Executive Corner: Is the Future of Your Firm in the Hands of Millennials?
One of the largest ownership transition issues A/E firm owners currently face is the same one they faced years ago: finding a way to influence younger employees and warm them to the idea of equity ownership. Luckily, there’s now much more robust qualitative (and quantitative) data available from which we can draw stronger inferences as to what many Millennials’ thoughts are on long-term employment with a single employer. And we’re increasingly seeing that this piece of the equation, once understood, leads to a simpler path to effecting successful internal ownership.
According to the Pew Research Center, the number of employed Millennials exceeded that of employed Generation Xers for the first time in 2015—only one year after surpassing the number of Baby Boomers in the labor force. This rapid emergence as the dominant demographic of the employed U.S. population continues to force A/E firm leaders, owners and managers to learn and adapt to previously unfamiliar needs, preferences and styles when it comes to work. Because this fully burgeoned generation of employees now comprises the majority of the workforce, their voices shouldn’t be disregarded or even taken lightly.
What Millennials Value
Millennial-related key takeaways of what I’ve learned from the last five years’ worth of due diligence, analyses and plan implementation surrounding internal ownership transfers find that Millennials value the following:
• Personal growth
• Interactive relationships with superiors and coworkers alike
• Democratic systems that allow them a voice
Some owners, unfortunately, struggle to understand work preferences and philosophies of their youngest employees, leading to communication issues between the two groups, which can create rifts that ultimately foster and promote the idea that changing jobs is the most apt resolution for Millennials. As a result, some not-too-positive stereotypes of these younger employees persist, especially in firms where there’s a noticeable belief that they and their peers are entitled to what previous generations may have toiled for.
Breaking the cycle entails addressing what these valuable employees are seeking. Many of the recurring comments I hear from young non-owners include them wanting to accomplish the following:
• Craft their own niches that would allow them to grow and nurture the specific skills they desire (whether technical or not).
• Seek a new format to the traditional power relationships to fashion the customary boss/owner-employee relationship into more of a coach/mentor-student dynamic.
• Gain a larger voice so they feel their participation in the firm is more meaningful than just what they’re able to produce as technical employees.
Of course, these goals are usually mentioned in the same breath as “producing good work” and “keeping clients happy,” but fewer young employees view these goals as peripheral.
A/E firm owners who make the effort to learn what Millennials want, including what skills they want to improve on as well as the type of work they want to be doing, have stronger relationships with their younger employees, which leads to a more motivated, incentivized employee inclined to stick around longer and work with owners in pursuing a vision of growth for the employee and firm. Many young engineers and architects regularly express that being a part of their firms’ wider visions would increase their confidence in terms of job performance, and often tie their lack of exposure to firm leaders as a reason for their leeriness in terms of ownership.
Millennials seek meaning in what they do, perhaps more so than generations past, and there’s a strong correlation between devoting efforts to keep them happily engaged and their longevity within a company. The old narrative relegated most young workers to positions of little input and choice, while owners’ expectation was that remaining loyal to one firm and rising through the ranks was a given.
Although this isn’t quite the case anymore, there’s certainly no dearth of young employees who desire to become invested, financially and emotionally, in their companies. However, for Millennials to evolve and meet their growth goals, firms must provide them with opportunities to work closely with their managers. Including them in the vision of the firm will reap benefits for current and future owners.
About Jonathan Voelkel
Jonathan Voelkel, an associate principal with ROG+ Partners, has more than 12 years of corporate financial advisory experience, working with hundreds of architecture, engineering and environmental consulting firms across the U.S. and abroad in all facets of mergers & acquisitions, valuation, ownership transition planning, equity incentive compensation, and ESOP advisory.