Many businesses were built on the old school ideal that employees are loyal and that they work to make a living. This assumption poses an interesting risk when a business is being bought or sold–a risk most people don’t even realize is there. What if the future workforce is more concerned about purpose than a paycheck? What if loyalty is no longer assumed and must be earned?
When looking at buying or selling a company, consider this:
If your company culture relies on people who just work for a pay check, you could find yourself having a tough time hiring and retaining staff. If your company culture relies on loyal workers who just come to work, do their job, and go home, you could soon find discord in your company, when the culture begins to shift beyond your control.
How could this be? Are loyalty, earning a pay check, and work ethic not good? They’re valuable, but people are not automatically loyal to companies anymore. Many have already played that game, or they watched their parents play that game, and they lost. They watched the generations before them work their life away, sacrifice their family, then maybe not even be able to retire.
In general, Millennials are not as concerned with profits, corporate ladder, or convention and ritual as their parents. They are more concerned with purpose and relationships. They value quality of life over standard of living. So, if your company is based on “you work because I pay you” then every day that baby boomers age and Millennials take over, the value of your company is going down.
Speaking of Millennials taking over–that’s not the future–it’s now. According to the U.S. Bureau of Labor Statistics, Millennials make up 50 percent of the American workforce. If you sit around complaining about how they are whiny, don’t follow policy, are ungrateful, entitled, don’t respect authority, and all the other stereotypes, then your company doesn’t have much of a future. Those same Millennials are starting businesses–companies that understand Millennial culture. Companies that will hire and retain this hyper-connected, tech-savvy and ultra-efficient generation. Companies that will leave you with the leftovers–the leftover Millennials that aren’t sharp enough, and the Baby Boomers and Gen Xers that blame “kids these days” for why your business is going under, instead of leveraging them. But don’t worry. When your business goes under, these Millennials will give you a participation trophy. After all, that’s what we did for them–but I digress.
How does this affect buying or selling a company? Well, people often think buying and selling a business is about the numbers, so let’s look at the numbers. If 50 percent of the American workforce is made up of Millennials, and your company has very few, then what does the future look like for you?
When buying or selling a company, you will often project financial performance, but consider the following projection. The American workforce is likely to move from 50 percent Millennials to 75 percent in 13 years, according to the U.S. Bureau of Labor Statistics. If your company culture can’t deal with all their stereotype “opinions” (read: challenging your status quo) and “commitment issues” (read: you need to earn their respect or someone else will), and you don’t know how to harness the massive amount of talent they bring, then you have a problem.
On the flipside, a word of caution is appropriate. Don’t sacrifice the experience of older or more experienced leaders–add to it. And moreover, if you have an experienced leader that understands the millennial culture; one that can leverage their own experience; and one that can lead the best and brightest of a younger, digitally-oriented generation, then you have a highly valuable asset.
So, what’s the bottom line? In my opinion, a company that knows how to attract and retain Millennials is more valuable, more sustainable, and has better growth prospects than one that doesn’t. A company with a culture that values both long-term experience and fresh ideas, and where experienced leaders and young leaders are equally respected, is a company with a bright future. This is not just because of the future demographics of the workforce, but because if your culture is not evolving, then your product, service and company probably aren’t either, and you’re about to fall behind.
If you arebuying a company, factor these things into your evaluation.
If you are selling a company, read up on the subject, value and respect the millennial culture, embrace it and recruit the best and brightest of all generations.
Millennials don’t just bring risk to business acquisitions, they also create long term value. The real risk is that you miss out on that value.