There is a now famous line in Australia where the suggestion was made that the real reason young people can’t afford to buy a house is because they spend all of their money eating smashed avocado for brunch ($20) when they should be saving for a deposit (Sydney median house price about $1,000,000). Everyone had a good laugh at this but it is reflective of a new type of corporate graduate; the live at home, no risk, avocado munchers.
Alongside the house price growth, we have created a world which is more short term, more connected to opportunities and with increased expectations of what is possible for people in their twenties. When I joined a consulting firm in 2004, the was still a typical trajectory to follow; start at the bottom, compete heavily to learn, save enough for a deposit on a house, marriage/kids, pressure to maintain mortgage e.g. need to stay with consulting firm at higher wage point. I’ve been lucky to have worked with a lot of graduates over the years and there is a definitive trend (certainly in Australia) where they increasingly live at home, they are given opportunities to move employers earlier (and not just the high flyers) and they see their learning pathways not just in terms of their employer but as a wider system of opportunity.
Essentially, a graduate of 23 no longer sees risk in the same way as we did even 10 years ago. If the chance arises to do something fascinating outside of the corporate world, to set-up a business selling socks or move fields completely I believe they are much more likely to do so now than ever before. Contrast this with the core corporate ethos for graduates namely; graduates are a cost, VP’s and directors are a cost, the objective is to invest in graduates to get them to Senior Analyst/Consultant or Manager grades where they make the real money and add the most value.
This approach no longer matches up so I’m calling for a new approach to managing grads in the corporate world
1) Holistic rewards – we typically see rewards as money and then benefits as a cheap film tickets and vouchers for the supermarket. For graduates, what we typically don’t appreciate if that they’ve come from a word where they’d paid lots of money to learn (University). When they come into a graduate position, the dynamic shifts completely. Rather than see salary as $100, why not see it as 100 units where units can be exchanged for external learning, trips to labs in San Francisco, exchange programs, increased holiday. If we change the dynamic away from a purely financial transaction, we will be able to better fulfil graduate’s expectations of value. Put simply, if you are living at home with no chance of getting house, your salary is probably not the major driving force in your life right now.
2) Long term incentives – corporates are terrible at thinking in medium to long-term for resources. I can usually tell within a couple of months whether a graduate is going to be great, average or mediocre. For the ones that we think are going to great, why don’t we try and lock them into NBA style long term contracts. We are going to give you a $100k in cash right now, your 2018 H2 is planned to be in our offices in New York, Singapore or London, in 2020, you will have this salary and this job title if you meet the following objectives. We should be applying a total cost of ownership calculation to our grads over 5 years and invest accordingly.
3) The Avocado Café – Start-up mentality – every graduate knows of 10 people their age who are billionaires and 10 people they’ve heard of working in start-ups in Melbourne or design agencies in London. Almost all of them are convinced they would be just as successful if given the opportunity and a number of them try. They should be celebrated for this mentality but they should be channelled into making that a success for the business. We should be putting some skin in the game in allowing the graduates to try. Why not create a real commercial venture within the corporate and put the grads in charge with equity and profit share. An increasing number of grads join with ‘entrepreneur/euse’ written on their CV and they either immediately give it up or run it on the side which is then the thing they’d rather be doing. They could be running the Avocado Café outside your office
We are operating in a world where expectation and potential is a quantum jump away from what it used to be. It’s time maybe to think a bit smarter .