PwC s NextGen: A global generational study

Transcription

1 PwC s NextGen: A global generational study In 2011, PwC, the University of Southern California and the London Business School launched a unique and unprecedented global generational study. A wide range of data was gathered from PwC employees and partners across the globe involving people from different generations, career stages and cultural backgrounds. Matching PwC s business practices with the new workforce reality For internal use only

2 I think every generation is different. I m sure we were different from our parents, right? But I think the difference today is generally that the young people have more options than we did, including the option of leaving without a job the work culture and the economic necessity during our time wouldn t even allow us to consider these options people are, with the Internet and social media, much more in tune with what is going on. People are much more mobile. Partner with 30 years at the firm

3 Table of contents Foreword 5 Executive summary 6 Setting the stage 12 New world of work 14 Matching PwC s business practices with the new workforce reality 15 PwC s NextGen Study 16 Who are the Millennials? 18 What does it take to retain people today? 22 PwC drivers of retention 23 Balance and workload 24 Engaging work, development and opportunities 32 People and teams My PwC community 38 Competitive pay and job opportunities 44 Generational differences at PwC 48 Is there a global Millennial? 50 Conclusion 52 PwC s NextGen: A global generational study

4 4 PwC s NextGen: A global generational study 2012

5 Foreword Dear Partners, I am pleased to share the results of PwC s NextGen: a global generational study. NextGen is the largest research-based generational study ever conducted and represents the insights and perspectives of more than 40,000 PwC partners and employees from around the world. Our research efforts, in conjunction with the University of Southern California and the London Business School, commenced in August 2011 and continued through January We believe these findings are insightful and will enable PwC, as a firm, to make more informed decisions about our current and future talent and the generational implications of those decisions. This global document will be followed by territory-specific reports, which will provide the respective territory leadership team with a deeper understanding of the generational differences within their territory and the global variation of those differences. There are some clear messages in this generational study, as well as new insights that will help us identify areas for opportunity. We encourage each territory leadership team to review this global document, as well as the forthcoming territory-specific reports and incorporate these learnings into their Global People Survey action-planning efforts. These culture plans will be critically important to support the workforce of today... but, more importantly, create a platform to build the workforce of the future. Below are some high-level recommendations for us to think about as you digest the NextGen study results. Radically redesign and improve work/life and workload balance, particularly around the busiest working times for our people. Supercharge our efforts around building a flexible work culture for our people and our clients. Leverage and invest in technology to provide a better people experience, increase efficiencies and enable working flexibly. Provide significantly greater transparency around reward and salary information particularly around how compensation is derived versus the market. Increase visibility around career development, mobility opportunities and job assignments. Build a sense of community at work that includes an emphasis on teamwork, appreciation and support from supervisors. Gain a deeper understanding of the generational differences at play and the global variation of those differences. Incorporate these learnings into the overall Global People Survey action-planning efforts and integrate these into your local culture plans. Create a greater sense of purpose for the entire organization (both globally and locally) to create more meaningful work and improve the value proposition for our people and partners. Finally, we know that one size does not fit all. Therefore, we need to make it personal! All of our people have different needs and motivations, irrespective of generation. While this document represents our initial report to network leadership, we will create a broader-staged communication plan to make our generational learnings from this study visible to all of our partners and our people. In the interim, this document is for network leadership only; inclusive of TSPs and their lead teams. The report is for internal use only and should not be shared outside of PwC without my written consent. I would like to thank all of the Territories and leaders who participated in the study, our friends and colleagues at the University of Southern California and the London Business School. Finally, I would like to recognize Anne Donovan, US Human Capital Transformation Leader, and Nora Wu, East Cluster Human Capital Leader, who led these efforts on behalf of PwC. I hope you find the report insightful. Kind Regards, Dennis Finn Global Human Capital Leader PwC s NextGen: A global generational study

6 Executive summary Setting the stage In 2011, PwC, 1 the University of Southern California and the London Business School launched a unique and unprecedented global generational study to systematically explore the aspirations and expectations of the Millennials. PwC plans to leverage what was learned to guide potential changes to its business practices and people strategy. This new generation of staff, the Millennials, currently make up most of the workforce at PwC, and are quickly moving into management roles. Their comfort, adaptability and skill with rapidly advancing communication technologies is one of their greatest assets, especially in a period of global mobility and connectedness; however, they have lower expectations for a long-term employment relationship characterized by mutual loyalty. At PwC, it is widely believed that the Millennial generation is different from past generations, and that some of these differences may lead them to leave PwC earlier in their career. PwC conducted this study because leadership realizes that the firm needs to better understand this generation entering the workforce, what they want from work, and what are the primary factors that contribute to their desire to stay and pursue a career at PwC or leave. The firm s challenge is how to retain the best and the brightest, while at the same time, meet the needs of the Millennial workforce. Data were collected from PwC employees working in 18 different global territories across job levels, lines of service and generational groups through anonymous web-based surveys, individual interviews and focus groups, and a social media jam (a three-day interactive social media forum hosted by the London Business School). This report focuses on the client service population of the firm. In total, 30,853 PwC client service employees participated in the survey, more than 300 participated in individual interviews and focus groups, and more than 1,000 Millennial employees and leadership participated in the jam. Who are the Millennials? Millennials were born between 1980 and 1995, and are currently under 33 years of age. Within PwC, Millennials are typically unmarried (75%), have no children (92%), and have come to PwC straight from a university (75%). They are primarily associates, senior associates and managers. Millennials have entered the workplace with the expectation that they need to manage their own careers. Due to societal shifts in the past 30 years, they do not expect to stay with one organization forever, nor do they expect the firm to provide them with life-long employment. They realize that they have to keep developing their professional skills so that they are marketable. While there are many myths about Millennials, our interviews showed that both Millennial and non-millennial staff and partners believe there are differences between them. But are these myths real? Here are a few examples: Myth: Millennials think that work interferes with their personal life. We find that both Millennials (71%) and non-millennials (64%) believe the demands of work interfere with home and personal/family life; however, work/life imbalance is a stronger predictor of Millennial turnover than non-millennial turnover. 1 As used in this report, PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see ( for further details. 6 PwC s NextGen: A global generational study 2012

7 Myth: Millennials are less committed to PwC. We find that 44% of non-millennials and 46% of Millennials slightly less than half of each group say they are committed to PwC. Myth: Millennials prefer to communicate using and instant messaging (IM) rather than speaking with someone face to face. We find that 74% of Millennials versus only 58% of non-millennials say they are likely to contact co-workers about task-related issues through social networking sites. However, both Millennials (96%) and non- Millennials (95%) want conversations about their careers to take place in person. We find that the myths may not truly differentiate generations despite popular belief. The question for PwC today is: Are there generational differences that matter, and do any of these differences imply that PwC needs to change how it manages its workforce? To answer this question, the study examined the critical relationships among the work factors that drive employee retention, commitment to the firm and satisfaction with the work and their careers, all of which are critical components of PwC s long-term success of retaining both Millennial and non-millennial employees. In comparing Millennials around the world, we looked at senior associates and managers two career stages populated by both generations to account for variation that may stem from one career stage to the next. To learn whether there is a global Millennial generation, we examined the responses of all employees in five regional clusters that we defined by economic development (per capita GDP) and cultural values: West highly developed; West less highly developed; Central highly developed; Central less highly developed; and East. What follows are the results which show what really matters, how positively employees rate the firm in these areas, where there are differences between the Millennials and non- Millennials and how these differ across the PwC global network. What does it take to retain people today? About 23% of staff report that they intend to leave the firm in the next year. To retain the people needed to secure PwC s future success, the study shows that the firm needs employees to feel satisfied with their jobs, committed to the firm through an emotional attachment, and energized and thriving at work. An employee s need for an emotional connection to the firm is prevalent among all the generations in all five regions. While there are some differences between regions, PwC employees report high scores for job satisfaction and moderate scores for commitment to PwC and thriving at work. Approximately three quarters of managers and staff report satisfaction with their jobs. In contrast, only half of employees feel committed to the firm and say that that they are thriving. PwC s NextGen: A global generational study

8 How do we get our people to feel connected to PwC? The study found a number of factors that drive employees emotional connection with the firm and, therefore, retention. The four groups are represented in the following model: Environment and practices drive the emotional connection 1 Balance and workload Work/life imbalance Impact of the workload Manageability of the workload Engaging work, development and opportunities Work that is interesting and stimulating Support for professional development Knowledge and influence about opportunities People and teams My PwC community The team Mentors and supervisors Friendship at work Competitive pay and job opportunities Perceived pay equity Job opportunities at PwC vs. elsewhere Emotional connection drives retention Thriving Commitment to PwC Job satisfaction Retention 1. Balance and workload. The ability to balance work and personal life relate strongly to all the emotional sources of connection to the firm and to turnover. Employees across all generations and regions want increased flexibility. Work/life issues are a contributing factor for turnover in all regions for men and women, and for Millennials and non- Millennials. We found that: More than 60% of employees experience work/life imbalance and 60% want more flexibility. Fifteen percent of men and 21% of women on staff would give up significant pay or promotion speed to work fewer hours a day. There is a widespread belief that employees cannot take advantage of PwC s work/life programs without putting their careers at risk. Workload is not spread evenly across the workforce, and this impact is magnified during the busiest work periods. Working extremely long hours during the busy periods has a negative impact on job satisfaction and turnover. The negative impact of extreme hours during the busy periods is far greater than the impact of average hours worked throughout the year and the impact disproportionately affects the firm s top performers in both generations. 8 PwC s NextGen: A global generational study 2012

9 While imbalance is an important cause of turnover everywhere, it is an even bigger factor in the developed countries of Europe and North America and in the East region. Work/ life imbalance is particularly related to turnover among Millennials in the West and the Central highly developed regions. 2. Engaging work, development and opportunities. Interesting work opportunities and chances to continually develop professional skills are core features of the employment relationship at PwC. Employees are more satisfied with their jobs and thrive at work when they have meaningful and interesting work, grow and develop while doing it, and have access to opportunities at PwC. PwC employees feel positive about the work itself and only a very small percentage (less than 15%) see their work as boring and repetitive. On the other hand, only one quarter of employees are satisfied with the use of technology at work, and 48% of employees think the firm has good support for professional development. Interestingly, non-millennials are less likely to feel that the firm supports professional development, which negatively impacts their overall satisfaction with their job and ability to thrive at work. Transparent information about staffing decisions and control of work assignments enable employees to influence the opportunities they have at the firm, which impacts their job satisfaction and commitment to the firm. Only 33% of PwC staff think they have adequate information about staffing decisions, while only 55% are satisfied with the amount of control they have over their work assignments. 3. People and teams My PwC community. Day-to-day experience with the firm is shaped by employees community and interaction at work: their teams, their mentors and supervisor, and their friends and colleagues. Around the globe and in all generations, having a positive community at work provides a sense of belonging and personal attachment that relate to higher levels of commitment to the firm, job satisfaction and thriving. PwC employees report high levels of team commitment (66% favorable) and supervisory support (67% favorable). These are strong predictors of commitment to PwC in all regions and among Millennials and non-millennials. However, only 55% of employees feel that they are appreciated at work, which is a very strong indicator of job satisfaction and thriving at work, and an especially strong predictor of thriving for Millennials. 4. Competitive pay and job opportunities. Thirty-one percent believe their compensation to be equitable and 62% feel they could easily find an acceptable alternative job elsewhere. Additionally, PwC employees believe that they would receive a raise of more than 30% relative to their current compensation at PwC if they left today. These factors impact turnover, job satisfaction and career satisfaction across all regions and generations. The picture is even starker for Millennials who are more likely to be looking up pay information on the Internet and discussing pay with their co-workers. Sixty-nine percent of Millennials believe they have easy job alternatives compared with 59% of non- Millennials. Millennials working as seniors and managers believe they can get a 33% boost in pay compared with 24% for non-millennials in the same career stage. PwC s NextGen: A global generational study

10 Recap of the global findings The study yields four areas that shape the relationship of employees to PwC. These four areas offer opportunities to reshape practices that will increase the probability that employees will invest more of their career in the firm. Survey data and interviews tell us that many employees who stick with the firm do so despite feeling that they are making important sacrifices of time, money and opportunities. In return, they know they benefit from PwC s global reach and brand, meaningful and interesting work, professional development opportunities, and a supportive community of valued colleagues. PwC can improve its ability to retain the talent it needs and wants by working on either side of this equation: Decreasing the sacrifices that employees feel they make, or Increasing the benefits derived Below we summarize the findings that suggest the ways in which this equation may have to change to accommodate the Millennial generation. Generational differences at PwC Understanding generational differences is critical for PwC, but the differences should not be overstated. All of the elements in the model representing people s relationship to the firm and attitudes toward their jobs are important to both Millennials and non-millennials. There is remarkable similarity in how people experience and perceive the firm, no doubt driven by the nature of the work and the nature of the people who select PwC and remain longer term. These factors are reflected in a very strong firm culture, which extends around the globe. PwC employees also change together in terms of responsibilities both at work and in their personal lives as they move through job levels and life stages. Millennials and non- Millennials tend to be more similar than different within a job level. By the time people are promoted to senior associate or manager and beyond, they are typically strongly aligned with people in their same roles, and steeped in the firm s dominant culture. Despite all the factors that dictate more similarities than differences between the generations, there are some elements of work that are more important for Millennials than non-millennials at the same job levels. This suggests areas where firm practices may have to shift to accommodate a changing workforce: Millennial Supervisor support Appreciation Team cohesion Work/lifebalance Non-Millennial Control of work Support for development Pay equity 10 PwC s NextGen: A global generational study 2012

11 PwC s challenge Taken as a whole, the findings suggest that especially in the more economically developed regions, the traditional deal does not carry as much weight with Millennials. That deal relies heavily on pay and professional development, and on giving staff a shot at the financial security and prestige of becoming a partner in exchange for working very long hours. This generation may not be as interested in putting up with the time demands required for success in the firm, nor as enticed by the promise of a well-paid existence once making partner. Compared with non-millennials, they are more concerned with work/life balance and the pursuit of interesting opportunities. While workload, development and compensation define the transactional relationship with PwC, building strong teams and supportive supervisory relationships connects employees to their PwC community. Providing the employee with more transparency around opportunities and assignments that they find interesting enables them to continue to find meaning from learning and variety within their work. These softer aspects of the relationship community and control will be particularly important during an era when transactional elements may no longer be sufficient to retain talented staff. In this era of easy mobility and quick access to information, PwC needs to be extremely vigilant about keeping employees engaged through both the transactional elements and their professional and personal satisfaction. The report that follows will lay out, in more detail, how this study was conducted, and key findings regarding the generational similarities and differences across the global firm. PwC s NextGen: A global generational study

12 Setting the stage Project background In 2004, the US Firm worked with leading researchers from the Center for Effective Organizations (CEO) at the University of Southern California to examine the long-term career benefits of experience with the firm, the causes of early turnover and the critical factors for retaining talent. Building on these previous collaborations, PwC partnered with CEO and with the London Business School to systematically investigate the aspirations and expectations of a new generation of staff, the Millennials, to guide changes to business practices and global people strategy. Purpose To provide an in-depth qualitative and quantitative examination of how Millennials career goals, work styles and attitudes fit, or do not fit, with current management and business practices. To provide leadership with compelling evidence which supports potential changes and investments required to improve the attraction, retention, motivation and productivity of talent. To find out whether Millennials are similar or different in various regions of the world. To position PwC as thought leaders on intergenerational management. Scope PwC needs to better understand: How forces like technology and globalization are changing the nature of the employee/employer relationship around the world. What young professionals are seeking in both their careers and personal lives and how this fits with the current PwC culture. Whether there is a new global population of younger workers with common expectations and values. How generational changes differ across and within PwC firms globally. How the drivers of PwC staff retention vary across generations and around the world. How attitudes toward work and life among today s professional employees fit with PwC s current career paths and opportunities. Globalization, technology advances and changes in the nature of the employee/employer relationship are affecting everyone, not just those born in 1980 and after. However, Millennials are the inevitable future of the firm. Outcome In 2011, PwC, the University of Southern California and the London Business School launched a unique and unprecedented global generational study. A wide range of data was gathered from PwC employees and partners across the globe involving people from different generations, job levels and cultural backgrounds. This document reports the details of the study and its conclusions. Through the depth of data collected and issues addressed, a set of findings emerged that, in combination with one another, paint an overall picture for the firm. Each section of this document has a specific focus and reports a summary of major findings. A companion document contains the full set of statistical results. 12 PwC s NextGen: A global generational study 2012

13 The largest global generational study ever conducted 44,000 surveys were completed 18territories participated 1,000 Millennials and 45 leaders jammed 300 interviews and 30 focus groups conducted Participating territories Brazil Canada Central and Eastern Europe (CEE) CaTSH (including China, Taiwan, Hong Kong, Singapore, Macau) France Germany India Italy Japan Korea Mexico Middle East Netherlands South Africa Spain Switzerland United Kingdom United States

14 New world of work The world has changed... information is more readily available, people are more interconnected and career expectations have evolved. Technology Technology has radically changed the world providing access to both people and information. People can work at home and still be connected to colleagues in the office. Information about the organizations where we work, the people with whom we work and alternative job opportunities is readily available and openly shared among people on the Internet. Mobility It is easier today to move from one city to another (or one country to another) than it was in the past. The improvements in technology make it possible to keep in touch with distant family and friends, which makes both moving away and moving back easier. Increased mobility broadens the employment options available to employees because they are not restricted to a particular geographic area. Many young people expect and desire international work experiences that are readily available in today s global economy. Employer-employee relationship Beliefs about the reciprocal obligations between employees and their employers have shifted. The Millennial generation has grown up with no illusions that their employer will fulfill all of their needs and desires. They do not expect their employers to manage their careers for them or to provide them with job security over the course of their career. At the same time, young employees expect organizations to provide them with constant opportunities to develop professionally and are impatient when their needs are not met. 14 PwC s NextGen: A global generational study 2012

15 Matching PwC s business practices with the new workforce reality PwC continues to have a powerful employment brand worldwide. Aspirations to become partner People are proud to work at PwC, and most have a good sense about the trade-offs involved in working in client service. They choose to join PwC because of the work experiences, developmental opportunities and rewards they expect to receive. At PwC it has long been assumed that if the firm paid people fairly and gave them a shot at financial security and ownership as a partner, the best and brightest would stay, do quality work and put up with the demands of busy periods. Yet retaining employees in today s world has become more complicated. Employees today come into the firm with a different mindset and set of expectations. They are very knowledgeable about job alternatives and the variety of career opportunities available to them. Millennials currently make up most of the workforce at PwC, and are quickly moving into management roles. It is widely believed that the Millennial generation is different from past generations and that some of these differences result in choices to leave PwC earlier than their predecessors. PwC conducted this study because leadership realizes that the firm needs to understand who these young people are, what they want from work and what are the largest factors contributing to their wanting to stay versus leave. Who stays and who leaves will determine the nature of the firm in the years to come. The firm s challenge is how to retain the best and the brightest for as long as possible in this new environment. What drives an employee s attachment to or withdrawal from the firm at all career stages? Does this new generation make trade-off decisions differently? Are there differences across PwC s territories around the world? Knowing the answer to these questions is crucial to PwC. If the new generation is fundamentally different, the firm may need to rethink its approach to motivating and engaging employees to assure a cadre of managers and partners who can lead PwC into the future. So what did we do to investigate this? Japan Italy South Africa Canada Netherlands United States CEE Spain Switzerland CaTSH UK Middle East France Korea Germany India Brazil Mexico Overall 9% 20% 22% 13% 20% 30% 16% 18% 32% 17% 15% 29% 20% 17% 27% 22% 22% 31% 23% 21% 17% 24% 28% 26% 26% 13% 28% 29% 17% 22% 29% 23% 27% 30% 20% 30% 31% 17% 25% 32% 32% 37% 34% 25% 43% 36% 40% 42% 41% 36% 57% 42% 39% 57% 26% 23% 32% Associate Senior associate Manager PwC s NextGen: A global generational study

16 PwC s NextGen Study Study participants Data were collected from PwC 1 employees working in 18 different global territories across job levels, lines of service and generational groups. To compare Millennials around the world, we organized the 18 territories into five clusters based on levels of economic development (per capita GDP) and cultural values. The clusters are: West highly developed: Canada, United States West less highly developed: Brazil, Mexico Central highly developed: France, Germany, Italy, Netherlands, Spain, Switzerland, United Kingdom Central less highly developed: CEE, India, Middle East, South Africa East: CaTSH (China, Taiwan, Hong Kong, Singapore, Macau), Japan, Korea In this report, client service staff and manager jobs are defined as: Career stage 1. Approximately the first two to three years working at PwC; comparable to the title of associate or consultant in many territories. Referred to as associate in this report. Career stage 2. Approximately three to six years working at PwC; comparable to the title of senior associate or senior consultant in many territories. Referred to as senior associate in this report. Career stage 3. Approximately seven to nine years at the firm; comparable to the title of manager in many territories. Referred to as manager in this report. Career stage 4. The last client service career stage before partner which includes senior managers or directors in many territories. Referred to as senior manager in this report. In the text we use staff to refer to associates and senior associates, (client service employees below manager). We use managers to describe those below partner in management roles. We use employees to refer to all staff and managers, excluding partners. Throughout the report we use only career stages 2 and 3 when we compare Millennials and non- Millennials to separate the effects of career stage from generational differences. Client Service survey respondents Survey respondents Sources of data Global respondents Assurance 14,931 Tax 7,472 Advisory 8,450 Global % Millennial Associates 9,461 94% 26 Senior associates 8,525 83% 29 Managers 5,652 49% 33 Senior managers 4,785 9% 38 Partners/principals 2,430 1% 46 IFS 13,315 Total 44,168 Global average age Total 30,853* 62% 32** *Total does not include IFS respondents **The survey sample has a relatively larger proportion of higher level employees, which raises the average age to 32. The estimated global average age for PwC client service staff is 29. Global respondents Surveys Data from an anonymous web-based questionnaire were used to systematically examine factors traditionally associated with turnover and employee attitudes toward one s employer. These data were also used to compare Millennials with older generations. Survey results are presented as percentages of employees who agree or strongly agree with the questions asked. Interviews and focus groups Structured interviews were conducted with PwC employees who participated either alone (N=292) or in focus groups (N=31). We asked about participants experiences at the firm and about their expectations, preferences and aspirations for their lives and careers. Key themes were identified through systematic coding and analysis. The most prevalent themes are presented as the percentage of respondents who mentioned them. Social media jam A three-day interactive social media forum was hosted by the London Business School, December , examining four major themes: PwC and me, experiences and opportunities, my lifestyle and technology. Participants were invited to participate from each territory, and more than 1,000 Millennial employees and leaders participated. 16 PwC s NextGen: A global generational study 2012

17 PwC is a Millennial organization The rise of Gen Y: Client service projected population % 49% 13% 48% 40% 12% 60% 30% 10% 70% 22% 8% 78% 16% 6% 84% 11% 5% Gen Y Gen X Baby Boomer % 29 of respondents are Millennials years of age the estimated global average PwC s NextGen: A global generational study

18 Who are the Millennials? Millennials are those who were born between 1980 and They currently are under 33 years of age. Within PwC, Millennials are typically unmarried (75%), have no children (92%) and have come to PwC straight from a university (75%). Millennials have entered the workplace with the expectation that they need to manage their own careers. Due to societal shifts in the past 30 years, they do not expect to stay with one organization forever, nor do they expect the firm to provide them with lifelong employment. They realize that they have to keep developing their professional skills so that they are marketable. Do you see generational differences in expectations at the firm? The overwhelming response was: Perceptions of Millennials at PwC by Millennials and non-millennials (from interviews) Millennials want more work/life balance Millennials communicate more informally Millennials are tech savvy and prefer and IM for communication Millennials are less committed and more likely to job hop Millennials are more likely to speak up and challenge the status quo Yes Results demonstrate that both Millennial and non- Millennial employees perceive the younger generation at PwC to be different from the older generation in important ways. I just feel that the younger generation is so much better in terms of being connected with the rest of the world, with their peers, with community, that they understand a little bit more the alternatives and options that are available to them. Partner 18 PwC s NextGen: A global generational study 2012

19 Millennial myths The interviews clearly show that there are many myths in circulation about Millennials, and that both Millennial and non-millennial employees believe them. But what myths do we find to be accurate and which are in conflict with reality when we look at real data? To test whether there are any true generational differences, we compared Millennials and non-millennial employees at the same career stage (senior associate and manager job levels). We find: Myth: They are more likely to job hop True. 62% of Millennials expect to work for one organization longer than nine years vs. 70% of non-millennials. Myth: They benchmark their compensation True. 60% of Millennials and 57% of non-millennials say they have looked up compensation on the Internet. 43% of Millennials say they have discussed their pay with co-workers, vs. only 24% of non-millennials. Myth: They are less willing to do the boring and repetitive jobs True. 15% of Millennials are more likely to feel that their jobs are routine, boring and lack variety vs. 10% of non- Millennials, even if in the same roles. Myth: They think work interferes with their personal life True, but for all generations. 71% of Millennials and 64% of non-millennials consider the demands of work to interfere with home and personal/ family life. Work life interfering with personal life is more strongly related to Millennial turnover (more on this later). Myth: They challenge authority True, but for all generations. The reality is that 92% of Millennials and 91% non- Millennials agree that if a supervisor s performance appraisal does not fit with their expectations, they would discuss it with the supervisor. 41% of Millennials agree that it is often necessary to bypass hierarchical lines in order to have efficient work relationships, which is similar to 37% of non-millennials. Myth: They want more flexibility True, but for all generations. The reality is that more than 60% of respondents want the flexibility to occasionally work from home and to shift their working hours. Myth: They think face time is unimportant True, but for all generations. 52% of Millennials and 58% of non-millennials do not believe that spending time in the office shows they are working hard. Myth: They are entitled True, but for all generations. More than 60% of Millennials and non-millennials say that they demand the best because they are worth it. 50% of respondents say they believe they deserve special treatment. Myth: They prefer to communicate using technology Partly false. Although 74% of Millennials and 58% of non-millennials say they are likely to contact co-workers through social networking sites about task-related issues, 96% of Millennials and 95% non-millennials want conversations about their careers to happen face to face. Myth: They want their parents to be involved in their work life Mostly false. 12% of respondents think it is a good idea for PwC to provide parents with their child s job offer letter; 11% of partners agree. 8% of respondents think it is a good idea for PwC to provide parents with their child s performance feedback. Preferences for parental involvement tend to be higher in developing nations. Myth: They are less committed False. 46% of Millennials and 44% of non-millennials feel committed to PwC. Generation vs. job PwC The vast majority of employees start working at PwC at a relatively young age. The evolution of their careers and their lives outside of work develop in parallel. When people start their working lives, they typically are not attached. In other words, they are not married, do not have kids or mortgages, and have not committed to a particular employer or career path. As they gain experience, move through the career stages at PwC and explore their career options, they mature and develop commitments outside of work. As they move through the career stages, they balance a more complex life, and often struggle with the competing demands of work and personal life. PwC s NextGen: A global generational study

20 In some cases, the myths about Millennials seem to be equally true of non-millennials. In other cases, there is some truth to the belief that Millennials are different from non-millennials and perhaps different enough for it to affect the business. The question for PwC today is: Are there differences that matter and do any of these differences imply that PwC needs to change how it manages its workforce? To answer this question, this study examined the critical relationships among the work factors that drive employee retention, commitment to the firm and satisfaction with the work and their careers all are critical components of PwC s long-term success for both Millennial and non- Millennial employees. 20 PwC s NextGen: A global generational study 2012

21 We all need a pat on our backs. Appreciation and recognition are important aspects of our professional lives. Appreciation is the spark that keeps the fire in me alive. Millennial Jammer So it s more like I have a personal life and I can, like, work around it. Not the other way around. Millennial Associate I feel very restricted if I have to do the same task over and over and I then find it very difficult to concentrate for a long time. I feel that I have to be challenged a lot in my work to feel satisfied. Millennial Jammer PwC s NextGen: A global generational study

22 What does it take to retain people today? To retain the people needed to secure PwC s future success, the study shows that the firm needs employees to feel satisfied with their jobs, committed to the firm and that they are thriving at work. These three areas of emotional connection to the firm are true in all five regions and for Millennials and non-millennials. How does PwC get people to feel this way? The study found a number of factors that drive employees emotional connection with the firm and, therefore, retention. These factors can be categorized into four groups: Job satisfaction The degree to which employees are satisfied with their jobs. For example, Overall I am satisfied with my job at PwC. There are no overall differences by generation. Commitment to PwC The degree to which employees feel emotionally attached to the firm and feel that PwC shares their values. For example, I feel a strong sense of belonging to my firm. There are no overall differences by generation. Thriving Whether employees have energy and vitality at work. For example, I look forward to each new day at work. Millennials report lower thriving than non-millennials when working in the same jobs (comparing Millennials and non-millennials among senior associates and managers) Balance and workload: the ability to balance their work and personal lives. This includes a manageable workload, flexibility and the potential to access nontraditional career paths. Engaging work, development and opportunities: the experiences they have when doing the work, how meaningful and interesting the work is, and how much they grow and develop while doing it. People and teams My PwC community: the people that employees interact with at PwC. This includes their community of colleagues they work with, their teams, their supervisors and their larger network. Competitive pay and job opportunities: how they are rewarded for doing the work in comparison to their colleagues at PwC and in comparison to the jobs they could be doing elsewhere. This includes whether they feel marketable and have job alternatives. Global firmwide findings and differences across regions and generations will be explored in the sections of the report that follow. Cultural and regional differences These factors operate in all regions and across generations, but are differentially important in different regions and across the generations. All CS managers and staff (% agree/strongly agree) West highly developed West less highly developed Central highly developed Central less highly developed Intention to turnover 21% 23% 22% 31% 24% Job satisfaction 73% 79% 72% 62% 59% Commitment to PwC 54% 65% 46% 47% 38% Thriving 47% 57% 55% 56% 44% West highly developed: Canada, United States West less highly developed: Brazil, Mexico Central highly developed: France, Germany, Italy, Netherlands, Spain, Switzerland, United Kingdom Central less highly developed: CEE, India, Middle East, South Africa East: CaTSH (China, Taiwan, Hong Kong, Singapore, Macau), Japan, Korea East 22 PwC s NextGen: A global generational study 2012

23 The science behind should I stay or should I go PwC drivers of retention Environment and practices drive the emotional connection 1 Balance and workload Work/life imbalance Impact of the workload Manageability of the workload 2 Engaging work, development and opportunities Work that is interesting and stimulating Support for professional development 3 4 Knowledge and influence about opportunities People and teams My PwC community The team Mentors and supervisors Friendship at work Competitive pay and job opportunities Perceived pay equity Emotional connection drives retention Thriving Commitment to PwC Job satisfaction Retention Job opportunities at PwC vs. elsewhere PwC s NextGen: A global generational study

24 1 Balance and workload Work/life imbalance Work/life imbalance measures the extent that demands of work interfere with personal or family life, producing strain and the need to make changes to plans outside of work. The workload at PwC and its impact on employees work/life balance is a major contributor to all major areas of our model thriving, job satisfaction and commitment to PwC and has a direct and very strong impact on turnover. Where PwC stands 66% of PwC employees agree or strongly agree that work demands significantly interfere with their personal lives. In interviews, PwC partners and staff believe that work/life imbalance is the primary sacrifice required to be successful at PwC (83% of staff, 73% of managers and senior managers and 62% of partners). 40% of those interviewed believe that partners have a low quality of life and spend too little time with their families in general and their children in particular. Among the 4,000 comments from Millennial Jammers, many that addressed the challenges of work/life balance and workload. These can be summarized as: Achieving balance. PwC is a hard-working community in which many people work long hours and some, particularly those in urban centers such as Mumbai, Sao Paulo and London, have daily two-hour commutes. However, there were few complaints that work is overwhelming. Rather, there was awareness that there is a personal responsibility to develop strategies for dealing with the potential stress of a heavy workload. This is a group that feels prepared to engage in selfmanagement, but, to do so, need time for exercise (an important factor) and to have a working rhythm that creates both times of high pressure (the busy season) followed by periods of less pressure. Working flexibly. For many, the context of work can be tough with long hours. At home, small children and demanding parents can create multiple sources of pressure and commitment. Millennials at PwC feel that they can manage themselves out of this pressure, but to do so they need the opportunity to work flexibly in terms of the hours they work and the location of their work. For those living in small, crowded inner-city apartments, working at home is unappealing. However, for those with long commutes and small children, it is clear that flexibility can make a difference. The groups were unanimous in stating that their capacity to work flexibly depends on having a good infrastructure in place and working with managers who are focused more on output than being present. 24 PwC s NextGen: A global generational study 2012

25 Cultural differences Perceptions of work/life balance are determined in part by culture. PwC employees in the East region are less likely to agree that work interferes with their personal lives even though they report working the same amount or higher number of hours as those in the West. However, although scores in some regions are lower, work/life imbalance shows significant correlation to the intention to turnover in all regions. Work/life imbalance All CS managers and staff (% agree/strongly agree) West highly developed West less highly developed Central highly developed Central less highly developed Work/life imbalance 70% 72% 68% 62% 57% Generational differences Millennials and non-millennials in the same career stage generally report similar levels of work/life imbalance, but Millennials have a somewhat stronger reaction to work/life imbalance than non-millennials. Thirty-four percent of Millennials in senior associate and manager roles who report high work/life imbalance agree that they are likely to leave PwC in the next 12 months compared with 30% of non-millennials in the same jobs. East In the East and the highly developed regions, work/life imbalance more strongly affects the organizational commitment of Millennials as compared with non-millennials. In the developed regions, it also more strongly predicts turnover and job satisfaction for Millennials. Intention to turnover by work/life imbalance Senior associate (CS2) and manager (CS3) (% agree/strongly agree) Work/life imbalance Non-Millennial Millennial Low 13% 13% Medium 15% 16% High 30% 34% PwC s NextGen: A global generational study

26 Working extremely high hours during busy periods is related to: Significantly higher intention to turnover Lower pay equity and job satisfaction Greater work/life imbalance Lower perceived supervisor support Greater attractiveness of alternative jobs outside PwC Working extremely high hours is not related to: Commitment to PwC and their teams Sense of energy and engagement (thriving) at work Developmental support, professional learning on the job and interesting work Willingness to contribute and improve their teams Pride from being part of their teams, camaraderie and support from their team members and shared understanding on the teams about the work and how to do it A sense of feeling appreciated Impact of the workload A fundamental element of client service work is meeting the clients demands. Long hours are nothing new at PwC, but more than half of managers and staff above the rank of associate report that their workload is too much or unreasonable. How much work do you have? (% respondents) Too little Little About right Too much Unreasonable Associates 2% 5% 52% 36% 5% Sr. associates 1% 3% 39% 49% 8% Managers 1% 2% 37% 51% 9% Sr. managers 1% 2% 39% 49% 9% Partners 1% 2% 44% 48% 5% We found that employee attitudes and turnover are more heavily impacted by long hours during busy periods than by the average hours worked over the year. To understand how working extremely high hours during busy periods impacts employees, we compared those who reported working the highest number of hours or extremely high hours (top quartile in their territory) with their peers who reported working high hours (second quartile) and with their peers who reported working lower hours (third and fourth quartiles). Working extremely high work hours during the busiest time of year is sowing the seeds of turnover that may lead some of the most productive employees to leave. Just because they are productive and engaged with the work does not ensure they will stay. 26 PwC s NextGen: A global generational study 2012

27 Heavy workload and performance ratings We also examined the relationship among performance rating, hours worked and intention to turnover. Top-rated performers (performance rating=1) Almost three quarters of top performers work either extremely high or high hours during busy periods. Top performers who work these high hours are more likely to leave the firm than top performers who work lower hours during busy periods. Second tier-rated performers (performance rating=2) Almost two-thirds of second tier-rated performers work either extremely high or high hours during busy periods. Those who work extremely high hours are also more likely to leave the firm than their peers who work lower hours during busy periods. Top-rated performers are most likely to work extreme hours during busy periods. Across all performance levels, those working extremely high hours during busy periods are more likely to leave the firm than others who work fewer hours. Hours worked during busiest time of year by performance rating All CS managers and staff (% respondents) Extremely high hours High hours Lower hours Extremely high hours 38% 32% 27% 33% 31% 29% Intention to turnover All CS managers and staff (% agree/strongly agree) High hours Lower hours 29% 37% 44% One (highest performance rating) Two Three 25% 31% 38% 23% 25% 30% 18% 21% 24% One (highest performance rating) Two Three A good manager also has to organize the work on the team. Sometimes you have to work a lot and go home late, but if you have to do that all the time for six months, that is a problem for me; if it happens very often that is a sign of lack of organization. Associate PwC s NextGen: A global generational study

28 Flexibility means being able to manage my work schedule around my personal endeavors without preventing access to career opportunities. Manageability of the workload Work/life balance programs have become increasingly available to PwC employees around the globe. However, the perception and use of these programs vary. We explored the impact of these perceptions on employee attitudes, as well as employee preferences for flexibility. Millennial Jammer The firm should be flexible enough to allow you to have family commitment as a priority and somehow manage things at work. Millennial Senior Associate Perceived negative career consequences for using work/ life programs Many territories have introduced work/life programs that enable employees to have more flexible hours and schedules. For these to be effective, employees have to feel they can take advantage of them without negative long-term career consequences. Where PwC stands 38% of PwC employees believe that there are negative career consequences from taking advantage of work/life balance programs at PwC. This perception is less prevalent in the East region where 30% perceive negative career consequences. Hours and flexibility The study revealed a clear desire on the part of PwC s employees for more flexible schedules and work arrangements. Assuming the total number of hours worked is unchanged, we asked people s preference for being able to work more flexible hours and locations. A majority of all PwC employees report that it is important or very important to have flexibility in when and where their work is done. Desire for flexibility Senior associate (CS2) and manager (CS3) (% important/very important) Occasionally doing work from home or from location of your choice Occasionally shifting your work hours later or earlier to better fit your personal life Being able to leave the work site for personal reasons Desire for flexibility All CS managers and staff (% important/very important) Occasionally doing work from home or from location of your choice Occasionally shifting your work hours later or earlier to better fit your personal life Being able to leave the work site for personal reasons West highly developed West less highly developed Non-Millennial Millennial Male Female Male Female 66% 64% 62% 72% 61% 69% 64% 66% 60% 69% 64% 69% 59% 61% 55% 64% 59% 64% Central highly developed Central less highly developed East 72% 68% 63% 63% 52% 69% 75% 65% 65% 54% 64% 69% 61% 62% 48% 28 PwC s NextGen: A global generational study 2012

29 Career flexibility Survey and interview findings show that a significant subset of PwC managers and staff would prefer an alternative to PwC s traditional high hour, fast promotion career path. Where PwC stands The NextGen survey asked employees what they are willing to trade off to get more flexibility. Trade-off for flexibility All CS managers and staff (% respondents) 30 hours 40% less pay Very slow promotion Male 1% 14% Female 2% 19% 40 hours 20% less pay Slow promotion 15% of men and 21% of women, worldwide, would be willing to give up pay and slow down promotion opportunities to work a 40 hour or less regular work schedule. PwC s NextGen: A global generational study

30 Takeaway: Balance and workload PwC has an opportunity to improve retention, job satisfaction, thriving and commitment by better managing people s work/life balance and their workload. These issues relate strongly to how staff and managers feel about the firm and to their likelihood of leaving. This is true in all regions, for men and women and for Millennials and non- Millennials. Working extremely high hours during busy periods has a negative impact far greater than the average hours worked throughout the year and an impact that disproportionately affects the firm s top performers. There is not yet a widespread belief that employees can take advantage of PwC s work/ life programs without endangering their careers. Balance is an even bigger issue in the West and Central developed regions and in the East where Millennial commitment to PwC is especially negatively impacted by imbalance. Imbalance also has a stronger relationship to Millennial turnover in the West and the Central developed regions. 30 PwC s NextGen: A global generational study 2012

31 PwC s NextGen: A global generational study

32 2 Engaging work, development and opportunities Work that is interesting and stimulating When employees find the work challenging, and are able to learn and develop their professional skills, they are more likely to stay at PwC. When they receive good communication about staffing decisions and can influence the assignments they work on, they are more committed to the firm and satisfied with their jobs, which leads to retention. The importance of challenging work was addressed by measuring the extent to which people find their work routine, boring and repetitive. A relatively small percentage of PwC managers and staff report that their work is repetitive. Not surprisingly this perception is more common among employees at earlier career stages. However, when comparing Millennials and non- Millennials at the same career stage, 15% of Millennials report their work as boring and repetitive compared with 10% of non-millennials. Where PwC stands Although the percent who agree that their work is boring and repetitive is quite small, it is associated with lower thriving at work and lower job satisfaction in all regions. The negative impact on thriving is not as strong for Millennials in the East. Boring and repetitive work Senior associate (CS2) and manager (CS3) (% agree/strongly agree) Millennials Non-Millennials Overall Senior associate 16% 13% 16% Manager 12% 8% 10% Total 15% 10% 13% The Jammers weigh in: In general, Millennial Jammers reported that learning and boosting skills is critically important for this generation of professionals. Faced with competitive and increasingly connected labor markets, and rapidly changing skill sets, many see continual learning as a crucial element of their working relationship with the firm. Engaging in meaningful work. For many, work itself is central to their positive day-today experiences of the firm. They appreciate work that is meaningful, by which they mean work that provides them with a choice, creates variety, provides appreciation and value for their contributions, and provides constructive and clear feedback. For many, the work itself is a real source of motivation, and perhaps more could be done to describe the work tasks in terms of meaningfulness, while also enabling people to exercise more choice in finding meaningful work. Boosting productivity. Many members of the Millennial generation are in a crucial building stage of their work skills, and want to work as productively as possible. They see new technologies, such as social collaborative tools and business analytics, as having the potential to substantially increase productivity and knowledge management. However, there is some frustration about the firm s use of current technology, particularly around Lotus Notes, resource allocation and the speed of decision making. 32 PwC s NextGen: A global generational study 2012

33 Do you think PwC makes the best use of new technology? Professional employees decide where they work, in part, based on the tools and technology that they have access to and from which they are able to learn. In our interviews, we asked PwC partners and staff whether they thought that PwC made the best use of new technology. There were few generational differences, and older employees were actually less likely to feel that the firm took advantage of new technology. Overall, only a quarter of PwC staff in our interview sample are satisfied with the use of technology at work. Recommendations for improving the use of technology include providing employees with the technological resources to support working from home, making better use of social media, and updating existing hardware and software and allowing the use of iphones. Do you think PwC makes the best use of new technology? % of interview respondents Good use of technology Associates and senior associates 38% 24% 27% 0 50 Managers and senior managers Partners What issues does PwC have with new technology? % of interview respondents Outdated hardware or software Limited cell phone options 16% 17% 13% 14% 11% 7% I think it could be better. Our notebooks are very [laughs] old, and they don t work that well. We are still using Windows XP, which is, I don t know, 10, 15 years old, and the notebooks are not that advanced. I think we could make a better use of technology. Millennial Associate Expenses and travel are two things that could be more automated. Millennial Jammer Everything is very segregated. If I want to do research on what people have done I use one portal. If I want to see the firm s policies on risk management, that s a whole different set of portals. For policies on sick leave, etc., that s a different program. It s all very segregated, and can be very confusing. Millennial Associate I think that PwC offers access to a lot of research tools and companies, but we re not fully aware of them. Millennial Jammer Poor tech support to work from home Associates and senior associates 10% 12% 13% 0 50 Managers and senior managers Partners The biggest need is to enable people to identify the right experts and who does what in an office, a country and crosscountry, through a different set of criteria (expertise, sector, languages spoken, clients worked on, etc.). Millennial Jammer PwC s NextGen: A global generational study

34 Support for professional development PwC s support to develop the skills that staff and managers need to succeed in the profession is a key reason why many people join and stay with the firm. In all regions, employees who see the firm as supporting their professional development report more positive feelings toward PwC and less intention to turnover. Where PwC stands Despite the significant effort that PwC puts into professional development globally, overall less than half of managers and staff agree that the PwC places a high priority on their professional development and has a good process for developing employees. 48% of Millennials vs. 37% of non- Millennials believe PwC supports professional development Millennials and career satisfaction Career satisfaction is the degree to which employees are satisfied with the pace of their advancement and the progress they have made toward their overall career goals. Typically, career satisfaction has been found to increase retention in firms: the more satisfied employees are with their advancement, the more likely they are to remain with the firm. Interestingly, at PwC this is true only in the Central clusters, and in the West less highly developed region. Career satisfaction does not relate to retention in the East or the highly developed West region. For Millennials, career satisfaction is a much weaker predictor of retention than for non-millennials at the same career stage. This is especially true in the Central and West highly developed regions and in the East where career satisfaction works in the opposite direction. This means that in these regions, Millennials who are achieving career success and satisfaction may be more likely to leave the firm than those who are not. Support for professional development is a stronger predictor of job satisfaction and thriving for non- Millennials than for Millennials. Cultural and regional differences In all regions, employees who see the firm as committed to their development respond positively. Development support is particularly important for job satisfaction and retention of Millennials in the East region. Managers and staff in the West developed region report significantly higher support for professional development than in other parts of the world. 34 PwC s NextGen: A global generational study 2012

35 Knowledge and influence about opportunities Staff and managers know that the assignments they work on are critically important to their professional development and career advancement whether within the firm or outside. Global mobility One important form of development is secondments. Though there are large regional differences in preferences for global mobility, around the world Millennials more than non-millennials aspire to global mobility assignments as part of their professional development at PwC. When comparing Millennials and non-millennials at the same career stage, 37% of Millennials report they would like to go on a global mobility assignment compared with 28% of non-millennials. Only 33% of managers and staff feel they are informed about staffing decisions 55% of managers and staff feel they have control over assignments Global mobility Senior associate (CS2) and manager (CS3) (% respondents) Not currently on a global mobility assignment but have been in the past Not currently on a global mobility assignment but would like to go in the future 5% 7% 37% 28% 0 50 Millennials Non-Millennials Cultural and regional differences The desire for a global mobility assignment ranges from a low of 30% in the West and Central highly developed regions to a high of 55% in the West less highly developed region. Jammers want to move! For many people across the world at PwC, this is one of the primary advantages of working with the firm and an important source of engagement. PwC s global community creates possibilities for individual members to build a global skill set, which could become a powerful PwC signature. Jam participants see a role of the firm to be creating the practice-and-process architecture for secondments, global assignments and mobility. Encouraging and enabling these young people in their belief that they are part of something bigger is crucial to their engagement and longevity at the firm. PwC s NextGen: A global generational study

36 Takeaway: Engaging work, development and opportunities Interesting work opportunities and a chance to continually develop professional skills are core features that bind professional employees to their firm. On the positive side, very few client service employees feel their work is boring and repetitive. On the other hand, the extent to which work is perceived as such relates negatively to the thriving and job satisfaction piece of the turnover equation. Millennials are more likely than others, at the same career stage, to report their work as being boring and repetitive. Support for professional development and influence over job assignments are areas where PwC can make changes that can increase retention. There are regional differences, both in the importance of these variables and the current levels of favorability, which perhaps call for different approaches in different regions. Overall: Less than half (48%) of Millennials think the firm has good support for professional development. Only one-third (33%) of managers and staff at PwC think they have adequate information about staffing decisions that affect their day-to-day work in the short term and their career in the long term. Slightly more than half (55%) of client service employees at PwC are satisfied with the amount of control they have over their work assignments. 36 PwC s NextGen: A global generational study 2012

37 PwC s NextGen: A global generational study

38 3 People and teams My PwC community Employee attitudes toward PwC and intention to remain with the firm are also driven by the community of people that employees interact with at work: their teams, their mentors and supervisors, their friends and colleagues. A sense of community derives from feeling appreciated, respected, supported and having friends at work. My PwC community Mentors and supervisors Friendship at work The team Jam themes around community Connecting to work colleagues. For many in the jam, their work colleagues are a real source of friendship and support. Peer-to-peer relationships figure more strongly than boss-subordinate relationships. The key in upward relationships is that they are trusted, and that managers and partners have confidence in the ability of their Millennials to deliver. Perhaps because of this, the performance management system came under criticism for being too formulaic and not sufficiently based on trust. Connecting to the community. There was a hunger within the jam discussion to connect to the wider community in an informal way. People found the jam itself an exciting and novel experience, and appreciated the opportunities it provided. It seems like there is a real untapped potential to bring this cohort together in a more focused, action-oriented way. I think there s a degree of pride that everybody seems to have working here. It seems to be quite an auspicious place to work. And if you see somebody outside of the office, there s that acknowledgment of we re a part of something. I think obviously there s definitely a sense of community. Millennial Senior Associate 38 PwC s NextGen: A global generational study 2012

39 The team Teams are the way work gets done at PwC. Survey results indicate that team experience plays an important role in shaping employee attitudes toward PwC. Team commitment measures personal meaning and belonging that comes from team membership. Team commitment results from shared understanding, trust and team support, and from feeling one s contribution is valued by the team. Team commitment is a significant predictor of commitment to PwC across all generations and regions, and this is especially true for Millennials across the firm. Shared understanding of team goals and processes Team trust and support Feeling valued by my team Team commitment Commitment to PwC we have to work a lot into the evening, we have a good time together in the team, so there s a really strong team spirit and I appreciate that very much. So it s not just the work, it s also the time you spend together not working in the evening, having a drink together or having dinner together. Millennial Senior Associate I for one, really enjoy team-based work. I think team-based work usually works better, because it s several different minds thinking, aimed at a specific goal. And each person has different specialties or a different background, and all of them working together can lead to a result that one person alone would not be able to achieve. Millennial Associate Teamwork All CS managers and staff (% agree/strongly agree) Shared understanding 68% Trust and team support 73% Feeling valued by my team 68% Cultural and regional differences Levels of team commitment vary significantly across the regions, but greater team commitment is associated with higher commitment to PwC everywhere. Team commitment All CS managers and staff (% agree/strongly agree) West highly developed West less highly developed Central highly developed Central less highly developed East In the East and developed regions, team trust and support are especially important predictors of Millennials commitment to the team. 69% 74% 72% 67% 52% PwC s NextGen: A global generational study

40 Mentors and supervisors Mentors and supervisors are central to how employees experience work at PwC. We measured these issues in the survey asking whether employees feel appreciated at work and whether they feel their supervisor provides adequate support. Appreciation and supervisor support All CS managers and staff (% agree/strongly agree) Appreciation 55% Supervisor support 67% Well, I think I m lucky to have the coach I have. I have a good relationship, even friendship so I can come and talk to him about specific things. Millennial Associate Global and generational findings Although there are no generational differences in the perceptions of appreciation and support, these factors are stronger predictors of Millennials attitudes toward the firm and of their turnover intent. There are regional differences in the extent to which employees feel they are appreciated and supported. But, for Millennials and non-millennials in all regions, supervisor support and feeling appreciated relate to job satisfaction and thriving. Appreciation is an especially strong predictor of Millennials thriving in the Central developed region. Appreciation and support All CS managers and staff (% agree/strongly agree) West highly developed West less highly developed Central highly developed Central less highly developed East Appreciation 62% 57% 60% 46% 46% Supervisor support 76% 61% 66% 60% 60% 40 PwC s NextGen: A global generational study 2012

41 Millennial employees prefer more frequent recognition and developmental feedback than non-millennial employees in the same role. How often would you prefer to be rewarded or recognized for your work? Senior associates (CS2) and managers (CS3) (% respondents) More frequently (within a month) Monthly 16% 12% 25% 18% Quarterly 32% 31% Bi-annually 21% 29% Yearly 6% 11% 0 35 Millennials Non-Millennials Despite all of PwC s efforts, 26% of employees still say they do not have a true mentor at the firm and would like one. Staff and managers who have a mentor they trust at PwC report more positive attitudes toward the firm and are less likely to turnover. Do you have a mentor? All CS managers and staff (% respondents) Yes, and I m happy about it 64% Yes, and I wish I didn t 5% I want one and don t have one 26% I don t have one and don t want one 6% We have performance ratings every three months or so. That s highly dependent on your manager and whether or not they actually use that to hold you accountable. I don t think so in my case; they don t understand who is doing what, so they don t really know who is doing the brunt of the work. Associate PwC s NextGen: A global generational study

42 Friendship at work Friendship at work can be a defining feature of an employee s experience at PwC. We sought to understand the role of friends at work in our interviews and in the social jam. Results emphasize the importance of friendship and community at work, suggesting that they can improve the work environment and help to balance the strains created by job challenges and the long hours at work. How would you describe your community at PwC? (%of interview respondents) Friends at PwC No community Local 32% 17% 18% 16% 17% 29% 14% 13% When asked to define their community at PwC, managers and partners mentioned friends at work during interviews, but also included PwC colleagues working in other global locations, ex-pwc employees working in industry and clients in their description of their community at work. These results suggest that the relationships that constitute one s community at work shift over time with peer friendship being more salient in the early stages, and external linkages to clients and others across the firm becoming more salient for managers and especially for partners. Global My team External to PwC Lateral Immediate co-workers 10% 11% 12% 10% 15% 12% 7% 14% 24% 5% 6% 5% 10% 0 35 Associates and senior associates Managers and senior managers Partners I have developed very strong relations with some people. We take trips together, go on holiday together. We belong to a community of young people who work a lot. We are a young generation who want to have success in our careers and have a social life as well. We want to work we like it but we want to have fun too. That s the spirit of my grade and generation in PwC. Senior Associate 42 PwC s NextGen: A global generational study 2012

43 Takeaway: A community at work Day-to-day experience with the firm is shaped by the employees community at work. While workload, development and compensation define the transactional relationship to PwC, one s experience of a positive community at work provides a sense of belonging and personal attachment. This attachment in turn reduces turnover and can help greatly when transactional elements may no longer be sufficient to retain employees. All aspects of community experiences relate to commitment to the firm. Supervisory support and appreciation relate to job satisfaction and thriving at the firm. These relationships are true for Millennials and non-millennials across all regions. PwC has an opportunity to improve retention and commitment by improving people s experiences of their community at work through improved team processes and support. About onethird of employees feel that important teaming and supervisory support elements are not in place and only slightly more than half of employees feel appreciated. PwC s NextGen: A global generational study

44 4 Competitive pay and job opportunities Perceived pay equity How people compare their jobs with alternatives and whether they perceive their pay as equitable play a key role in retention and job satisfaction. Pay equity is how fair employees think their compensation is relative to others at PwC and at other organizations with comparable skills and responsibilities. Where PwC stands Pay equity varies widely across regions and territories, but there are no significant differences between employees of different generations at the same career stage doing the same jobs at PwC. Across all regions and generations, pay equity is positively related to job satisfaction and negatively related to turnover. 34% 35% do not feel equitably paid are neutral Pay and opportunities were major topics during the NextGen Millennial Jam. There is a strong awareness of salary compared with other companies. Many believe that PwC pays less than competitors in sectors such as banking, as well as the other big-four firms. However, they recognize the trade-off in three additional elements: brand recognition, the global presence of PwC and the possibilities for learning. The basis for fixing our annual salary hike and bonus should be transparent and fair. Very often, seniors appreciate us for our work and sometimes also award us a good rating during appraisals but at the end of the day, salary compensation is not proportionate to the rating/appreciation that we get. Millennial Jammer 31% feel equitably paid Cultural and regional differences Pay equity is a weaker predictor of intention to turnover for Millennials compared with non-millennials in developed regions and in the East. 44 PwC s NextGen: A global generational study 2012

45 Most PwC employees believe that they can earn more money elsewhere if they were to leave PwC. We measured how much additional compensation, relative to their current compensation at PwC, employees felt they could earn if they left today. While the compensation differences vary widely around the world, on average PwC employees think they could get a raise of more than 30% relative to their current compensation. Millennials are more optimistic about pay increases than non-millennials. At the senior associate and manager levels, Millennials believe they would increase their compensation by 33% compared with 24% for non-millennials. The grass is always greener on the other side I guess. But I ve gotten a few offers. As from what I hear there are good opportunities and life would be obviously better in terms of family, in terms of having more time. But I m of the type that basically I always think I need to learn more. And there is nowhere better to learn than here. Senior Associate Millennial Jammer Percent difference between PwC and perceived earnings potential elsewhere Associates Senior associates 31% 32% Managers 28% Senior managers 26% Total 30% 0 50 PwC s NextGen: A global generational study

46 Job opportunities at PwC vs. elsewhere The survey also measured employees perceptions of acceptable job alternatives (jobs that they could easily find right now). Many employees who choose to stay with PwC do so even though they believe they are sacrificing time, money and opportunities to be here. Where PwC stands Regionally, the percentage of employees who agree they could easily find an acceptable job elsewhere ranges from 45% in the East to 70% in the West highly developed region. Millennials report greater job alternatives than their non-millennial colleagues in similar roles. 69% of Millennial senior associates and managers report they have acceptable job alternatives compared with 59% of non-millennials at the same career stages. 61% of employees agree that they could easily find an acceptable alternative job somewhere else In all regions, the perception of job alternatives is positively related to intention to turnover. In the West highly developed, and the East regions, the relation to turnover is even stronger for Millennials. What do they expect in return? The benefits of PwC s global reach and brand Interesting and meaningful work Professional development opportunities Supportive community and good colleagues 46 PwC s NextGen: A global generational study 2012

47 Takeaway: Competitive pay and job opportunities There is significant room for improvement with only 31% of staff and managers indicating they feel their compensation is equitable. But it is important to note that perceived pay equity is also related to the type of work people are doing, the satisfaction they derive from working at the firm, the workload they have at PwC and whether they feel their pay is fair considering their contribution to the firm. Sixty-one percent of employees believe they could easily find an acceptable job elsewhere even higher for Millennials, who also believe they can achieve a bigger salary boost elsewhere. In this era of easy mobility, and quick access to information both through people s personal network and computer apps, PwC needs to be extremely vigilant about keeping employees satisfied with the overall deal both the transactional parts and professional and personal satisfaction. PwC s NextGen: A global generational study

48 Generational differences at PwC The NextGen study has shown that the model of emotional attachment and turnover holds for both Millennials and non- Millennials in all regions of PwC. The relative importance of these factors to different populations within the firm has implications for PwC practices. It also provides opportunities to the firm to establish itself as a global leader in managing today s and tomorrow s workforce. As would be expected, both perceptions of the various elements of the model and their relative importance of some factors change as PwC employees move through the job levels. As they progress, the nature of their work and accountabilities change, and their leadership responsibilities within the firm increase. Simultaneously, they move through different stages of their personal lives and may develop increased external responsibilities. These transitions are true for both Millennials and non-millennials, who tend in many ways to be more similar than different within a job level. But there are areas where the Millennials are different. How do the generations view the firm? The senior associate and manager levels are the two career stages where there are a large number of people from both the Millennial and non-millennial generations, who are doing similar work. Within these stages, employees have high levels of agreement in how they perceive the firm. Nevertheless, there are some areas where there are important differences. At the same career stages, Millennials: Are less likely to feel that they are thriving at work Are more likely to feel that they receive support for their development Are more likely to want to go on a global mobility assignment Prefer more frequent feedback Perceive more job alternatives Believe that they can get a larger salary increase if they leave the firm Are more likely to see their work as boring and repetitive What keeps them connected to the firm? Even if they perceive the firm similarly, some elements of the model are not equally important to Millennials and non-millennials. These elements are differentially related to commitment, job and career satisfaction, thriving, and to turnover intent. Both Millennials and non-millennials are keenly aware of what other firms are offering, but respond more strongly to different things. Millennials are more likely to leave if their social needs are not met, while non-millennials are more likely to leave if their more transactional needs for pay and development are not met. 48 PwC s NextGen: A global generational study 2012

49 Differences between Millennials and non-millennials in decisions to stay or go We compared Millennials and non-millennial employees at the same career stages (CS2 and CS3) and found that while the basic reasons for staying or leaving are the same for both generations, their relative importance varies across the two generations. This pattern of findings underscores the concern that a largely transactional deal, in which pay and development opportunities are the primary drivers of decisions to stay with PwC, is no longer sufficient. Millennials also desire to be supported and appreciated in return for their contributions to the firm, and to be part of a cohesive team. Millennials (at least in the East and developed parts of the world) also expect PwC to allow them to thrive in their total life, not just at work. Millennial Supervisor support Appreciation Team cohesion Work/life balance Non-Millennial Control of work Support for development Pay equity PwC s NextGen: A global generational study

50 Is there a global Millennial? While there is a global model of turnover and firm attachment that fits both generations and all regions of PwC, there are also some regional differences that relate to the market contexts, operating conditions and local cultures in the different regions. There are also some regional differences among the PwC Millennials around the world. Significant differences between Millennials and non-millennials are almost exclusively evident in three regions: the West developed region, the Central developed region, and the East region. In the West and Central less developed regions, there are almost no measured differences in what factors drive the two generations. Below are features that distinguish Millennials compared with non-millennials from one another in the Central and West developed regions and the East region. These differences raise questions about the effectiveness of the traditional approach of the firm to bring in bright people, provide professional development, move them through levels and then expect the allure of the partnership to retain the best and the brightest. West highly developed Central highly developed East region Millennials differ from non-millennials in that: Work/life Imbalance has a stronger direct impact on turnover Work/life Imbalance has a stronger negative impact on commitment to PwC and job satisfaction Work/life Imbalance has a stronger negative impact on thriving Perceived negative career consequences for using work/life programs more negatively impacts satisfaction and commitment to PwC Perceived pay equity has less of an impact on retention Perceived pay equity has less of an impact on career satisfaction Career satisfaction has less of an impact on retention Development support has less of an impact on thriving Development support has more of an impact on job satisfaction and career satisfaction Development support has more of an impact on retention Information about staffing decisions has more of an impact on job satisfaction West highly developed: Canada, United States; Central highly developed: France, Germany, Italy, Netherlands, Spain, Switzerland, United Kingdom; East: CaTSH (China, Taiwan, Hong Kong, Singapore, Macau), Japan, Korea 50 PwC s NextGen: A global generational study 2012

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52 Conclusion PwC is a Millennial organization and must be at the leading edge in dealing with generational changes in societies around the world. Millennials have grown up at ease with rapidly advancing communication technologies, in a period of unprecedented global mobility and connectedness, and with diminished expectations for a long-term employment relationship characterized by mutual loyalty. Millennials and non- Millennials at PwC widely believe that this younger generation is different from past generations. This study has shown that PwC Millennials are more similar than different from their older peers at PwC, but that there are important differences. These differences may require the firm to evolve its practices to better attract and retain today s workforce. Doing so will ensure PwC can continue to provide the excellent client service that has made the firm so successful. Balance and workload The work demands, particularly during busy periods, and the inability to balance work and life are the strongest factors that lower retention of all PwC employees: top-rated employees and lower-rated employees, Millennials and non-millennials, male and female, and in all regions of the world. While the issue crosses all demographics, we found that work/life balance issues are especially important to the Millennial workforce, particularly in the large, developed markets around the world. To significantly impact retention of top talent and future leaders, the firm must address: 1) the amount of work, particularly during busy periods; 2) the desire of employees for more flexibility in work schedules and career paths; and 3) fair rewards, meaningful work and a supportive environment in exchange for the workload. Engaging work, development and opportunities All PwC employees seek interesting job assignments and opportunities for development. They are also more satisfied and committed to PwC if they can influence their assignments. The Millennials are a generation that is well connected, informed about opportunities and oriented toward managing their own careers. They expect the firm to provide information about and the ability to pursue opportunities. At all levels, employees feel that the firm is underinvesting in tools for its professionals. These tools would allow greater efficiency, productivity and flexibility for the workforce. They are part of employees professional identity, and they influence the Millennials perceptions of the firm. People and teams my PwC community Millennials value appreciation and support from peers, supervisors and leaders, and are more likely to stick with PwC if they feel committed to their teams. Although particularly important to Millennials, these same factors increase retention for everyone. While workload, development and compensation define the formal employment relationship at PwC, building strong teams and supportive supervisory relationships connects employees emotionally to their PwC community. Competitive pay and job opportunities Almost half of PwC employees do not feel appreciated for their contribution, and only 31% feel fairly compensated. Most PwC employees believe they can easily find another acceptable job that, at least in the short term, offers a salary increase and this is even more true for Millennials. The interviews made clear that employees sense of pay equity depends largely on the demands placed on them. Pay is a somewhat weaker factor in retention and a much weaker determinant of career satisfaction for the Millennials, who choose to stay at PwC for other reasons. Nevertheless, the firm cannot afford to let down its guard with respect to equitable and motivating pay: pay dissatisfaction combined with unreasonable work demands are a major contributor to turnover. The deal is changing Taken as a whole, this study shows that the traditional deal at PwC does not carry as much sway with Millennials. This generation is less interested in putting up with the time demands required for success in the firm, and are less enticed by the promise of financial rewards and the prestige of making partner. This generation has entered their formative years at work with an expectation of being able to balance work and personal lives and to control their destiny. The firm will have to take these issues seriously and accommodate these changing orientations. In this era of easy mobility and quick access to information, PwC needs to be extremely vigilant about keeping employees satisfied with the overall deal pay, workload, professional development and personal satisfaction. Global variation Different regions of the globe are in different places with respect to the Millennial transition. Economic development, labor market characteristics and local culture impact the dynamics of retention. In contemplating actions, each territory will have to find its way. Yet the study also finds compelling evidence that this is a global workforce, and that the retention model holds across the globe. There is a very strong PwC culture that makes people more similar than different in how they see the firm. Furthermore, the continued integration and emergence of the global labor market and the technological changes that have enabled it have affected all generations. 52 PwC s NextGen: A global generational study 2012

53 So what is the firm to do? The workforce is changing, the world is increasingly interconnected technologically and organizational loyalty has decreased. By looking at the retention dynamics in the firm, and contrasting Millennials and non-millennials, this study has identified the major areas important to the evolution of the firm s human capital practices. Key learnings 1. Millennial myths busted. While Millennials may be more tech savvy, globally focused, informal and more willing to share information, they are not more entitled or less committed, and are willing to work hard. Key learning: Perceptions of Millennials exist, but, in many cases, that s all they are perceptions. 2. Flexibility matters. Maintaining a sustainable work/life balance is critically important to all generations, but even more so among Millennials. More than 60% of PwC employees report that their workload has a negative impact on their personal lives. More than 60% also feel that it is important that PwC offers the ability to shift work times, places and hours; 40% say that our partners sacrifice too much; and, 15% of men and 21% of women would take less pay and a slower promotion for a 40 hour schedule. Key learning: People, at all levels, have a significant desire for balance and flexibility. PwC needs to supercharge its efforts in this area. 3. Understanding generational differences. Although all employees are driven by the same set of factors, Millennials focus more on elements of the employment relationship such as work/life balance, appreciation, supervisor support, and their teams, while Gen X focuses more on perceived pay equity, development and control over work assignments. Key learning: Millennials want to be supported and appreciated non- Millennials want to be empowered and rewarded. PwC needs to understand and manage these differences. 4. Perceptions about pay. At the senior, senior associate and manager levels, Millennials feel they can increase their compensation by 33% and non-millennials by 24% if they got a job elsewhere. Additionally, 34% of the client service employees do not feel like they are paid equitably. They judge their pay and rewards by what s expected of them, the work they do, the opportunities they have and whether or not they are appreciated and valued. Key learning: A lack of work/life balance, a belief that they can make more outside the firm and unlimited access to outside information have created a poor perception of PwC s financial rewards. 5. Millennials want it all... except partnership! Millennials want it all: fair pay, professional growth, interesting work and opportunities, a community at work, and a fulfilling personal life and they re keenly aware of their alternatives. Most staff perceive they have many attractive job alternatives. Only 31% of employees have aspirations to be a partner and 15% of Millennials consider their work to be repetitive and boring. The challenge is to keep people, especially high performers, engaged as long as possible. Key learning: We need to create an environment that offers a rewarding and enriching experience even if people never become partners. 6. Millennials want a sense of team and community. Mentors and supervisors are central to how employees experience work at PwC. Support from supervisors, team cohesion and appreciation go a long way with Millennials, creating a deeper emotional connection to the firm. Key learning: Creating a sense of community at work, which includes teamwork, appreciation, supervisory support and friendship, is of major importance to people. 7. Peaks in their workload lead to valleys in their job satisfaction. Working extremely long hours during their busiest time of year has a significant negative impact on people and top-rated performers are most likely to work those extreme hours. Across all performance levels, those working extremely high hours during their respective busiest times are more likely to leave the firm than others who work fewer hours during that same time. Key learning: Extreme busy peaks have a disproportionate and pervasive negative impact on peoples commitment to stay with the firm. 8. Controlling their destiny. Today s workforce is well connected to information. This unprecedented access helps people meet their various needs in all aspects of their lives and they expect the same kind of information and choice at work. Key learning: Transparency about and greater control over career opportunities is critical for future success. 9. Improve technology. Investing in technology to make work more efficient, productive and flexible is a significant need for PwC professionals. Key learning: It s not gadgets they want PwC employees want more efficient systems, which will enable them to maximize the value of both their time and their overall experience. 10. Millennials want global experience. Millennials are more eager and willing to take advantage of global mobility opportunities. Compared at the same stage in their career, 37% of Millennials vs. 28% of non-millennials would like the opportunity to go on a global assignment. Key learning: Global reach and mobility is a big reason why people join PwC and, if not realized, it may also be a big reason why they leave. PwC s NextGen: A global generational study

54 Our team Sponsor Dennis Finn, Global Human Capital Leader Project leaders Anne Donovan, US Transformation Pillar Leader Nora Wu, China Human Capital Leader Project manager Bianca Martorella, US Transformation Pillar University of Southern California (USC) Susan Mohrman, Ph.D., Senior Research Scientist, Center for Effective Organizations, Marshall School of Business, USC Alec Levenson, Ph.D., Senior Research Scientist, Center for Effective Organizations, Marshall School of Business, USC George Benson, Ph.D., Associate Professor of Management at University of Texas at Arlington, and affiliated researcher at Center for Effective Organizations, Marshall School of Business, USC Jennifer Deal, Ph.D., Senior Research Scientist, Center for Creative Leadership, and affiliated researcher at Center for Effective Organizations, Marshall School of Business, USC; author of Retiring the Generation Gap: How Employees Young and Old Can Find Common Ground Maritza Salazar, Ph.D., Assistant Professor, School of Behavioral & Organizational Sciences, Claremont Graduate University, and affiliated researcher at Center for Effective Organizations, Marshall School of Business, USC London Business School Lynda Gratton, Ph.D., Professor of Management Practice at London Business School and founder of the Hot Spots Movement ( 54 PwC s NextGen: A global generational study 2012

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56 2012 PwC. All rights reserved. PwC and PwC US refer to PricewaterhouseCoopers LLP, a Delaware limited liability partnership, which is a member firm of PricewaterhouseCoopers International Limited, each member firm of which is a separate legal entity. This document is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. MW