Silicon Valley is synonymous with innovation. At the heart of what makes this place tick is the culture of the startup, inspiring technology centers and research parks around the world.
Ping-pong tables. On-site chefs. Open work spaces. Startups have developed reputations for creative workplaces, collaborative work styles, and constant iteration. They have become attractive options for both young people starting out in their careers and more experienced professionals looking to make an impact.
But what is it about Silicon Valley’s work culture that is so inspiring? As younger generations enter the workforce, what can established organizations learn about attracting and retaining talent based on startup practices?
In Silicon Valley, successful startups create an inclusive, team-oriented culture that emphasizes agile decision-making, individual initiative and fast delivery over the more bureaucratic cultures of consensus building and planning around long-term goals that typify more traditional businesses.
Research suggests that this kind of startup culture corresponds better to what new generations of university graduates look for in companies where they seek employment. Employers need to create a compelling work experience that stands out. They need to ensure that work is enjoyable and fulfilling, but also demonstrate that they recognize achievement, support work-life balance, and provide clear career development opportunities.
Moreover, businesses that adopt such flexible, inclusive practices can benefit from more successful employee recruitment, retention and motivation. So there are important lessons for all employers that seek to prevail in the increasingly competitive market for attracting and retaining new talent.
The Influence Of Startup Culture On Millennial Expectations
According to the latest Aon Workforce Mindset™ Study, employees are increasingly looking for a fun, flexible workplace and clearly defined opportunities to develop their careers. Respondents cited startup style “fun, flexibility, and innovation” as key qualities they were seeking in employers – and Millennials were the most likely to view them not just as desirable perks, but as expectations.
There are several factors that clearly differentiate Millennial values from those of preceding generations in the workplace. Generation X and Baby boomers, for example, consider stimulating work to be a significant differentiator in terms of where they would want to work, while Millennials consider this more of an expectation. While all generations of employees are most influenced by good pay and benefits, workplace flexibility, and the leadership position of the employer, younger employees are more demanding from employers when they explore opportunities for career advancement.
This Millennial attitude is strongly influenced by the high media profiles of Silicon Valley entrepreneurs, many of whom have built multi-billion dollar companies after founding them at a young age, earning reputations for driving their staff hard, but rewarding good work and ideas over experience or time served. The fact that many startup founders – including the “traitorous eight” attributed with founding Silicon Valley – had previously been employed by established organizations, but quit in pursuit of greater freedom, is also a significant factor in Millennials’ desire to be properly rewarded for their work. If you don’t treat them well, they may head elsewhere – perhaps even launch their own rival businesses.
Furthermore, thanks to the success of Silicon Valley startups in driving the digital revolution, Millennials are the first truly digitally-savvy generation. “As Millennials take their place as the largest single generation in the workforce,” says Ray Baumruk, Partner, Employee Research and Insights in Consumer Experience at Aon Hewitt. “They bring with them an expectation to be able to leverage technology fully to do their work efficiently, in flexible environments, and that allow collaboration and connection with others to drive innovation and growth.”
Cross-Generational Attitude Changes
With Millennials a growing part of the workforce, understanding these attitudes is becoming increasingly important. Furthermore, there are signs that Millennial expectations are beginning to filter up through older generations, as the benefits of flexible working, rewarding on merit, and treating employees as individuals worth nurturing are becoming recognized by Generation X and Baby Boomers.
“With many of the startups run and founded by a much younger generation, it is no longer the case that the old or senior cannot be taught or managed by a younger workforce,” says Nitin Sethi, Partner and Chief Commercial Consulting Officer, Aon India. “This has impacted large corporations, where senior management teams have adopted a practice of reverse mentoring – where senior managers and executives have Millennials as coaches and mentors to help them understand and use technology, approach workforce issues, and so on.”
What Do Today’s Workers Want?
The opportunity to get involved in many different activities and learn new skills is a defining aspect of startup cultures. Learning such skills on the job as new challenges emerge is a growing attraction to workers – now that jobs are no longer for life, employees know they need to continually learn new skills, and in fast-paced startup environments this is taken for granted. It is also an atmosphere that is more difficult for larger, more established organizations to create.
This is why, especially in an age of global skills shortages and increasing competition for talent, employers need to make sure they provide a compelling case for retaining employees by ensuring they understand what is expected and the total rewards – including career development support – they can expect in return.
Here, clear, open communication between management and employees is vital, as resources that enable meaningful conversations about pay, performance and career opportunities are increasingly valued by employees. By encouraging such conversations, trust can be built over time – and management can get a better sense of what needs to be done to improve employee perceptions, and drive deeper engagement.
In addition to communication needs, Reetta Makinen, Senior Consultant, Aon Hewitt Australia, notes that Millennials in particular have a greater desire for flexibility and work-life balance than previous generations. “Achieving balance is the #1 factor millennials are looking for in an employer. Organizations need to adjust their work practices and leadership behaviors to provide this.”
There are wider benefits than keeping Millennials happy, however. Makinen and her team have tracked employee engagement scores and have seen an over 10% increase with some organizations that are focusing on providing more flexibility – correlating higher employee engagement levels with flexibility in work arrangements.
Making Work Matter
One of the other key traits of successful startups is ambition – a clearly expressed desire to revolutionize their industries, or even the planet. In an age of rapid technological change, simply being a manufacturer of a successful product may not be enough to attract top talent – they want to know what your corporate ambitions are, and to be treated as an integral part of that journey, not just a cog in a machine.
Here, defining a clear mission statement and employment value proposition can be a major benefit – helping people understand not just what your organization does, but why, how, and the ways in which employees will be rewarded and encouraged to contribute towards the overall goal.
But one size does not fit all when it comes to focusing on what matters to employees. For example, while men would like to have more fun at the workplace, women are more likely to seek better communication, recognition and rewards. Women are also more likely to value fairness, honesty and respect. Meanwhile, salaried employees and Baby Boomers are more inclined towards companies on the basis of whether they provide meaningful work.
To make sure you understand what your current and future employees want, businesses need to focus on “developing manager capability to become greater listeners and coaches to understand and provide the best work experience for Millennials whilst working for the organization,” says Makinen. “65% of Millennials who left their employer said they’d have stayed longer if management had shown interest in them, or simply asked what they need to keep them there.”
What Do Businesses Need To Do To Get The Benefits Of Startup Culture?
From the findings of Aon’s study, and insights from Baumruk, Makinen and Sethi, there are a number of key principles that businesses can take from startup culture to help revitalize their own operations:
“Emphasize the importance of creating a culture within the company where innovation is a basic requirement for employees, and where incremental or revolutionary improvements are encouraged, adopted, and rewarded by leadership.” – Workforce Mindset™ Study
“Achieving balance is the #1 factor millennials are looking for in an employer. Organizations need to adjust their work practices and leadership behaviors to provide this.” – Reetta Makinen, senior consultant on Performance, Reward and Talent at Aon Hewitt Australia
“Millennials are looking for a culture that helps them experiment and learn as they grow. They are looking at employers who are willing to keep investing in them to help them develop skill sets and capabilities that will always keep them relevant in the broader job market.” – Nitin Sethi, Aon Partner, Chief Commercial Consulting Officer, India
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