How to engage a generation that does not buy cars and apartments anymore

 

Introduction

A decade ago, if you didn’t like your job, seniors suggested that you simply buy a house. The EMIs associated with the home loan would make you start loving your job. And thus reconcile yourselves to tolerating everything evil/unexciting that corporate life brings for you.

Not anymore! The ‘carrot and stick’ approach to handle employees may no longer be relevant as there is nothing that threatens the youth of today, be it job insecurity or denial of promotion. So this might have its own share on repercussions for employee engagements strategies that you need to employ for the millennials.

Their mantra, as articulated by James Hamblin, The Atlantic’s columnist[i] is:

Successful people don’t buy property — they rent.

If you want to be considered successful, invest in experiences: travel, do extreme sports, build startups.

People now don’t want prosperity and stability — all they want is flexible schedules and financial and geographical independence.

People have started to have no interest in material things

It’s a generation that believes in living in anticipation, gathering stories and memories

Nowadays, the traditional measure of success — owning an apartment and/or a car — is out of date. An increasing number of young people around the world don’t want to buy them.

Case in point

 

The current generation has re-defined the concept of success and thus, there has emerged a potential difference between our parents’ generation and today’s generation.

My first experience of this change of thought was when my spouse Anurag decided to pursue a 1 year MBA at IIM Ahmedabad. We were just 2 years into our wedding with a 10 month old daughter. Conventional wisdom suggested that we buy a house. He decided to make a financial outlay of INR 40 lacs+ (incl. the opportunity cost) on his MBA experience instead.

And he is not alone. This year, seven Chartered Accountants in our circle have opted to pursue a one or two year MBA at institutes ranging from IIM A/B/C to ISB to Harvard and IE Business School.

The concept of ownership is no longer relevant

  1. Why own a car if you can take a cab? It’s almost a personal car with a driver. And it’s not more expensive than having your own car.
  2. Why buy a house in a beautiful place and go there for vacation, if you can find a place to stay through Airbnb in any corner of the planet? You don’t have to overpay for rent or buy a property in a country you love.
  3. The same thing with real estate in your hometown: You don’t know how long you’ll stay where you live. You can take on a mortgage for 40 years, or you can accept the fact that you’ll spend your whole life in a rented place. You’ll probably change your job in the next few years. If you rent, nothing prevents you from moving closer to the office. According to Forbes, modern young people change jobs every three years on average.

James Hamblin, The Atlantic’s columnist, explains the phenomenon as follows: ’Over the past decade, psychologists carried out a great amount of research proving that, in terms of happiness and a sense of well-being, spending money on new experiences is much more profitable than buying new things. It brings more joy.’

Experience is the only thing that matters: it won’t go down in price, and no one can steal it.

Why so?

Actually most of us have a pretty intense capacity for tolerance, or hedonic adaptation, where we stop appreciating things to which we’re constantly exposed. I-Phones, clothes, couches, etc, just become background

But not with experiences. It’s the fleetingness of experiential purchases that endears us to them. Either they’re not around long enough to become imperfect, or they are imperfect, but our memories and stories of them get sweet with time

When it rains through a beach vacation People will say, “Well, you know, we stayed in and we played board games and it was a great family bonding experience or something”. Turns out people don’t like hearing about other people’s possessions very much, but they do like hearing about that time you saw Vampire Weekend.”

(“What did you do this weekend?” “Well! I’m so glad you asked … “) is the new social connector.

Experiential purchases are also more associated with identity, connection, and social behavior. Looking back on purchases made, experiences make people happier than do possessions.

Take Home Message

It’s an evolutionary change, where we are moving away from Materialistic value to Higher Emotional Value to Life!  It’s a shift in Maslow’s hierarchy.

As experience and not “fear/insecurity” has become the new age motivator, organizations must examine the motivations of Millennials, and adjust their employment strategies accordingly.

Thus managers can’t thrive on acting as drivers of the car, with co-passengers forcibly travelling just because they have EMIs to address

Great managers now need to ensure that their young team members feel like they are players in a video game : clear on the big picture, empowered to take action, coached in the moment, recognized for their efforts, and working together to achieve the goal.

Their new mantra is –

Involve me, coach me and invest in our success; together, we will succeed; just let me drive with you

Thanks & Regards

Sonia Singal – Founder: cajobportal.com – India’s first recruitment website exclusively for finance professionals

https://youtu.be/mkZorCRHYbE

[i] https://www.theatlantic.com/business/archive/2014/10/buy-experiences/381132/