman of PwC on Keeping Millennials Engaged

Ethan Hill The Idea: Young staffers don’t make work their main priority. Moritz explains how his firm motivates them. Sometimes I wonder what my reaction would have been if, as a twentysomething starting out at Price Waterhouse nearly three decades ago, I had been magically transported to today’s PwC. I would have been stunned by how much had changed. During most of my career at the firm, the rewards system focused more on quantity than quality of work, although clients demanded standards just as high then as the ones they do now. Bigger bonuses and promotions went to those who sacrificed more of their personal lives, whereas our current HR policies primarily reward quality and value the work and life needs of every person. The Millennials among my colleagues emphasize finding satisfaction in their jobs and are willing to be vocal about what they want from a career and a company. They’re also extremely globally oriented—they know and care much more about what’s going on all over the world than I did at their age. And they’re adept at leveraging technological advances to be more flexible. But most of all, I would have been astonished that PwC’s Millennials don’t only demand to know the organization’s purpose—its reason for being—but are prepared to leave the firm if that purpose doesn’t align with their own values. When I was coming up, we knew what we were doing, but we didn’t ask why we did it. We didn’t give much thought to our, or the firm’s, role in society. For me, that point crystallizes the generational issues that PwC and many other organizations are facing as they hire greater numbers of Millennials. Fortunately, my education in this age cohort didn’t have to happen instantly. It was a gradual process that included spending time in our HR department, observing and talking with Millennials, and raising my children, who are of the same generation. But I didn’t realize how little I really knew about these young people in the workforce until PwC collaborated with researchers from the University of Southern California and London Business School in 2011–2012 on a study of Millennials and their levels of engagement. Although Millennials have a lot in common with their older colleagues, the study quantified some very real generational differences—differences that matter for any company trying to devise an effective people strategy. Not Your Father’s Firm At PwC, Millennials place more importance on being part of cohesive teams—and less on pay—than non-Millennials do. And they readily speak up about their career goals and concerns. Mapping the Differences PwC’s workforce is strikingly young: Because we recruit approximately 8,000 graduates annually from college and university campuses, two-thirds of our people are in their twenties and early thirties. We’ve always employed large numbers of young people—historically, the assumption has been that most hires will eventually move on to other firms or other careers, while a few will be promoted all the way up to partner. Built into this model was another key assumption: that our workforce accepted the notion of making partner as the reward and justification for years of long hours in service to clients. But our study revealed that the allure of someday becoming partner is no longer enough to spark high levels of engagement. As one Millennial in our study put it, “The guys in my generation want fast-growing careers. We want everything now.” Another said, “I think older generations think people spend their whole lives in one company, but younger generations do not think that way. If the work doesn’t really interest you, you can quit in two years or three years. It doesn’t really matter. You can change the place you work—liking your work is more important.” Millennials are less willing than Boomers to make their work lives an exclusive priority, even when offered the prospect of substantial future compensation. They want job flexibility in the here and now, along with opportunities for training and mobility and better and more frequent feedback and rewards. Another common response to the survey: “People from my generation [expect] their company to give them time to have a personal life.” This finding was particularly pertinent in the developed world. Although Millennials working in every PwC firm around the globe aspire to achieve a greater balance between their work lives and their personal lives, the survey showed that the issue has a stronger bearing on turnover, commitment, and job satisfaction in North America, Europe, and Asia than in other parts of the world. PwC’s leaders saw that we had to respond to this research in a radical way. So we’ve turned our traditional human-capital approach on its head, developing a system of evidence-based HR practices that address the shifting needs of our workforce. A greater emphasis on nontraditional career models sometimes gives our clients pause, but we’ve learned the benefits of sticking to our people commitments. Over the past decade turnover has decreased by about three percentage points—while employee engagement has increased by three percentage points. Meeting Millennials’ Expectations We’ve instituted several initiatives in response to the results of our engagement study: Greater input. Our research showed that Millennials want every action the firm takes to represent their values, and they are more eager than others to be asked for input on important issues. To respond to those desires, we’ve implemented programs to engage all our people, so they know what the firm is doing and why, and so they can have a voice in where it’s going. For example, we’ve asked them for ideas on how to invest in human capital and what the firm’s next $100 million idea should be. Some of their suggestions were pretty compelling, but what was even more important to us was that 70% of the organization took part in the ideation process. We’ve also expanded choice in many areas—including bonuses: People may receive their rewards as cash, gift cards, product packages, or even matched charitable contributions. We’ve increased transparency in our compensation program, and we’ve become more explicit about what our people can look forward to as their careers progress. When I was coming up, we knew what we were doing, but we didn’t ask why we were doing it. We didn’t give much thought to our role in society. Career paths. Millennials are inclined to want and expect the freedom to move from one career path to another. We think that’s laudable, and we don’t want them to have to leave us in order to make such moves. So we’ve instituted a policy of breaking down artificial barriers within the organization. After a member of our staff has been on board a certain number of years, opportunities to try new things increase dramatically. For example, personal circumstances limited the ability of one director in our consulting practice to travel for work. In a previous era she might have faced a choice between accepting a no-advancement job and leaving the firm. Instead, she was offered another role that required less travel. We also have a program called Full Circle for people who need to stop working for a while for personal reasons; it enables them to stay connected to the firm and reengage when they’re able. Our Flexibility2 Talent Network allows people to work for the firm during our busiest few months (January through March) and then pursue other interests for the rest of the year. For example, one individual left to attend medical school but returned to work for PwC during a break between courses. PwC Facts & Financials Founded: 1998 (through a merger of Price Waterhouse and Coopers & Lybrand) Headquarters: London Workforce: 184,235 Source: PwC Appreciation. These young people have a greater expectation than previous generations had that they’ll be supported and appreciated, and financial rewards don’t always fill the bill. We’ve found that Millennials tend to be looking for something instead of or in addition to money—rewards that will benefit them in life- or career-enhancing ways. So we decided to implement a number of nonmonetary rewards for staying with the firm. For example, after a certain number of years we’ll send someone to California for a few days to receive life skills and leadership training. After a few more years people are eligible for a four-week sabbatical during which they can pursue an interest, travel, volunteer, or stay at home with the family. Corporate values and responsibility. Businesses need to create an environment that allows people to give back and excel both at the office and outside it. At PwC we see greater retention and higher performance when people are engaged in corporate responsibility programs. For example, those who participated in more than one CR activity had an average tenure of 7.4 years, while those who participated in none stayed with the organization an average of 6.3 years. Our Project Belize program, which is part of Earn Your Future, a $160 million commitment to increasing the financial literacy of students, provides another example. Only 8% of the staff members who participated in Project Belize left the firm in the subsequent year, compared with 16% of nonparticipants. Millennials are quick to react negatively to any perceived disconnect between the firm’s words and its actions. If they don’t believe us, they leave. That’s a challenge for anyone in a managerial position, and social media have raised the stakes. I’m acutely aware that if I were to say something that appeared to conflict with PwC’s stated values, it could go viral, and my credibility would be shot. Helping Managers Adapt Another part of improving the work experience for Millennials is changing managers’ attitudes toward them. It’s not uncommon for our longer-term partners and staff to believe that working hard is, or should be, a badge of honor. So if someone relieves stress by getting up and walking around, going out to grab some coffee, or taking a yoga class in the afternoon, the Boomer’s impulse might be to tell her to sit back down and keep working. Millennials are often stereotyped as self-absorbed, quick to shift their loyalties, lazy, and uncommitted to work. We’ve all heard these unfounded myths, and that’s exactly what they are. At PwC we’ve used education to address assumptions like these. We’ve helped Boomers see that although Millennials may be more aware of the ill effects of stress, and may value nonwork interests and activities more than Boomers do, they’re every bit as committed to the success of the firm. They’re simply not prepared to sacrifice their health and well-being for it. Millennials are quick to react negatively to any perceived disconnect between the firm’s words and its actions. If they don’t believe us, they leave. To reinforce the value of work/life flexibility, a year and a half ago we made a point of stressing it for managers. Before a manager starts a new job, he or she is asked how team members will be enabled to shift work hours, for example, or to work remotely. We also want managers to model flexible behavior, which doesn’t come easily to some of them, and we make sure to reward it in our compensation process. Last year we created a contest to solicit ideas for a flexibility plan for our busy season. Submissions came in from more than 1,800 teams, engaging more than half the partners and staffers in the firm. Contests have proved to be a popular way to boost engagement as well as bring in new ideas. In another contest that was centered on work flexibility, a number of people suggested that we involve clients in our efforts. That was a great idea, because it often seems that the concept of work/life flexibility runs counter to clients’ interests. For example, a company that’s embroiled in a merger might well expect the people it’s working with at PwC to be available around the clock. But deals can take weeks—even months. Burnout has been an issue in the past, and we’ve had some tough conversations with clients about it. That’s why it’s important for us to explain to clients up front that although we understand their high expectations, and we intend to react quickly to their needs, we’ll provide a team that’s going to be there 24/7—not an individual. We achieve that by overstaffing our teams so that no one person has to be unduly burdened for the sake of a deal. Some observers might see a certain irony here: In an era when young people seem less team-oriented and more individualistic than ever before, we are protecting individuals by relying on a team approach. But Millennials well understand the value of the team and are just as committed to their units and to the firm as previous generations were. What has changed is the definition of commitment. It no longer encompasses sacrificing health or throwing work/life flexibility out of whack, but it still includes what really matters for business outcomes: a devotion to the missions of the client and the firm.

The U.S. Chairman of PwC on Keeping Millennials Engaged

Summary.

Partner Center