Driven by the improved economy, more Baby Boomer government workers are beginning to retire. This has been expected for some time. But the Millennials—people born in the 1980s and 1990s, who were supposed to replace them—aren’t stepping up the way they were expected to.
The Millennials —one of the most studied generations in history—supposedly like public service and doing meaningful work, and don’t care that much about making money. “Millennials want to have a sense of mission and purpose when it comes to their work lives,” noted a 2014 report on Millennials from the federal government’s Office of Personnel Management (OPM). “They want what they do to matter and to make a difference. Millennials also believe in the promise of government. Three-quarters of that generation believes government has the potential to address societal challenges, such as lack of educational opportunities, the need for job skills and training, and protecting the environment.”
Using the public sector as an example, it was expected that Millennials would flock to this. And this was true—for a while. But studies are finding that they aren’t staying in government, particularly the federal government.
In fact, a recent survey found that government-wide employee satisfaction and commitment drops 10 points after the first year of federal employment, and while the satisfaction rate does creep up a bit after that, it never reaches the same level during an individual’s time in government.
This is particularly true of Millennials. “Data show that the percentage of the federal workforce under age 30 dropped from 9.1 to 6.6 percent, a steady reduction of more than 45,000 employees between 2010 and 2015,” writes the Partnership for Public Service in its report, Improving the Employee Experience . “Those under 25 dropped from an already low 2 percent to an alarming 0.9 percent during the same period. In contrast, in the entire U.S. workforce, 23.5 percent are under age 30. Federal employees under the age of 30 are also slightly less satisfied overall than all other employees.”
So why are they leaving? And why are they unhappy?
“The reality is that Millennials are attracted to government work because they want to feel like they’re giving back to the community, but quickly leave when they feel caught in a slog of forms and red tape upon taking up the position,” writes Rachel Burger in The Hill .
All this wouldn’t be a problem, except that the long-awaited wave of Baby Boomer retirements in government —sometimes known as the “ silver tsunami ”—is finally happening. It was postponed for a few years due to the recession, because potential retirees were nervous about the value of the investments they expected to live on. But now that the economy is improving, they’re feeling more comfortable about retiring, and they’re leaving—taking their institutional memory with them.
“By 2016, 42 percent of the Department of Housing and Urban Development workforce will be eligible to retire,” Rein writes. “At the Small Business Administration, it’s 44 percent.” More generally, by 2016, more than a third of the federal workforce will be eligible to retire, she adds—including nearly three in five senior executives and almost half the ranks of top managers.
The Partnership’s report offers a number of suggestions for retaining Millennials—provide training, define career paths, use social media in hiring, and so on. However, the OPM has also had a tough year , recent security problems that made it harder to focus on hiring and retention. The next President may find that they have their work cut out for them on the recruiting front.
Wealth management is facing similar issues in succession planning.
Do you have a way to not only attract millennial investors, but also onboard the next generation of advisors? Ensuring that your firm’s hiring, advancement and training are aligned with what millennials are demanding will enable your practice to continue long after you’ve retired.