Just when a little positive economic news began cropping up recently, new concerns have surfaced about the effects of the downturn on younger workers. A recent report by Business Week says the long-term negative impact of unemployment (and underemployment) on Millennial job candidates could be widespread.

The article points out that, “While unemployment is ravaging just about every part of the global workforce, the most enduring harm is being done to young people who can't grab onto the first rung of the career ladder.” (“The Lost Generation” by Peter Coy, BusinessWeek, October 8, 2009) The article goes on to point out that “Only 46% of people aged 16-24 had jobs in September, the lowest since the government began counting in 1948.”

We’ve seen this phenomenon before. In our book, Keeping the Millennials: Why Companies Are Losing Billions To This Generation and What To Do About It, Jan Ferri-Reed and I point out that Generation X also began entering the workforce amidst a global recession and hyper-inflation. The ‘late starting’ Gen Xer’s were frequently labeled ‘slackers’ by many and took longer than usual to begin reaching the career milestones met by their parents.

Now there are signs that a similar fate is falling on Millennials and the prospects for the rest of us look pretty grim, too.

Lower Expectations, Higher Stress

We all know that hiring slows down during a recession. That’s simple economics 101. But, what we tend to forget is that a shortage of new hires fresh out of college could result in a shortfall of promotable employees down the road. Even worse, Millennials that manage to find only entry-level positions without advancement possibilities could experience a lifetime of underemployment and reduced wages.

That could also be bad news for Baby Boomers who may be retiring soon and relying on the younger generation to fund their social security, which could see shortfalls because of the Millennials’ underemployment.

But the psychological impact on Millennial employees themselves could be worse. BusinessWeek compared the current situation with Japan, which experienced a similar economic challenge in the 1990s. The Japanese are now finding that “workers … in their 30s account for 6 in 10 reported cases of depression, stress, and work-related mental disabilities.” (According to the Japan Productivity Center for Socio-Economic Development)

Pre-emptive Management Strategies

We know from our client consulting in succession planning and leadership development how hard it can be to plan for the future. But faced with current conditions and future prospects, the time for organizations to act is now … not when the economy loosens.

A priority should be to retain young talent, if at all possible. I know that flies in the face of conventional wisdom (the last hired are usually the first to go). But before you give any of them the ax, evaluate the current Millennial employees on staff and determine if they could indeed be successors in the organization. They are, after all, the future of your organization. Your efforts to recruit and retain them will pay off in the end. Some things to remember:

• Continue interviewing Millennial candidates – Even if you’re under a hiring freeze it’s better to retain an active file of potentials you can tap into when the budget is restored. And by assessing them during the interview process, you will have the best fitting candidates ready to start when you are ready to hire.
  
  
• Hire recent grads and young candidates whenever possible – You have to keep talented employees in the pipeline and holding off hiring altogether now may create a future gap you can’t easily bridge.
  
  
• Implement internship programs – If you don’t have a budget to hire full or part-time employees you can always fall back on offering internship opportunities. In a tight job market there are always younger graduates who are thrilled to gain the experience.
  
  
• Increase skill development and cross-training opportunities – Your Millennials could become discouraged if it looks like career advancement opportunities in your organization have evaporated. Training will not only keep their spirits up, it will assure you of qualified candidates ready to assume new responsibilities.
  
  
• Continue career planning reviews – In addition to the usual performance reviews you should also be holding regular career-planning discussions. Help your Millennials to keep focused on the future and they’ll likely repay you with loyalty.
  
  
• Provide special assignments and team project opportunities – Don’t assume your younger employees will just be content to “have a job” in these tough economic times. Special projects can challenge their intellect and keep your employees engaged, even if they’ve outgrown their entry-level responsibilities.

Hopefully the general economy will start rising again, along with recent gains in the stock markets, and organizations will resume adding jobs. But, rather than waiting for the economy to bounce back this is the time for managers to become proactive and optimistic.

For more information on Keeping the Millennials: Why Companies Are Losing Billions To This Generation and What To Do About It, please visit http://www.keygroupconsulting.com/products.

Complimentary Webinar

Title: They're Just Not That Into You! How To Attract And Keep Generation Y

Date: Tuesday, October 27, 2009

Time: 12:00 PM to 1:00 PM EDT

Cost: FREE

This informative webinar is being presented by Dr. Jan Ferri-Reed, President of KEYGroup and co-author of Keeping the Millennials: Why Companies Are Losing Billions In Turnover To This Generation And What To Do About It.

After registering you will receive a confirmation email containing information about joining the Webinar. Space is limited so act now! Space is limited. Reserve your Webinar seat now at: https://www1.gotomeeting.com/register/789854168

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