Money does matter for millennials
Work-life balance and a chance to grow on the job may be important but the total compensation package is very often the deciding factor
Young professionals may discuss learning and work-life balance, but research suggests that money plays an important role in their choice of job.
The Employer Brand Research survey by employment agency Randstad in April confirms this, revealing that 47% of 25- to 44-year-olds ranked salary and benefits as the top criteria for a job, ahead of work-life balance and career progression. A survey by job website Indeed, conducted in the same month, found that 83% of Indian millennials would consider switching jobs for a pay hike.
The factors that play into this include financial support from parents, and whether or not the millennials have to pay off education loans.
“It is unfair to say money doesn’t matter to millennials,” says Anirban Gupta, senior consultant at consulting firm Aon Hewitt. “This generation has a confidence factor, they are a part of upwardly mobile India. They know their worth. For them, the only reason the money issue disappears is because they know the money is already on the table,” he adds.
“No one wants to go for a pay cut, that is a given,” says Ashwini Rakhame, 31, who has changed three jobs in four years. Rakhame, whose stints include sales and marketing at a health start-up, as well as a product management role at a pharma multinational, says each job has come with a salary hike of 15-45%. Like many millennials, Rakhame had to pay off an education loan for her diploma from the Indian Institute of Management, Calcutta (IIM-C). In addition, she spends on travel and now has to pay off a loan for a flat in Mumbai. “Sure, I want to experiment with jobs and find the best job that fits my needs,” she says, “but while the quality of experience matters, money is important.”
“As a student looking for a job, the first thing is salaries. Roles, responsibilities and work-life balance are second,” says Mumbai-based Harshit Garg, 23, who works as a management trainee at Pidilite Industries Ltd. He says the primary basis for job comparison among peers is the CTC (cost to company). Companies know this, so while they may have great leadership programmes, good job roles or perks like foreign training programmes, they are very competitive with total compensation. “Even the summer internship stipends are competitive and can pay around Rs1 lakh a month,” he says.
Yatharth Chaturvedi, who is part of the graduating class of 2018 at the Indian School of Business, Hyderabad, says he accepted a job in real estate, which came with a marginally lower starting salary, only because he felt the growth prospects in the sector are better in the long term. But he made sure the salary would support the cost of living in a metropolis like Mumbai, as well as paying his education loan instalments. “Money is a major factor in our choice of jobs,” says the 27-year-old, who will start work in a few months.
For millennials from tier 2 and tier 3 cities, money continues, in fact, to be the most important factor. The students who choose to join start-ups or other companies that pay less, typically come from relatively well-off families, where parents tend to be financially supportive and more indulgent of their children’s aspirations, says Leena Chatterjee, professor, organizational behaviour, at IIM-C. “If you look at how placements are driven at B-schools, a large part of the preferred, most glamorous companies are the ones that pay the highest salaries,” she says.
Attitudes to money also change with the level of specialization and cognition involved in the job, says Gupta. “If you are struggling to find a job or working at a BPO, every extra lakh makes a difference. But as an engineer from a premier institute like Indian Institute of Technology, you won’t be fussed about whether you are paid Rs15 lakh or Rs16 lakh and can look at self-actualization,” he says.
So, while compensation packages will always rule at lower-skill jobs, Gupta says, companies that want to attract talent in specialized job roles should concentrate on making sure learning and experience on the job are good, rather than simply paying an incremental sum