Over the past few years I’ve spent a lot of time reviewing research that is focused on millennials. In particular I’ve looked at research that has been focused on millennials and money as well as millennials and careers.
What I want to argue today is this: when it comes to a career and a job, ultimately what millennials want is more money.
Typically what I’ve heard people argue is that millennials care more about their work environment, work-life balance, and engagement with their job than they do about their compensation.
While I’m not denying that millennials care about lifestyle factors like these, I think that the studies support a very simple fact: at the end of the day millennials want more money.
One of my favorite quotes from a recent #AskGaryVee YouTube show is “my generation – I’m 40 – for the first 10 years of your business career you made sh*t.”
The reality is that most millennials don’t see the need to grind out a decade of “paying dues” before they can take home a reasonable income. With technology today it’s easier than ever to see what skills are in-demand as well as develop and improve those skills. In many cases millennials are the ones with the in-demand skills, such as programming.
Millennials want to increase their income, and they want to do it as quickly as possible. If another company is going to give them a 25% raise to come over, they are going to take it. With tools like glassdoor it’s easier than ever to see which companies pay more – or less – for a given job.
Let’s start by looking at something that shouldn’t be a surprise to anyone who has followed student loan and other recent financial trends: millennials are stressed out about money.
Financial Stress is Real for Millennials
According to PwC’s 2016 Employee Financial Wellness Survey, 64% of millennials said they are stressed about their finances. That’s two out of three millennials. Two out of three!
Even more troubling is that 37% of millennials said that issues with personal finances have been a distraction at work.
Another PwC study, Millennials & Financial Literacy—The Struggle with Personal Finance, found that 54% of millennials are concerned about their ability to repay their student loan debt. Even more alarming is that 34% of millennials with household income above $75,000 are concerned they may not be able to repay their student loans.
I personally don’t think the impact of student loans has been stressed enough. Student loan debt has increased from $0.4 trillion a decade ago to approximately $1.4 trillion today. It’s more than tripled. And who is on the hook for most of those loans? Millennials.
If you put yourself in the shoes of someone who has student loans and various financial obligations and combine that with the fact that they are making entry-level pay, is it any surprise that a focus of millennials is their compensation?
Why Millennials Job Hop
The traditional but increasingly abandoned view is that if you put in your time at an employer and are loyal to them, you will set yourself up nicely to move up the ladder. There are no guarantees in business, and sacrificing an increase in pay may actually hurt career prospects down the road.
What if you were one of the 1,000+ employees who got laid off from Target when they divested their Canada division? It would have been better to look elsewhere while still employed as they would have more leverage to negotiate higher pay with a potential employer.
Let’s look at what research has shown. A recent Staples Business Advantage Survey found that 52% of millennials who changed jobs in the last 12 months have done so for a salary increase. Additionally, 68% of millennials believed an increase in pay would improve workplace happiness.
Based on all the evidence that millennials are stressed out over finances, it’s not surprising that having a higher income is a priority for them and something that they think will improve overall happiness.
Millennials Want It All: Higher Pay AND Control Over their Work
One emerging trend I’ve noticed is the belief that flexible work schedules and arrangements should go hand-in-hand with lower pay than traditional work arrangements.
I think this either-or belief is going to be shattered over time. First, it’s rooted in employer’s desire to have a happy work force while also paying that work force as little as possible. If employers can package flexible work schedules as something that necessarily comes with lower compensation, they can win big.
Second, the belief that accepting less pay for a higher quality of life is an acceptable proposition flies in the face of the many “workforce health” initiatives that are becoming popular at many employers. If by working from home you get more sleep, experience less stress, and still do as good (or better) of a job, why should workers be paid less who pursue this option?’
Finally, with the emergence of the “gig” economy there are many job functions that are being shifted towards a contractor basis, much more than in decades past. At no other time in history has it been easier to start a business, create a website, and gain clients. And you better believe that contractors will structure their day and lifestyle on their terms.
Technology, specifically through websites like glassdoor, has already made it possible to view salary data from nearly every mid- to large employer in the United States, putting leverage in an employee’s hands. It’s becoming more and more difficult for employers to “trick” employees into less compensation.
Millennials will continue to reject the paradigm that you need to accept lower pay for a better work-life balance and setup.
Money = Freedom
I’m sure we’ve all heard the phrase mo money mo problems, but is it true?
Some people look down on being overly focused on increasing income, but on Young Adult Money it’s our primary focus. And I think that’s a good thing.
The main reason I think it’s great to focus on increasing income is because it can have a huge impact on your freedom. The more money you have the more options are available to you.
Imagine someone with a million dollars in the bank. Now imagine someone (perhaps yourself) who has very little in the bank and $70k in student loans. If they both hate their jobs, who is going to have more freedom to walk away? Or who is going to feel more comfortable proposing a work-from-home setup? The person with a million in the bank.
I strongly believe that the more income streams you have and the better a financial foundation you build, the more freedom you have. You have freedom to do the work you want to do as well as take calculated risks such as quitting your job to focus on a business full-time.
The more money millennials have the more leverage they have to build the work setup that they want. If an employer isn’t accommodating, they have the resources available to look for work elsewhere. Or quit and strike out on their own altogether.
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Millennials focus on increasing their income isn’t about entitlement. It’s about being strategic and making sure they are able to make as much money as they possibly can and, in turn, having more options and opportunities.
After all, employers spend a good amount of time and energy finding out what the least amount they can pay their workforce and how they can get the most output from the least number of employees. Millennials – and everyone in the workforce – owe it to themselves to make as high an income as possible for their unique skill set.
Want to increase your income? At your job or otherwise? Here’s a few posts to help you get started:
Do you think employers are clueless when it comes to millennials and compensation? Would you turn down a 20-40% raise to leave your current job situation for another employer?
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Love this DC and couldn’t agree more. I think we’ve been told that focusing on income is selfish or makes us entitled, but the fact is, we’re making LESS than previous generations when adjusted for inflation – and not only are living costs higher but the debt is INSANE. Millennials should ABSOLUTELY be demanding more from their employers, not just work/life balance, but also, higher pay. Of course, we need to do our part too and provide the kind of value that commands higher pay too.
Agree 100% with everything you said! I think there are a huge number of millennials out there who are providing a ton of value to their employers who are not getting compensated enough. The rapid pace of technology really plays out in millennials’ favor as I think they adapt relatively quickly or come into the workforce already with some tech skills under their belt.
I absolutely agree with this. In my opinion, mo’ money usually means less problems. Like you said, having more money offers you the freedom to walk away from a job you hate, but it also means that you’re not having to stress about how you’re going to pay your electric bill, or pay for your kid’s Christmas presents.
Absolutely! I think in many cases having a higher income will mean less problems, especially those who are financially savvy and are focused on bettering their situation.
Awesome article David. Many people don’t like the idea of job hopping but there is nothing wrong with it. There really is no loyalty in business today, which is unfortunate but you just have to make the best of it. Even multi millionaire CEO’s are bouncing around with different companies so why shouldn’t Millennials try to move on to better opportunities?
And great point about student loans. Their effect really is understated since there is so much opportunity cost to constantly making monthly payments for years on end. I’d recommend paying them off as fast as you can, especially high interest loans, and give yourself the opportunity to have that money work for you.
Great point about CEOs, and this reminds me of a conversation I had with an external recruiter. They said those coming in are not put in a “stretch” position and are instead put into a position where they are very certain to succeed. In my case it would have been manager to analyst. But it makes no sense – could you imagine a Director or Vice President doing that? Or a CFO? It just makes no sense and I think recruiters will quickly find that this is not going to fly for millennials.
Thank you! As a millennial I do want it all and I’m not sorry.
I want a high-income, I want flexibility, to build wealth, have health & fulfillment, and have nice things. When people say more money = more problems, I think it’s used as an excuse to not learn about finances.
From what I know about you, you are also willing to provide a ton of value in exchange for “having it all.” I think there are some people who don’t want to put in the work and provide value, but you aren’t one of them!
I totally agree with your article. I also think with the absence of pensions that millennials have less reason than their parents to stay in one company all their life.
I believe that the Federal Government is the only area where millennials are less likely to job hop along with the job security but unfortunately I don’t have the stats to back up this hypothesis.
I think you are right about the Federal Government, but I also don’t have the stats. Perhaps one of us will have to write a post about it ; ) But if you have a job where it’s nearly impossible to get fired, it does sometimes make it worth getting paid less. But for the average millennial you are going to want to maximize your income.
I definitely think millennials do want a higher salary. I would be willing to concede in other areas for a large salary increase.
For example, two years ago I took a new job which resulted in a 25% salary increase. The new job meant less flexibility but I noticed the new company focused on development. Although I still have less flexibility, I have received three raises in 2.5 years. The salary increases have helped finances my other dreams – like blogging and starting a business.
That’s so great to hear! I think sometimes people forget to factor in how much of an impact a short-term sacrifice in flexibility can have on their future if it means an increase in pay. If you are financially savvy you can set yourself up nicely for the future, even potential early retirement or a drastic change in jobs/career/business.
This post hits home. Millennials are, generally speaking, more educated than other age groups, and yet, their salaries have actually fallen since 2000. It can be very discouraging. What would you suggest a millennial do when trying to negotiate a low-ball salary offer?
My suggestion would really depend on the specific individual’s situation. Do they have a few years of experience in the field? Are there other companies willing to pay them more for a similar position? Can this be a short-term job where they eat the lower wage and then use it as leverage to move to another company that pays higher salaries? There’s so much to consider that it’s tough to give a generic answer.
True! Millenials are in a complicated period because most boss offer you job with low salaries saying that there is crisis so if you want the job you MUST TO accept everything, But now most youngs need to manage 3 jobs at the same time to have a decent salray…is necessary to have a lot of patience
It can be really tough when you factor in debt, the need to gain experience, etc. It seems like after a few years of gaining experience, though, most millennials are well-qualified for higher-paying roles.
Great post DC and extra cred for referencing the #AskGaryVee show! I think another overlooked aspect of wanting more money is that our generation is getting experience a lot quicker.
In the past, if you wanted to learn a skill you went to school, graduated and started at the bottom level of an organization and build up your skills. But the internet has made it super easy for anyone to learn almost any in-demand skill (mostly tech related stuff) without having to work for someone else to do it. By the time a millennial makes it into the “real world” they have experience so they end up being overqualified for entry level jobs but don’t the the formal experience some employers are looking for (i.e. working for another company). The end result is they’re underpaid, and don’t feel fulfilled.
I could go on about this topic for days haha. But anyways, awesome post on a great topic!
Oh yes I’m a HUGE #AskGaryVee fan and if you don’t believe me my wife will be happy to tell you how much I talk about it haha.
Yes I think we could both write extensively about this topic and that’s not a bad thing because I think it’s a really important one. Even jobs like corporate finance and accounting which require “on the job” learning, after a 3-5 years you are extremely well qualified for high paying jobs…but employers are always looking to save on employee costs so it’s tough to get what you deserve.
I forget the exact stat I heard in high school but I think they said Millennials were estimated to change jobs 10 or 12 times during their working career. If you include my part-time high school jobs, I have had 4 different employers so far in 10 years.
We are also the most indebted generation to enter the workforce too (as talked about in the book Generation Debt). But we have a better quality of life than our predeccesors if you count technology, etc.
Money always talks. I think one fear is you need to climb the ladder or you get “pigeon-holed” and end up making the same salary your entire career if you stick with the same employer.
It’s a loaded answer & I think the challenge is finding the best of both worlds. We know we don’t need to work 3rd shift in a factory to feed a family, but not everybody can have a cushy 9-5 office job either.
Nice to see you back writing here DC! While all articles on the site are great I particularly enjoy yours ;)
In answer to your questions:
Do you think employers are clueless when it comes to millennials and compensation? I’d say not completely clueless although they could certainly be more flexible with i.e. reducing pay for reduced hours
Would you turn down a 20-40% raise to leave your current job situation for another employer? It would really depend for me, based on the hours, time to travel and type of work.. I suppose I’m one of those annoying people :P haha
Thanks for writing man!
Haha you aren’t one of those annoying people at all! Thanks for the kind words. I like to write but I’m juggling a couple projects right now and really grateful for an understanding wife and some great contributors on the site.
I think there are some variables that come into play, but assuming all things equal and the employers are comparable (i.e. hours you will work, location, etc.) I think people will often take the higher pay even if it means leaving their company.
Agreed man and have seen a few of those projects in the works!
Exciting times :)