Reward Implications and Strategies for Millennials June 2018 - PowerPoint PPT Presentation

Reward Implications and Strategies for Millennials June 2018 Prepared by Aon Talent, Rewards & Performance | Broad-Based Compensation Rutherford County MTSHRM

Today’s Discussion Topics  The Millennial Mindset  Implications for Rewards Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 2 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Meet the Millennials Silents Boomers Gen X Millennials Born 1981 – 96 Born 1925 – 45 Born 1964 – 80 Born 1946 – 63 Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 3 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Evolving Generational Preferences and Values Traditionalists Boomers Gen X Millennials Centennials (1930 – 1945) (1946 – 1964) (1965 – 1978) (1979 – 1996) (1997 – )      Values Conformity Personal and social Free agency and Collaboration Resilience and grit    Stability expression independence Social activism Practical intelligence      Security Idealism Street smarts Tolerance for diversity Personal privacy   Health and wellness Cynicism      Incentives Appreciation and Individual rewards Rewards for results Constant feedback Personalized   recognition Team rewards Spot awards      Benefits Embrace Make employment Self-reliance Creative benefits Create my own  defined benefit decisions based on Flexible benefit and time off package retirement programs benefits options      Rewards Satisfaction of Money, title, Flexibility and Meaningful work Divergent experiences a job well done recognition autonomy  Loyalty to organization     Base Salary Internal Hired Accessing opportunity Tailored to me competitiveness guns/mercenaries      Pay Increases Cost of living Seniority and internal Pay increases tied Likely to share pay Keep pay increase adjustments equity to performance increase information information private  Entire group likely to leave if perceives as unfair Source: Future of Workplace Survey Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 4 4 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Millennials Are a Global Phenomenon Country How They Are Referenced   Globally Gen Y   Post 80’s Generation China   Europe Lost Generation   Africa Born Free Generation Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 5 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Millennials Overtake Boomers as America’s Largest Generation Projected Population by Generation (in millions) Source: Pew Research Center tabulations of U.S. Census Bureau population projections released December 2014 and 2015 population estimates. Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 6 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Comparative Number of Births by Generation Births Underlying Each Generation (number of U.S. births by year and generation) Source: U.S. Dept. of Health and Human Services National Center for Health Statistics Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 7 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

5 Generations Comprise the Workforce in 2020 Diversity in the Workplace Source: Aon Hewitt 2015 Health Care Survey Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 8 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

How Millennials Differ Source: Corporate Executive Board Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 9 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Life Through the Eyes of a Millennial Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 10 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Life Through the Eyes of a Millennial Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 11 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Life Through the Eyes of a Millennial Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 12 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Things Millennials Don’t Use Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 13 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Global Nuances — Millennial Priorities Chartered Across the World  If you had to prioritize in life, what would you put an emphasis on? Source: Understanding a Misunderstood Generation , Harvard Business Review Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 14 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Generation Quickly Evolves Into Life Stage… Early Mid Late   Financial Wellness Tools and  Child’s Education Savings Reverse Mentoring  Advisement  Phased Retirement Benefits for Parents   College Loan Tools and Match;  Benefits for Parents Parental Leave  Debt Repayment  Parental Leave Enhanced   Home-Buying Assistance Benefits for Grandchildren Maternity/Paternity Policies   Enhanced Maternity/Paternity Elder Care Policies Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 15 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

A Millennial’s Perspective on Compensation Opportunity Variable Pay Awards for Salaried Employees 1980 – 1998 Variable Pay First Millennials Born Salary Increase Percentage of 10.0% 9.4% 8.4% Payroll 8.0% 6.2% 6.2% 6.0% 5.5% 5.3% 5.3% 5.0% 5.0% 4.8% 4.6% 4.3% 4.2% 4.0% 4.0% 3.9% 4.0% 3.9% 3.8% 4.5% 4.2% 5.7% 5.9% 6.4% 7.6% 7.6% 7.5% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 1980 1981 1982 1983 1984 1985 1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 Millennial’s Work Experience Variable Pay Awards for Salaried Employees 1999 – 2016 Variable Pay Salary Increase 12.0% 11.3% 11.6% 12.0% 12.0% 12.7% 12.7% 12.8% 12.8% Percentage of Payroll 11.4% 11.2% 11.8% 10.8% 10.8% 10.5% 9.7% 9.5% 9.3% 8.8% 4.3% 4.3% 4.2% 3.7% 3.7% 3.6% 3.6% 3.6% 3.4% 3.4% 3.0% 2.8% 2.9% 2.9% 2.9% 2.8% 2.7% 2.4% 1.8% 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Projected Source: Aon Hewitt Survey — U.S. Salary Increases 1980 – 2016 Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 16 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

The Millennial Mindset make it make it make it Fulfilling Flexible Fun Where Things Feel… A Company and Career That Offers… In an Environment That Is: • Engaging  Adaptive to change  Opportunities for constant growth • Friendly  Open to individual differences  Work with personal meaning • Social  Transparent  The ability to see personal impact  Easy to get stuff done  Ongoing feedback and recognition  A strong brand Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 17 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Fulfilling. (adj). Making someone satisfied or happy because of fully developing their character or abilities. Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 18 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Expectations vs. Differentiators Is a good fit Provides with my stimulating 44.2% 42.0% values work 30.3% 55.8% 58.0% Is an organization Provides that empowers meaningful employees 69.7% 26.6% work 36.2% Provides good career/development 73.4% 63.8% opportunities Differentiator Expectation Source: Aon Hewitt Workforce Mindset ™ Study 2016 Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 19 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Expectations for Promotion Millennials Other Generations 89% 77% 68% 53% 2 years or less 5 years or less Source: Corporate Executive Board Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 20 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017

Diverse Experiences Retain Millennials Maximum Impact of Intent to Stay for Millennials 23% -1% Opportunity for Lateral Career Accelerated Promotion Path Moves Source: Corporate Executive Board Aon Hewitt | Talent, Rewards & Performance | Broad-Based Compensation 21 Proprietary & Confidential | BBC/WaW/Millennials.PPTx/001-Z7-04029 05/2017