A new understanding of Millennials

Generational differences reexamined.

The behavior of Millennials has been shaped by two major factors: the Great Recession, which hit them harder than it hit older generations, and explosive growth in student debt. However, other observed differ- ences in their behavior—differences that set Millennials apart from people of similar age in prior years—largely reflect trends that have impacted all age groups, not just Millennials. The hallmarks of the American dream, such as cars and homeownership, are more a dream deferred than a dream abandoned for Millennials. A better understanding of how external factors are affecting the timing of Millennials’ transitions can help employers craft programs to address the needs of this challenging group.

Understanding Millennials

In the United States, economists, busi- nesses, and policymakers have been study- ing demographics intensely since World War II. Indeed, following the war, a new unit of measurement arose: the labeled generation. The Baby Boomers—those born between 1946 and 1964—were the first generation to adopt a widely accepted label. Then came
the Gen Xers, followed by the Millennials (sometimes referred to as Gen Y). Though there is no universally accepted definition, the term “Generation X” is often applied to those born roughly between 1965 and 1980, and “Millennial” to those born between 1980 and 1995.

Millennials have been widely studied, with numerous surveys highlighting ways in which they differ from older generations. For exam- ple, a survey by Pew Research Center revealed that Millennials are much more likely than Boomers and Gen Xers to describe themselves as political independents. Another survey by Deloitte found that Millennials wanted busi- nesses to focus more on “people and pur- pose.” No wonder, then, that many studies on Millennials, especially those on workforce pat- terns, are driven by concerns that Millennials may be following radically different career trajectories than prior generations.

As we describe below, Millennials are indeed different from prior generations of young people in a number of ways. For exam- ple, Millennials are living at home longer, are slower to buy a car, and are much more likely to have student debt. However, other than their high levels of student debt, many of the attri- butes associated with Millennials are related
to the economic conditions prevailing at the time when they came of age (like the Great Recession) rather than fundamental differ- ences in their aspirations. This has implications for human capital strategies, especially regard- ing the advantages to employers of taking a “customer segmentation” approach toward Millennials. It also can inform strategies for how federal, state, and local governments
can overcome some of the perceived difficul- ties in attracting and retaining Millennials in their workforces. 

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