At the age of 33, Facebook co-founder and chief executive officer Mark Zuckerberg, became the youngest person to have ever delivered a commencement speech at Harvard. In his address to the students and staff, Zuckerberg — one of the leading voices of the so-called Millennial generation — forecast that our society will see autonomous vehicles and automation replace “tens of millions of jobs” in just a few short years.
In Aon’s 2017 Global Risk Management Survey, senior leaders said they expected “disruptive technologies / innovation” to be one of their top 10 risks before 2020. As companies grapple with disruptive technologies such as driverless cars, the “on-demand economy,” and blockchain, understanding the role Millennials play in forcing innovation will become increasingly important.
Millennials, people born between 1981 and 2000, are transforming everything from how we buy goods to how we work. In 2016, Millennials became the largest generation in the U.S. In addition to sheer size, this generation will be worth $24 trillion by 2020, according to UBS.
“This demographic shift affects more than just the composition and talent pool of an organization’s workforce – it also has implications for how companies operate and do business in today’s environment,” says Neil Shastri, Leader of Global Insights & Innovation, Talent, Rewards & Performance, Aon.
In 2015, Millennials overtook previous generations, including Baby Boomers and Gen-Xers, to become the largest generation represented in the U.S. workplace. Aon estimates they will become 50 percent of the workforce by 2020.
Across the globe, traditional industries are adapting to these demographic shifts. In the Philippines, for example, just under half the country’s workforce is under 35, and their spending power has seen major multinational organizations – such as Toyota MotorCorp – expand into the country. Meanwhile, the Philippines’ central bank, Bangko Sentral ng Pilipinas, has redesigned its culture to continue to attract this growing demographic.
Millennial Consumers: How Products Evolve To Cater To New Tastes
The substantial purchasing power of Millennials means that companies are – or at the very least, should be – tailoring their product and service offerings around what they want.
Flexibility And Immediacy: The “On-Demand” Economy
Projected to grow to $335 billion by 2025, the “on-demand” or “sharing” economy has changed how we live, travel and work. With Millennials reluctant to commit to choices such as owning a home, the on-demand economy provides this generation with the access that they are looking for, but not necessarily the burdens of a long-term commitment.
Airbnb, for example, is a digital platform that connects those seeking to rent a room or a house for a short time to other people offering their personal assets for rent. For the seeker, the service provides a more cost-effective option than a traditional hotel. For the one “renting” out the room, the service provides additional income. Interestingly, for those that choose to stay together, bed and breakfast style, there is the added element of “experience” – the enjoyment and seeking out of travel “experiences” being a hallmark Millennial quality.
In an interview with Fortune, Brian Chesky, founder of Airbnb – and a Millennial himself – discussed his grapples with the business idea: Would people actually want to stay with strangers? So far, the answer is yes. The home-sharing concept has caught on, with Airbnb worth about $31 billion, pushing Chesky onto Fortune’s list of world’s greatest leaders.
Focusing On Experiences: Low-Cost Alternatives
A study by Harris Group found that over 75 percent of Millennials would rather spend their money on “experiences” than on purchasing goods. Industries such as airlines are seeing this trend as an opportunity to rethink their marketing models. Instead of creating an entirely new product, alternative pricing strategies offer the chance to experience new destinations cheaply.
Earlier this year, Air France KLM launched Joon, a low-cost alternative airline to provide Millennials with greater access to flights across Europe. Canadian airline Swoon sells flights targeted at Millennials, promising fares as little as half those of other budget airlines – catering both to Millennials’ desire for experiences and affordability.
Millennial Employees: How Cultures Evolve To Retain Talent
In addition to becoming the largest generation and consumer group, Millennials are also reshaping organizations from the inside. To stay ahead in a rapidly changing market, businesses are turning to Millennials for skills and ideas.
Ken Abosch, Broad-Based Compensation, Marketing, Strategy and Development Leader, Aon, explains the importance of passion for this generation: This demographic seeks opportunities that help them grow. “They’re interested in on-demand work, free-agency, and other ways to give themselves more skill growth, flexibility, and autonomy,” says Abosch. “Contrary to popular thinking, Millennials do not want to ‘company hop’ – but rather they want to ‘job hop’ within the same company. Organizations should take the opportunity to examine job responsibilities, organizational structures and job leveling, to look for ways to provide the type of stimulation they are seeking.”
As digital natives, Millennials don’t just have the technical skillsets businesses seek to stay ahead of the curve – they also bring unique perspectives to designing and improving products and services. “When teams are working on projects and innovative ideas, the energy and insights from Millennials has been infusing new thinking and expediting our speed to market,” says Jane S. Funk, Senior Vice President and Retiree Solutions Leader, Aon. “This ‘new’ type of thinking can help us rethink how we develop products, how we service our customers, and how we balance technology solutions to keep innovating on behalf of our customers.”
However, while Millennials are still flooding into the workforce, representation at senior levels in many companies often remains limited. According to the 2017 Spencer Stuart Board Index Survey, the average age of independent directors (board members) for S&P 500 companies was 63.1 years old. 2 years older than the 2007 average.
Businesses can still harness the value of Millennial thinking without putting them on their board, by making concerted efforts to engage with them. “The concept of a ‘Millennials board’ is an interesting one for business leaders to consider,” says Funk. “Essentially, it’s a way to proactively formalize a cross-functional team of people whose responsibility it is to provide a unique perspective to a challenge a business might have been working on for quite some time.”
Millennials: Harnessing Strengths And Capitalizing On Spending Power
No other generation has transformed the way we work, buy and live as quickly as the Millennials have. By understanding what they want from their lives and how they approach the world of work and drive innovation, companies can learn to evolve and grow to meet the challenges of this — and the next — generation.
“People think innovation is just having a good idea but a lot of it is just moving quickly and trying a lot of things” – Mark Zuckerberg, Co-founder & CEO, Facebook
“We built our business on creativity. And we’re going to have to go through an education process for the next five years to explain to people how our users and that creativity creates value” – Evan Spiegel, Co-founder & CEO, Snap Inc.