Wondering how to keep employees from joining the Great Resignation? Higher pay and office perks may no longer be enough.
Young workers are looking for growth within the company, and the freedom to be entrepreneurs — outside of their day jobs.
That’s according to Microsoft’s latest report, which surveyed 20,000 employees from 11 countries.
Earlier this year, Microsoft found that 52% of young people polled, namely Gen Z and millennial workers, said they were likely to consider changing employers this year.
But for companies hoping to retain these employees, not all hope is lost.
According to Microsoft, 73% of Gen Z and Millennials said they would stay longer at their jobs if it’s easier to change roles internally.
Younger workers are also more likely to stay if their companies give them the flexibility to pursue “side hustles” or businesses for additional income, said Microsoft.
Microsoft defines Gen Z as those who are between the ages of 18 and 26, and millennials as those between 27 and 41.
“With the Great Reshuffle, companies have been trying to hang on to the people that they have,” Colette Stallbaumer, the general manager for Microsoft 365 and “future of work,” told CNBC Make It in a virtual interview.
The Great Resignation — also known as the “Great Reshuffle” — refers to the exodus of workers during the pandemic. Employees left their jobs for higher pay or what they perceived as greener pastures.
“Now we’re seeing a little bit of a settling [down]yet it’s still a really tight labor market,” Stallbaumer added.
‘Learning requires leaving’
One reason employees change their jobs is that they believe “learning requires leaving,” said the Microsoft report.
The survey found that 55% of respondents change companies as they believe it’s the “best way” to develop their skills.
“Organizations and business leaders need to think about using learning as a retention lever. Because if people are learning and growing, let’s face it — they’ll stay,” said Stallbaumer.
Two out of three employees indicated a willingness [they were willing] to stay if it were easier to make a lateral move to a role that offers new skills.
Specifically, 73% of Gen Z and millennials said they would, compared with 65% of Gen X (42 to 55 years old).
According to LinkedIn, opportunities to learn and grow were also seen as the No. 1 driver of a great work culture in 2022, compared with 2019, when it was at No. 9.
The growth of employees was “de-prioritized” during the pandemic, according to Stallbaumer, as businesses focused on “trying to keep doors open.”
“If you think about the experience we’ve all collectively had the past several years, there’s no question that people are working more,” she added.
“Now is the moment … for organizations to really stop, pause and think about how they are helping people grow and learn new skills?”
That requires a mindset shift for companies — to begin thinking about the internal workforce as a marketplace, Stallbaumer added.
“How do you help people think about internal mobility … [to be] more like a career playground, rather than a career ladder that you’re just climbing up?”
Make way for aspirations
The pandemic has also changed what employees want out of work and life, said Stallbaumer.
“We’ve seen their values change, we’ve seen people prioritize well-being and sense of purpose … and how work fits into their life.”
According to Stallbaumer, this is why younger employees are increasingly pursuing aspirations outside of work, such as side hustles, the creator economy and entrepreneurship.
Microsoft’s report found that younger generations are the most likely to aspire to be their own boss — 76% of Gen Z and millennials said that is a goal, compared with 63% of those who are Gen X and older.
That’s why flexibility continues to be an important consideration for young workers.
Of the Gen Z and millennial employees polled, 77% said they’re more likely to remain in their current jobs if they are given the flexibility to pursue side projects for additional income, said Microsoft.