Who wants to work at a Fortune 500 company?

Apparently fewer than one in seven recent college graduates want to work at a big company, according to the Accenture Strategy 2016 US College Graduate Employment Study. This is a stark change from the many years when a large company corporate career track was the preferred way to work and prosper in America. The study found:

• Only 14% of the class of 2015 would “prefer” to work for a large corporation.
• 44% of new grads want to work either for medium-sized business or a small, entrepreneurial or start-up business.
• University grads are passionate, committed and willing to work hard – 69% cited picked their major in college because they were passionate about that area of study.
• But just 42% picked a major because it offered abundant job opportunities and only 23% indicated their choice was based on how much money they could make.
• Half of recent graduates surveyed feel they are underemployed.

Who is winning the battle for the top Millennial talent? 

LinkedIn just published a story “Behind the Top Attractors: How we discovered the world’s best hirers and keepers of talent.”

The story noted that Fortune 500 CEOs see lots of change on the horizon, and the ability to attract and retain top talent will be key to their future success. But the story missed a blinding glimpse of the obvious.

The experience for many Fortune 500 employees, especially the entry level millennial generation crowd, is not so great compared to what it used to be.
Are the Fortune 500 firms themselves are to blame for the talent flight to start-ups and smaller privately held firms?

Here’s what many of the big companies used to offer, but seem to have walked away from in name of cost-cutting and corporate efficiency. But it’s interesting to note that a number of the LinkedIn “top talent attractors” are bucking these trends and delivering what clearly matters to their employees:

Employee Training / Clear Career Development Paths:

The Accenture study analysis suggested that the next generation of workers are in fear being lost in the dense forest of a large corporation. They are concerned their individual needs and talents will be neither noticed nor nurtured.

Big corporations continue to cut back on formal training programs. The thought is “why bother training them… they are only going to leave” is often the excuse. Larger companies now emphasize on-the-job experience, coaching, collaboration and self-directed learning. In short it’s sink-or-swim for many employees, with no lifeguard on duty.

Current Best Practice: Microsoft offers a unique approach to career development: “an individual adventure” as they define it.

Its 118,000 employees are encouraged to plot their own path, working towards becoming a specialists or generalists. Career resources include 2,000 training programs.

Long-Term Wealth Building Opportunities:
Many emerging growth companies / start-ups are offering their employees stock options as way to be competitive with larger firms and help attract and retain the best and brightest people. In contrast most big corporations reserve stock options for only their senior people.

Nearly all big firms have eliminated their defined benefit (pension) plans and most have cut way back on their 401(k) matching contributions and employee stock purchase plans. Many Millennials think it doesn’t pay to hang around big companies waiting to get rich.

Current Best Practice: Last fall Apple launched an RSU Grant (Restricted Stock Units) Program making everyone who works at Apple eligible for the new program. Grants were given to employees worth $1000-$2000 in Apple stock. This is addition to the existing Apple Employee Purchase Stock Plan (ESPP) which makes Apple stock available to employees at a discount.

Willingness / Ability to Embrace Technology-Driven Innovation: 

Many Fortune 500 firms are on the back-end of the tech innovation curve. Who’s still buying all the blackberry phones and PCs these days? How many big firms have really cool smart-phone apps?

How many have created and tested highly disruptive business models? Have offered their rank-and-file management an opportunity to learn computer coding? Encouraged senior people to pair-up with junior digital natives as tech mentors?

Current Best Practice: Goldman Sachs gets kudos for being an old-line investment banking firm that is repositioning itself as a tech company, with about a quarter of its 36,500 employees being engineers and tech staffers. The company is actively investing in early-stage fintech companies and partnerships are more common than acquisitions. They've even sponsored hackathons.

Placing Value on Seasoned Employees: 

Seems that being over 50 and making more than $150K+ a year puts many large corporate employees on the “endangered species” list. Institutional knowledge is being shown the door every day in corporate America in the interest of cost-cutting.

“Cheap and Cheerful” employees seem to be the new order of the day. The younger employees often don’t even know what they don’t know, worse yet senior management often doesn’t seem to care. Customer satisfaction and loyalty can suffer in the end.

Current Best Practice:  Barclays Bank has launched an innovative apprenticeship program for professionals over 50 years of age. The banks views this as a way to up-skill the younger generation of their employees. The bank predicts “that bringing in apprentices over 50 years of age will make the institution more accessible, providing greater empathy with requirements of certain customers.” 

Attractive Corporate Cultures: 

The Accenture study shows that corporate culture matters to this new generation. 74% of recent college grads would choose to work at an organization with an engaging, positive social atmosphere, even if it meant accepting a lower salary. And a striking 92% of 2016 grads say it’s important to be employed at an organization that demonstrates social responsibility.

Current Best Practice:  Last year Google achieved the #1 ranking for corporate social responsibility from the Reputation Institute. What put Google on top?

The company has been carbon neutral since 2007 and has implemented numerous environmentally friendly initiatives, including Google Green.

The LinkedIn study was interesting because it was based entirely on actions of users – drawn from LinkedIn primary behavioral data. It leveraged actions such as job applications, engagement (non-employees viewing / connecting with current employees) and new hire staying power.

The companies at the top of the list are disruptors, tech savvy, innovative in creating new types of workplaces, provide professional growth opportunities, job flexibility and even stock option plans to large numbers of employees.

An even more interesting data point is the market cap and growth trajectory of the 40 companies on the LinkedIn “Top Attractors” list. If the charge of a public company is to maximize shareholder value, most of these companies are doing it in spades.

By delivering long-term profitable growth, the capital markets are rewarding them with higher equity valuations. And this all may be underpinned to a large degree by happy, hard-working, loyal and satisfied employees. Go figure.