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The Secret To Attracting – And Keeping – Young Talent

There is a disconnect in the world of business right now, I would suggest. A gulf between the generations. Between those owning and running businesses, and those who work for them. Some Statistics First, let’s have a look at the current situation;

In FTSE 150 companies, The average age of a director in the UK is 53.4. The average age of a non-executive director is 60.3. Only 8.5% of executive directors are women and only 8% of all directors are black or ethnic minority. The average tenure of a CEO is 4.7 years. 76.4% of Chairs sit on more than one company board. Source: Spencer Stuart Board Index 2017 and 2018. Turning to the small to medium size business sector (SME), the average age of UK business owners is 49, with a peak between ages 47 to 55.

73% of SME business owners are male. 85% are UK nationals. Of particular significance to this article is the statistic that some 3/4 of small businesses are in the control of only one person. Source: Thatcherism Those of us who are in the 50 – 60 age bracket grew up during the 80s, a period of Thatcherism. This virulent strain of monetarist economic policy provided opportunity for business to thrive by removing many of the barriers that were then in place.

Regardless of your political and economic view (for some Thatcherism lay the foundation for economic growth and opportunity, for others it began this protracted period of the division of wealth), it is undeniable that business practices in those days became more aggressive. Art copies life. Films such as Wall Street, with its mantra ‘greed is good’, or Glengarry Glen Ross, may have been caricaturing business attitudes of the age, but their roots are in reality.

Outdated Attitudes This is the environment in which the majority of business owners today grew up. It is therefore not surprising that they still apply these approaches to running their business.

Recently I heard the senior partner of a large firm of solicitors expressing frustration about those who wanted to become junior partners needing to “prove themselves”, to “show commitment”. He did not mention what the firm might do to help. I often hear business owners expressing frustration that their employees are not ‘stepping up’. I ask them what they have done to make way so that there is a space for the employees to step up to. Another constant gripe is that there is no commitment from young employees anymore, and that they move around jobs on a more regular basis. Yes – because you are not giving them what they want!

Young People Of Today Whilst I do not purport to speak for the younger generation, it does seem to me that, as a generalisation, they want different things from work than my generation. They are more interested in purpose than profit. Working conditions, such as the flexibility to work at home, is important. Having a defined role in the business, and not just emptying an in tray every day (Daniel Pink’s book Drive is particularly eloquent on this subject). In particular, money is not the solitary objective that it was made out to be in the 1980s. An MD friend of mine, running a company with some 60 employees, told me that the most popular decision he made was to get rid of the staff bonus scheme. It had been divisive and constantly a problem.

New Methods There are new ways of doing things, and they are becoming increasingly popular. For example, the BCorp is a wonderful badge for any company who that wishes to demonstrate it is a modern thinking business. The Employee Ownership Trust (EOT) is an ownership model that not only gives the employees a voice in the business, but also helps in sharing the reward. It is also, in many ways, the ideal exit for the small business owner, as they receive their value for the business but see it continue.

Businesses such as Nucleus operate a ‘people centric’ approach to HR. The head of that department, the inspirational Kirsty Lynagh, holds the title of ‘Chief People Officer’.

Employee Migration Over the coming years, I believe we will see a migration of young talent to companies that demonstrate a real understanding of their employees. Imagine you are a bright young thing whose services are in demand. You have two job offers in front of you. One is from a business that is owned by one person, who takes all the decisions and keeps the majority of the profit. The other is from a company owned by an Employee Ownership Trust, where are you are able to have a say in the running of the business and share in the profit. I think it’s pretty easy to imagine which company that person is likely to join.

What Next? Young people move jobs more often not because they are fickle, but because the jobs available to them do not provide what they seek. In other words, it is time to stop blaming them, and make changes to our businesses. The good news is that there is a lot business owners can do to change. Collaborative decision-making; giving the employees a voice; creating clear purpose; and new ownership structures. Such ideas are well developed and advanced to help create businesses which are more likely to attract talent of the next generation.

Chris Budd is chairman of Ovation Finance Ltd. He sold a majority stake to an EOT in 2018, and now advises businesses on succession planning in general, and the EOT in particular.

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