Chapter 4
Maximizing Human Potential Accelerates Performance
Closing gaps in employees’ workplace experience accelerates business performance in terms of higher revenue, better stock performance, and improved retention.
As outlined in the previous chapters, in the emerging economy companies are under pressure to bring out the best in all their employees in order to survive and thrive. Everyone counts in a business climate defined by heightened expectations on the part of employees and customers, radical transparency, rapid change, and decentralized decision making.
To realize the full potential of all employees requires that all employees have a great experience at work—no matter who they are or what they do for the organization. This way, all people show up to work inspired, ready to collaborate, ready to adapt and learn, willing to put themselves on the line for the organization and its mission to advance.
In short, organizations face a business imperative to create a consistently great place to work. Unfortunately, most companies today fall short of this goal. Even at the best workplaces, there are gaps in the workplace experience.62 By “gaps,” we mean that some workers have a less positive experience at work than others, based on who they are or what they do for the company.
Close the Gaps, Accelerate Performance
In this chapter, we’ll take a look at the workplace gaps facing particular demographic groups—executives and non-executives; women and men; baby boomers and millennials; whites and minorities—and the economic impact of failing to foster the full potential of the people in those categories. Some of the places where companies are falling short as a result of these gaps are in stock market performance, employee retention, productivity, and brand ambassadorship. In other words, where gaps exist, money is being left on the table.
Traditionally, the idea of widening the lens to include all employees’ human potential hasn’t been taken very seriously by business leaders. Instead, a big focus has been placed on identifying and grooming “high-potential” employees only. To be sure, different employees contribute different amounts of value to a company’s success. But in the kind of economy that is emerging, optimal performance requires every person in the organization to plug in with energy, ideas, and a solid understanding of the company’s goals. Think of the Hyatt room service worker who became the highlight of a couple’s trip by listening, engaging, and sharing his singing talents each night.
That employee took his game to the next level, bolstering Hyatt’s business in the form of great customer service along the way. And he could do so only because Hyatt has done so much to close the gap between executives and rank-and-file workers. It has given them real authority to make judgment calls that drive outstanding customer service, it has invited them to bring their full selves to work, and it has created a culture of recognizing great performance.
That’s what Great Places to Work For All do on a grand scale when they close the gaps—when they maximize human potential. When great workplaces reach everybody, everybody reaches higher. Going back to the Golden State Warriors, look at coaching assistant Nick U’Ren. The crucial suggestion by the then-28-year-old to start Andre Iguodala in the 2015 finals wasn’t a mere whim. U’Ren first expressed the notion over a team dinner, but it got a lukewarm reception. So he did more research, studying films of the previous year’s finals series involving LeBron James. He saw a similar strategy succeed, convinced assistant coach Luke Walton to back the switch to Iguodala, and then U’Ren and Walton sent a text with the idea to head coach Steve Kerr at 3 a.m.63
In other words, U’Ren went above and beyond the call of duty, and raised his own game. And that performance cannot be isolated from the Warriors’ culture of respect, where, as Kerr put it, “We have a staff that is very cooperative. Whoever has the idea, it doesn’t matter.”
These sorts of anecdotes are backed by a growing mound of evidence showing that equitable environments that maximize human potential score big. A 2015 study by research firm Bersin by Deloitte found that companies that focus on leadership and inclusion in their talent strategies outperform peers on a variety of business measures, including:
2.3 times higher cash flow per employee over a three-year period
1.8 times more likely to be change-ready
1.7 times more likely to be innovation leaders in their market64
Our own research comes to similar conclusions. For example, we found Great Places to Work For All outperformed the S&P 500 in the stock market—considerably.
We studied the stock performance of publicly traded companies that participated in the 2017 FORTUNE 100 Best competition, applying the new Great Place to Work For All Score methodology. As mentioned in Chapter 1, the For All Score moves beyond the average level of trust in the company. It is a composite measure of how positively and consistently employees rate their workplace on metrics related to innovation, leadership effectiveness, and trust, regardless of who they are and what they do within their organization.
We then created a mock stock portfolio of the publicly traded companies that ranked in the top 100 For All organizations according to the new methodology (referred to here as the For All 100) and assessed their performance against the S&P 500 Index. Over the past three and five years, the publicly traded For All 100 significantly outpaced the S&P 500 (see Figure 12).
The average annual return for the publicly traded For All 100 over the past three years was 51.4 percent—nearly 50 percent better than the S&P 500 performance over the same period.
The publicly traded For All 100 did even better against the S&P 500 over the past five years. With a mean annual return of 146.4 percent, the publicly traded For All 100 performed 62 percent better than the S&P 500.
Figure 12
Great Places to Work For All Beat the S&P 500
As we mentioned in Chapter 1, For All companies also race ahead on revenue. Businesses in the top quartile on For All metrics enjoy more than three times the revenue growth of companies in the bottom quartile. And we have seen that Great Places to Work For All grow faster than companies that simply show high levels of trust on average.
Our latest research reaffirms that a high level of trust overall fuels growth, but it also shows a For All workplace accelerates that growth.
Different Groups of Employees Have Different Gaps to Close
These broader findings illustrate that it’s clearly in an organization’s best interest that everyone in the organization is having an optimal experience. Where there are gaps, there are places where human potential is leaking out of the company, diminishing the strength of the organization.
We set out to find where gaps exist between different groups of employees, so that leaders know where to start focusing their energy to close these gaps. We did this by looking at the survey results from a pool of Great Place to Work–Certified companies, in which more than 225,000 employees were surveyed.
We should note that these companies are among the best workplaces in the United States. At Great Place to Work–Certified workplaces, at least 7 of 10 employees at the company say their company is a great place to work. All of these companies have relatively high levels of trust, pride, and camaraderie overall. But a deeper look at the data shows that even at these organizations the work experience isn’t always consistent—and that gaps in experience often aligned to an employee’s personal characteristics or job role.
Most striking were the significant gaps that emerged in specific areas across the four major categories noted earlier: gender, generational cohorts, racial/ethnic groups, and job level. Interestingly, the gaps varied in nature based on demographic category. For example, on average, even among these great workplaces, women do not have a say at work to the extent men do. Minority employees don’t experience the same level of community at work as their white counterparts. Older workers are not having as much fun at work or being included in decisions to the extent younger workers are. Frontline employees are not as valued, nor do they feel that their work has meaning as often as leaders do.
If we extrapolate these results across the broader U.S. and world, those gaps amount to wasted human potential for millions of people, and to unrealized revenue in thousands of organizations. In fact, of all the elements of a Great Place to Work For All, the human potential piece is the most pivotal—the area where companies can most improve their performance. This isn’t mere rhetoric or speculation. We have begun to collect data that quantifies these workplace experience gaps and just how much companies stand to gain by closing them. Here is what we are learning.
Leaders Versus Individual Contributors: It’s Good to Be Queen
Of all the workplace gaps we found, the largest are between employees across different job levels. Put simply, the higher you go in the organization, the better the work experience tends to be.
This makes sense on an intuitive level. After all, executives call the shots and make the most money. But the natural outcomes of being an executive, which include greater influence and decision-making power as well as a heftier paycheck, have broader implications on all employees’ experience at a great workplace: things like feeling they make a difference at work, feeling valued, and believing the workplace is fair. Executives’ ability to effectively manage the realities of their position of power becomes critical to closing the gaps and creating a great workplace for all employees.
These findings also illustrate the blind spot many executives have about what’s really going on in their companies. Our survey is not just about employees’ own experiences—it also assesses what they think happens in the company at large. For example, 81 percent of executives (versus 64 percent of individual contributors) reported they believe they personally receive their fair share of the company’s profit. These numbers are simply a collective report of each employee’s own experience. However, when we asked respondents whether “people here are paid fairly for the work they do,” this goes beyond the individual employee’s own experience and asks them to reflect on the company’s practices at large, for everyone. For this statement, we uncovered a blind spot for executives. While 85 percent of executives believed people at their company were paid fairly for their work, this number dropped 15 points to 70 percent among individual contributors.
This data suggests executives need to listen more closely to people at all levels of the company because they are not always aware of potential issues in the organization—including experiences that influence productivity, engagement, and innovation.
Key Gaps Between Job Levels: Fairness, Communication, and Meaningful Work
Between each of the job levels—executives (including executive and C-level leaders), managers (including middle managers, frontline managers, and supervisors), and individual contributors—our data revealed that fairness was the most prominent gap. This includes perceptions of fair pay and profit sharing, fairness in promotions, perceptions of favoritism, access to a fair appeals process, and more.
Another consistent gap that emerged is around employees feeling they are included in decisions that affect them. Individual contributors and managers alike are far less likely than executives to believe that they are involved in decisions that affect their job or work environment, or that managers genuinely seek and respond to their suggestions and ideas.
We also found a telling gap between executives and mid-level managers specifically. Mid-level managers are far less likely than executives to believe that leaders make expectations clear, keep people informed about important issues and changes, or do a good job assigning and coordinating resources.
Taken together, these gaps in communication and decision making are bad news for an organization. When middle managers, who serve as the critical linchpin between executives and individual contributors, are not well informed, they cannot effectively connect employees to the broader rationale that drives decisions, or to the company’s overall goals and strategy. When employees across the board feel that leaders do not actively seek their input or ideas, especially on decisions that affect them directly, they are more likely to feel that decisions are happening “to” them, rather than something they had the opportunity to be a part of. Employees may also have valuable frontline information that would help leaders understand how a change would affect the company’s operations or customers. Instead, employees are often left in the dark, unable to effectively support the company’s goals.
To be sure, leaders can’t include all employees in every decision or keep them updated on every change at every moment. However, these gaps are important to mitigate. It’s far more difficult to speed forward if employees put up blocks to decisions that catch them off guard or if they don’t have enough information to do their jobs. Also, when leaders take the time to build trust by including employees, those workers are more likely to give leaders the benefit of the doubt when they do lack information, and assume good intentions.
For individual contributors, specifically, some other key gaps emerged as well. Among them were lower results for feeling their work has special meaning, feeling that management shows a sincere interest in them as people, not just employees, and having equal access to opportunities for recognition. If we combine these gaps with the ones noted above regarding unfair perceptions of pay, profit sharing, and promotions, as well as being excluded from decision making and idea sharing, this amounts to a far less rewarding experience for employees who are not in management or leadership roles—one that may leave them feeling like a replaceable “cog in the wheel” rather than a valued member of the team.
Again, these gaps have damaging implications for the business. For example, our research shows among millennial individual contributors specifically, those who report that their managers show a sincere interest in them as people are eight times more likely to demonstrate qualities related to change readiness, agility, and innovation.
The Value of Closing Job-Level Gaps
Some might argue that these gaps are inevitable, the natural order of things. And perhaps it is impossible to completely eliminate workplace differences between the top decision makers of an organization and others working there. But our data shows that some companies are much better at creating a consistent experience whether one works in a 70th floor C-suite penthouse, a 20th floor cubicle, or a basement boiler room. And those companies are outperforming their peers.
Figure 13
Close the Gap between Leaders and Employees, See Revenue Soar
Figure 13 shows the revenue growth among companies with large versus small gaps between leaders (which includes executives and managers at all levels) and individual contributors. These results are drawn from a study of several hundred Great Place to Work–Certified companies of different sizes, industries, and geographies.
The first data set represents the 100 companies from the group with the largest gaps on our Trust Index Survey between leaders’ scores and individual contributors’ scores. The second set is the 100 companies with the smallest gaps.
As Figure 13 shows, companies with the narrowest gap between leaders and non-leaders had an annual revenue growth rate nearly three times that of the companies with the widest chasm in experience between the two groups.
Figure 14
Retention, Brand Ambassadorship, and Productivity Increase as Leader–Employee Gap Shrinks
Accelerated revenue growth isn’t the only benefit of a more equal experience among employees of different job levels. We also found higher productivity, brand ambassadorship, and intent to stay at the companies that best close the gap between the top and bottom of the organization. For example, as seen in Figure 14, at the 100 companies with the smallest gaps between leaders and individual contributors, nearly 94 percent of the workforce reports that people are willing to give extra to get the job done. That compares to 81 percent at the companies with the biggest divides between the top and bottom layers of the company. And nearly 96 percent of employees at companies with the smallest management–individual contributor gaps are proud to tell others they work at their organization, up from 89 percent at companies with the largest gaps.
While the numbers may appear strong overall, it is still a gap, and those 7 percentage points in brand ambassadorship amount to an unnecessary organizational leak—one that only becomes exacerbated in an era of employees living out their lives on social media. Performance suffers when a less-than-optimal portion of your employees speak proudly about your brand. Combine that missed opportunity with higher-than-necessary turnover and fewer staff members giving their all, and the impact of this leak becomes evident. The organizations with the narrower gaps between leaders and rank-and-file employees are zipping ahead. These findings dovetail with other research on workplace experience and business results. Among the results our Trust Index captures is “employee engagement”—typically defined as an employee’s desire to stay at their organization and their willingness to give extra on the job. Other studies have found engagement levels increase as an employee’s job level increases, that engagement for most employees is low, and that increased engagement improves a variety of business outcomes.65 Our conclusions about increased equality boosting business results are echoed in growing amounts of research at the societal level. As we’ll discuss more in Chapter 6, evidence suggests that inequality hurts economic growth for countries overall.66 The takeaway is clear: treating a great work experience as a perk or privilege of more senior roles is risky business. Create a more equitable experience at work among leaders and individual contributors and see your performance take off.
Men and Women: It’s Good to Be Queen—and Better to Be King
If you have a daughter, pay special attention to this section. Because the truth is, while it’s good to be queen, our data shows it’s still far better to be king. And unless leaders around the world make it a priority for women to have a more equitable experience at work, there isn’t much hope for the girls of today when they enter the workplace of tomorrow.
Pay inequities between genders have dominated the headlines for the past few years, and for good reason: it’s common knowledge that women make 80 cents for every dollar made by men.67 However, our research uncovered that the gender pay gap is just the tip of the iceberg.
Key Gaps in Access to Leadership, Being Treated as Valuable Contributors, and Fairness
On average, women and men in fairly equal numbers report an overall positive experience of the workplace across the companies we looked at. However, when we dug more deeply into the results, we found significant gaps in key areas. For starters, men are more likely than women to report more open lines of communication to managers and leaders. This includes being able to ask managers a reasonable question and getting a straight answer, being involved in decisions, and an overall sense that leaders are approachable.
Our findings dovetail with recent research on issues of gender, authority, and communication in organizations. Facebook executive Sheryl Sandberg and author Adam Grant synthesized some of this scholarship in a series of New York Times essays. Sandberg and Grant noted that women in organizations not only can find themselves interrupted when they speak up, but often are judged as overly aggressive for making their voice heard. “Women who worry that talking ‘too much’ will cause them to be disliked are not paranoid,” Sandberg and Grant wrote. “They are often right.”68
Men were also far more likely than women to be acknowledged and rewarded for their work—and not just when it comes to a fair paycheck. We found big gaps between men and women on their perceptions of fair pay, fair promotions, and equal opportunities for recognition.
Finally, women were more likely to experience a biased and unfair workplace in general. Not only are they more likely to perceive favoritism and unfair treatment based on gender, but they also report less access to a fair appeals process. Employees from several Great Place to Work–Certified companies have shared comments with us that capture the way sexism can exist even in an otherwise great workplace:
“Many senior-level roles are occupied by men who appear to come from similar backgrounds, and their ‘deputies’ historically have been women. Men also in meetings are often the ones who are given the floor to explain a ‘vision’ or overall strategy rather than an operational or tactical element.”
“I feel that women are treated differently in leadership. Even interns that visit have noticed this. Men talk over women, they seem to be able to say and do whatever they want without repercussion...essentially the good old boys club. It’s tough to be a female leader around here.”
“Looking at our Sr. Leadership, there are women. However, the string of degrees behind their name suggests that they have had to work twice as hard to prove themselves. Very few of the men possess this level of education.”
Figure 15
The Gender Gap Widens at the Top
These employee comments speak to a striking finding we recently made about women and men as they progress up the corporate ladder: the workplace gender gap is greatest at the top. There is a difference in overall experience between male and female employees at every level of the organization, and both men and women have an increasingly positive experience at higher levels of management. But the gap between the sexes is largest among executives and the C-suite, according to our research in preparing the 2017 Best Workplaces for Women ranking (see Figure 15).
Something appears to change in that most rarified air in organizations, such that female executives have a significantly different experience than their male peers in corner offices.
This particular finding dovetails with a recent New York Times article by Susan Chira about challenges women face in reaching the very pinnacle of organizations. The lack of CEO women isn’t about “the pipeline” of talent but about “loneliness, competition and deeply rooted barriers,” according to the story.69
These experiences find support in our Best Workplaces for Women research. We discovered that the gap in perceptions of favoritism between men and women was largest at the executive level. So was the gap on perceptions of a psychologically healthy climate. While 80 percent of female executives called their workplace psychologically and emotionally healthy, 87 percent of men did.
The upshot of this gap is that organizations are squandering potential in their executive ranks. That’s in part by diminishing the experience of women executives, but also by deterring more women from getting to the CEO role itself. Research indicates that women-led organizations outperform peers.70 But many companies, through less than fully fair or welcoming climates for women in the C-suite, are blocking the benefits of female leadership.
Work–Life Balance: Not a “Women’s Issue”
Another interesting finding in our research was a gap that did not emerge between men and women: work–life balance. While work–life balance was important to women, it was just as important to men. This wasn’t surprising to us, because we found the same thing in researching and ranking the 2016 100 Best Workplaces for Women.
But corporate America and the general public still define workplace flexibility and balance as something for female employees—especially for working mothers. By making work–life balance a women’s issue, the damage is twofold: it crowds out other matters where real disparities exist between genders, and it neglects the fact that work–life balance is a real concern for men as well.
The Value of Closing Gender Gaps
As we saw with job levels, there is also value in closing the gender gaps. Overall, when the gaps between the genders shrink, we see an uptick in productivity, brand ambassadorship, and retention, which makes sense. If women make up half of a company’s workforce, of course a company will perform better when half of employees have better access to information, are able to contribute their best ideas, and feel equally valued for their contributions.
On the issue of retention specifically, we have found women are three times more likely to want to stay with the company if management involves them in decisions that affect their jobs, and if they can ask management questions and get straight answers. They are also four times more likely to want to stay if they believe management is approachable and easy to talk with.
On the issue of fair pay, we can look to Salesforce for a case study on how closing gender gaps pays off. As mentioned in Chapter 1, Salesforce CEO Marc Benioff and his team invested $3 million in 2015 to address a gender pay gap. This action, in conjunction with other efforts to make all employees feel fully valued and included, has had striking results.
In 2014, 84 percent of women at Salesforce felt pay was fair at the company, compared to 91 percent of men. By 2016, the share of women experiencing fair pay had climbed to 90 percent.
The focus on leveling up women didn’t make men feel overlooked—91 percent of men at the company continued to believe people get paid fairly.
For both genders, levels of pride and brand ambassadorship climbed slightly such that 97 percent of both men and women now feel proud to tell others they work at Salesforce.
The percentage of women employees who say they want to work at Salesforce for a long time has jumped from 85 percent in 2014 to 93 percent.
Salesforce continues to work on the issue. In 2017, the company conducted another, wider assessment on pay equality, evaluating salaries and bonuses globally. It also looked at differences in pay for not only gender but also race and ethnicity in the United States. Eleven percent of employees received adjustments following the company’s second assessment, and Salesforce spent approximately $3 million more to address any unexplained differences in pay.
“The need for another adjustment underscores the nature of pay equity—it is a moving target, especially for growing companies in competitive industries,” Cindy Robbins, Salesforce’s executive vice president for employee success, wrote in a blog about the 2017 effort. “It must be consistently monitored and addressed. Salesforce will continue to focus on equality, diversity and inclusion at all levels, and we plan to review employee compensation on an ongoing basis.”71
This commitment to paying people fairly has gone hand in hand with strong business results at Salesforce. The company has been growing faster than its rivals and at the time of this writing dominated the customer relationship management arena with nearly twice the market share of its nearest competitor.72
Racial/Ethnic Minorities Compared with White Employees
The area of diversity and inclusion (D&I) has emerged as one of the hottest topics in the business world in the past few years. The D&I field refers, in large part, to fair treatment of racial and ethnic minorities in organizations. Heightened attention to racial equality in the work world may have something to do with the growing body of research on the business advantages of diversity. It may also stem from our polarized national climate, where racial extremists have grown bolder and sparked a reaction from leaders in many social sectors, including business.
In any event, much of the attention to organizational diversity has remained focused on the representation of different ethnicities. Our research suggests the conversation must go deeper. We have found that it is not enough to look at statistics on how many black, Latino, Asian American, and other people of color a company may have. It’s vital also to explore the kind of experience those employees are having, relative to white employees. The experiential data will uncover the root causes of workplace gaps and enable practical decisions for creating a more consistent experience. Doing so contributes to an equitable society and is smart business strategy: when organizations close the gaps between racial groups, performance improves.
Key Gaps in Fairness, Responsibility Level, and Being a Part of a Caring Community
On the whole, the employees in our study who identified as a racial or ethnic minority have a less positive experience than their white counterparts in key areas of fairness such as promotions, fair pay, and fair treatment regardless of race, whereas whites were far less likely than minorities to perceive racism at work. We also discovered additional areas where minorities did not enjoy as positive a workplace as whites. In particular, one of the largest gaps between the racial groups had to do with whether employees felt that people in the organization care about each other, with minorities being significantly less likely than whites to feel they’re part of a caring community. This disparity was echoed by two other key differences: people feeling welcome when they switch job units, and management hiring people who fit in well. The picture that emerges is one where fewer minorities feel a strong sense of community at work as compared to their white colleagues.
What’s interesting about this finding is that the Great Place to Work–Certified companies in the study are defined, in part, by their caring communities. It may come as a surprise to leaders of these firms to learn that some colleagues are not having that same experience, based on their race. The caring community that the dominant white group believes everyone feels part of actually doesn’t feel that way for everyone.
Another striking gap is that minorities are less likely than whites to believe they are given a lot of responsibility (84 percent of minorities versus 90 percent of whites).
Collectively, these gaps along racial lines suggest that, as with women, minority groups can feel like second-class citizens in the workplace. They experience less fair treatment, are given fewer opportunities to demonstrate their value, and are not as welcomed into a caring community of colleagues. And while these are the primary gaps that we found, it should be noted that whites had a more positive experience than minority employees across 56 of the 58 statements on our Trust Index Survey—with the remaining two statements at a veritable tie between the groups. It’s apparent, in other words, that even at the Best Workplaces, people of color have a consistently less positive experience across the board.
The Value of Closing Racial Gaps
So other than the obvious moral reasons for doing so, why should a company try to close these racial gaps?
For one thing, a portion of your workforce feeling less care than others crimps growth. Some readers may doubt that the “soft” issue of caring at work could have hard-edged business implications. But we have found that employees experiencing a caring community at work is one of the top drivers of revenue outperformance for small and medium companies. In particular, when employees in a high-trust culture experience a caring workplace, they are 44 percent more likely to work for a company with above-average revenue growth.73
Likewise, the racial gaps in fairness and levels of responsibility are red flags for business results. Employees are less likely to be fully engaged or productive if they perceive an unequal playing field, one where they are less welcome to play an important role.
Figure 16
Close Racial Gaps, Grow Revenue
The numbers bear out this analysis. In our examination of Great Place to Work–Certified companies, we found the 100 companies with the largest gaps between the experiences of white employees and minorities had significantly lower revenue growth than the 100 companies with the smallest gaps. As Figure 16 shows, the companies with the largest gaps had 8.6 percent revenue growth, while the top quartile had 11.1 percent growth. In other words, the companies with the most consistently positive experience between minority and white employees posted revenue growth nearly one-third greater over the same period.
Figure 17
Retention, Brand Ambassadorship, and Productivity Increase as Racial Gaps Shrink
And it doesn’t end there. We also found employees’ productivity, brand ambassadorship, and intent to stay also rise when racial gaps narrow (see Figure 17).
As mentioned earlier in the book, many previous studies have shown that demographically diverse teams improve business performance.74 But our research here on revenue, productivity, brand ambassadorship, and intent to stay goes a step further. It indicates that the relative experience of racial and ethnic minorities—not just their mere presence—affects results. It matters how good people of color have it at work, as compared to white employees. When a positive experience is shared equitably across racial lines, the company as a whole benefits.
This isn’t the first time we’ve seen as much in our data. In 2016, we found the most inclusive workplaces enjoyed annual revenue gains 24 percent higher than peers.75 And, as mentioned in Chapter 1, employees’ experience of genuine workplace inclusion—as seen by high, consistent survey scores in areas such as fair treatment and a caring environment—was a better predictor of revenue growth than headcount diversity alone.
Organizations get the full benefits of a diverse workforce not just by creating a more diverse workforce, but by creating a great workplace experience for people of all colors.
The Generation Gap: Multiple Generations Can Make One Great Business
Much gets made of the differences between the generations at work. But a surprising finding from a study of the 100 Best contestants is that the three major generations—baby boomers (employees born between 1946 and 1964), Gen Xers (1965 to 1980), and millennials (1981 onward)—reported roughly the same overall experience of most of the key elements that make up a great workplace. Eighty-seven percent of employees from each group reported their company was a great place to work often or almost all of the time. This is a testament to the ability of great workplaces to create a measure of consistency across age groups—despite the fact that employees are coming to the table from inherently different places, given their broader life stage. It also speaks to the way a foundation of trust, along with camaraderie and pride, produces a great work experience no matter one’s age.
That said, we did find several notable differences between the groups that are worth mentioning.
Key Generation Gaps: Purpose and Pride
The biggest gaps, not surprisingly, were between baby boomers and millennials. Yet one of the gaps that may come as a surprise—given the attention millennials receive for craving meaningful work—was that boomers are actually more likely to feel a sense of purpose and pride in their work than their younger counterparts. More specifically, boomers are more likely than millennials to report that their work has special meaning, that they make a difference at work, and that they feel good about the ways they contribute to the community.
This “purpose gap” may have something to do with heightened expectations of millennials around meaning on the job. While all people want and need a sense of purpose at work, millennials have been noted as being more willing than their boomer counterparts to prioritize purpose over things like job security or a pay raise.76 It also may be the case that organizations aren’t doing as good a job explaining their mission and values to younger workers, and how the work of those younger employees connects to the organization’s higher goals.
Whatever the exact cause, other research we’ve conducted suggests the purpose deficit relates to millennials’ greater retention risk. Purpose, we have discovered, is a key component of employee retention.77
We also found areas where millennials are more likely to have a better experience at work than boomers. Millennials sense to a greater degree that promotions are fair, politicking is off-limits, and people are treated fairly regardless of their age. They are also more likely to experience a fun, family atmosphere and to believe they are included in decisions.
These findings are notable. As companies strive to create hip cultures that cater to the younger cohort, it’s important not to inadvertently shun or exclude older employees and the value they bring. As one employee from a recognized great workplace shares: “Respect your employees regardless of their age. Long-time working employees are a great asset and their experience should be well respected.”
The largest difference between boomers and millennials, and one that represents potentially the largest financial risk for organizations, is their intent to stay at the organization for the long haul. While 89 percent of boomers say they plan to work at their company “for a long time,” just 79 percent of millennials we surveyed said the same. And according to our Best Workplaces for Millennials list, twice as many millennial leaders as boomer leaders are flight risks. This isn’t entirely surprising, given their life stage; after all, millennials are less likely to be tied to employer-provided health insurance or the financial obligations of home ownership, for example.
However, millennials who say that their company is a great place to work are 20 times more likely to say they’d like to stay with the company for a long time, as compared to millennial employees who do not experience a great workplace.
In other words, if you want to improve retention among millennial employees, give them a great workplace.
Closing the Generation Gap
As mentioned above, we don’t see a significant difference regarding the overall level of trust that the three major generations experience at Great Place to Work–Certified companies. But in a number of key areas, there are gaps, and they are a drag on company performance. The biggest leak may relate to turnover among millennials. Roughly one in five millennials changed jobs within the last year, more than three times the number of non-millennials. The cost of millennial turnover due to low engagement is estimated to be $30.5 billion annually.78
Our research has found key drivers of millennial retention are areas where younger employees have a worse experience than their baby boomer peers: purpose, meaning, and pride. In particular, millennials are 12 times more likely to want to stay at their employer for a long time if they feel they make a difference at work, feel their job has special meaning, and feel good about the ways the organization contributes to the community. When millennial employees are proud to tell others about their company, they are 19 times more likely to plan a long-term future with the organization. Close the purpose–pride generation gap, and see millennials propel your organization forward.
Creating a great workplace for millennials is a pressing matter when it comes to leadership levels in particular. As we mentioned in Chapter 2, millennials’ overall experience declines as they move into senior leadership ranks. This represents a risk for the future of many companies. Young executives, who’ve received expensive training and developed significant institutional knowledge, could well leave for greener pastures if a promotion amounts to a decline in their quality of life. The good news, though, is that companies can keep millennials if they provide a great, high-trust culture. The key is to ensure millennials’ experience stays positive as they rise to the highest leadership levels.
Going in the other generational direction, there’s a key gap that bodes poorly for businesses. As noted above, baby boomers have lower perceptions that managers involve people in decisions that affect them, and that leaders genuinely seek and respond to suggestions. But these employees are more likely to bring a vast reservoir of life experience and career knowledge to the table that should not be ignored. Decentralized decision making and a climate that encourages idea sharing are vital to the kind of involve-everyone agility needed to thrive in business today. If older employees experience more of a command-and-control culture, they will not bring forth their best ideas. That reticence results in a leak—a leak companies will want to fix to maximize their growth and potential.
A Better Experience for All Is a Worthy Goal
Enabling everyone, no matter who they are or what they do, to have as great an experience as those most benefitting from work today is a worthy, moral, humanistic goal—one we’ll talk more about in Chapters 5 and 6. But as we’ve seen, there’s also hard business logic for shrinking the differences among groups in the workplace.
It’s also important to note that other demographic groups besides the ones addressed here should not be neglected. Groups like remote workers, LGBTQ employees, former veterans, even introverts. It’s vital not to lose sight of the fact that everyone is their own unique individual, despite being a part of a broader demographic group.
The bottom line is this: any person left behind in a company culture is bad for business. Each person, and their potential, matters. You will build the most hopeful future for your organization by including everyone.