Millennial Employees: How Much They Make, Where They Work, What They Do and What That Means for Your Business
Though millennials have only been the largest generational employee group since 2016, employers and HR professionals have spent years working to understand their workplace needs and what makes them want to join and stay with a company. Aside from examining their habits in the workplace, one way to better grasp what drives millennial employees is evaluating their hourly earnings and wage growth, not only across the board, but by region and industry for a narrower view.
A recent report by Paychex takes a deep dive into millennial wages, geographic distribution and industry preferences, analyzing their current status, growth rates and what this all means for businesses trying to attract, retain and grow talent in this increasingly important employee group. The report found that, among small businesses nationally, the millennial full-time employee population is comprised of 54.7 percent males and 45.3 percent females; and millennials make, on average, $21.80 hour ($5.79/hour less than the all-generation average), but millennial wages are growing at a rate nearly double that of all generations (5.8 percent compared to 3.0 percent, respectively).
Depending on the location and nature of your business, millennial employee population, wages and wage growth can differ. The West, for example, has the highest percentage of millennial employees among regions overall at 40.2 percent and the highest percentage of millennial female employees (41.5 percent), while the Midwest has the lowest percentage of millennial employees (36.0 percent) and is the only region where the percentage of millennial male employees is higher than that of Millennial female employees.
When it comes to industries, leisure and hospitality has the highest percentage of millennial employees among industries (49.9 percent), but also the lowest millennial wages at $15.51/hour. On the bright side, that's only $2.28 less than the all-generation average of $17.79/hour as minimum wage increases are likely impacting the pay scale. Millennials in professional and business services earn the most among industries at $26.05/hour, but have the lowest growth rate at 5.3 percent.
Overall, the gender gap is narrower among millennials than employees of all generations (a $2.59/hour difference compared to $6.64/hour, respectively), but the gap could widen again as millennial male employees have an annual wage growth rate of 6.2 percent compared to the millennial female growth rate at 5.3 percent. Again, this differs depending on where millennials work and what they do. Regionally, the Midwest and South have the largest gender pay gaps among millennials, 84 cents and 87 cents on the dollar, respectively; and though each industry's millennial gender pay gap is smaller than the all-generation gaps, in no industry do female millennials outpace males in wage growth.
Knowing these facts gives you a baseline understanding of millennials' current employment situation overall, as well as in your unique region and industry, but once you start the recruitment process, there are a few additional factors to consider.
First, be proactive and effective in your recruitment effort. Millennials don't like to drag out their job decisions. As with any candidate you're interviewing, really listen to what the millennial applicant is looking for in a workplace. While you don't need to change your entire business model to adapt to millennial employees, there are perks -- flexible work hours, work from home/telecommuting options, casual dress days, etc. -- that can make the difference to millennial employees in choosing and remaining content and engaged at a company.
Once the employee is hired, offer meaningful work opportunities and foster connections. Millennials seek to be effective and impactful in their roles. As the job allows, let them work on projects that they are passionate about that also impact results and provide them with opportunities for development, whether a special project, exposure to other departments, or classes/training outside of the workplace. Be sure to ask millennial employees early on about their career aspirations, develop a plan to help them get there and regularly monitor progress toward those milestones.
There is no one-size-fits-all approach to recruiting and retaining employees of a generation, but it is important to understand, in general, how they fit into the workforce now and in the future.