Arguably no group has felt the brunt of layoffs, lockdown-induced closures, and hiring freezes in the past six months more than young workers. An International Labour Organization report found that one in six people under 24 had stopped working since March, with those still employed taking a 23% cut to their work hours. Job prospects for recent grads look grim too, with entry-level postings falling by more than 70% on popular job sites like ZipRecruiter.
We’ve seen this before, most recently in the Great Recession, when young people were hit hardest and continue to feel the impacts of lost jobs and financial insecurity. Right now, employed young workers are considering their situation and looking for ways to limit economic uncertainty. In many cases, this means proactively seeking new employment. My company recently did a data dive on more than 100 organizations and found that, since May, there’s been an increase in people 25 and under voluntarily leaving jobs. In many industries—most notably in competitive fields like tech, finance, and advanced manufacturing—they are actively moving from risky startups to well-established giants who continue to hire despite the pandemic.
This stands in stark contrast to the belief many business leaders hold that cutting entry-level positions will help them survive a crisis, and that there will always be young, hungry workers willing to fill those jobs when things start to pick up. There are many reasons this short-term thinking is wrong, and can have long-term consequences that will ultimately hurt companies as they try to rebound.
The danger of thinking young workers are disposable
In a crisis, many managers argue young hires aren’t worth the effort and expense to keep because they have limited experience and are often thought to have minimal skin in the game. The data, however, says the opposite. In fact, there’s no higher financial ROI than investing in your entry-level employees—501% according to one study, a larger return than investing in mid- or senior-level groups. Because these employees are early in their career, they have the most room to grow, a higher tolerance for risk, and are more likely to invest in an employer that invests in them.
In turmoil, employers understandably think there’s safety in consistency—that longstanding employees know the ropes and leaning on “experience” is less risky than taking a chance on untested candidates. But here’s the thing: In a pandemic-driven recession, no one has “relevant experience.” Not one person in the workforce today has gone through anything like this or knows what to do. And unfortunately, sometimes the “reliable” older workers get caught in complacency, and are unwilling to take risks or do what it takes to push the envelope through unprecedented times.
This isn’t to say senior employees don’t have a role to play. But there’s another unavoidable issue we must grapple with even after this recession ends: a rapidly aging workforce with 10,000 baby boomers turning 65 every single day. Massive workforce turnover is inevitable, which means today’s new hires are the future of your company. They will likely be the ones to lead the way in the new normal that will reveal itself when the dust finally settles. That’s why we haven’t let go of any interns since the pandemic struck, and we’re still hiring students.
Many companies are struggling just to stay afloat or have been forced to revise, rewrite, and completely rethink their business plans. But when the economy rebounds, the battle for workers will heat up again. (Indeed, in competitive sectors it never dies down.) By doubling down on entry-level talent right now, you gain a competitive edge and set your company up to be resilient beyond the pandemic.
Want the best out of young workers? Invest
Employers tend to assume there will always be young talent knocking on their door when a job opens up. We’ve found that isn’t entirely true. As a growth-stage tech company specializing in workforce data, we’ve seen how hard it can be for companies like ours to appeal to young talent over established giants.
The solution? Follow the lead of the top companies in your field, and you’ll find most invest heavily in recruitment and development, no matter the economic climate. Apple, for instance, has its own internal university-style training program, and Amazon has spent $700 million to upskill its employees. Both companies’ stocks are trading at all time highs—not just because consumers are turning to their products and services, but because investors believe they’re well-positioned to deliver growth far into the future.
My firm’s approach has been to invest in the recruitment and training of co-op students—who alternate semesters of postsecondary education with paid work terms at our company—and embrace a culture of teaching and learning. We have a development team whose entire purpose is to train young staff, whether that means teaching them code or coaching them through new projects. This requires significant resources, but we understand in practice what studies have proven: It’s more cost-effective to build talent than buy it. In fact, companies with major training programs can earn 218% higher income per employee than those without, so the reasoning behind these investments is clear, even in a downturn.
Managers may feel like they don’t have time to commit to this type of training, but it’s important to make clear that teaching and mentoring is a company-wide priority and dedicate resources to help senior employees excel at this part of the job. Research shows time and again that employees who don’t feel supported in developing their skills are more likely to leave, so investing in training isn’t just critical to develop the next generation of leaders, but also to ensure that they stay.
Measuring ROI for the long-term
I’m aware that focusing on this type of investment might seem crazy right now. The reality is you won’t get an immediate ROI, and despite these investments, a certain amount of churn is inevitable. But I find taking extra steps to keep these workers engaged helps mitigate that risk.
One of the ways I do this is through a rallying cry—a single, focused, achievable goal that everyone is working toward at our company and gives young people confidence that we’re committed to their success. Currently, ours is to pass a specific revenue target in the next 18 months. It’s simple to understand, and it provides everyone with a shared intent and helps our younger workers see that we have a long-term future that includes them. In my experience, having a common goal like this helps instill a sense of loyalty that goes both ways—and although some of our younger team members may ultimately move on, they’re more engaged and productive in the time that we have them.
I know that everyone is in survival mode right now, but leaders forget that there’s a future on the other side of this crisis. Having a well-stocked team of motivated young workers who are willing and ready to go the distance is their best bet in successfully making it through this pandemic—and in being prepared the next time a major crisis erupts.
Ryan Wong (@ryanhywong) is an engineer turned CEO of Visier, a business intelligence platform.