Millennials Are in the Driver's Seat as Companies Ramp up Hiring

Young people are finally returning to the workplace, the March employment report showed. That means companies will have to make a bigger effort in recruiting. As the job market tightens, how are firms going to get the best recruits?

The surge of young people into the labor market is a welcome change. In March, those between 20 and 34 years old represented three-quarters of the total growth in employment. For the first three months of 2016, they represented half of the growth in the household survey.

Competition for their services creates opportunities. Millennials will increasingly have the choice of positions and greater opportunities to get the jobs they want.

The Labor Department’s data on job openings and labor turnover for February, released on April 5, shows that the number of hires rose to 5.4 million from 5.1 million, the highest since November 2006. In addition, the number of job openings declined to 5.4 million from 5.6 million. Thus, job seekers will have more opportunities.

Companies will have to compensate or make concessions. J.P. Morgan Chase is encouraging its investment bankers to take weekends off when they don’t have deals.

Greg Karr, executive vice president for Seven Step RPO, an executive-search firm, told me that young people see the tech sector as the future of work. It has more risk than in other fields, but millennials like what they see as the unlimited opportunities and the flexibility. It’s the latest gold rush.

Other sectors, such as finance, are having a harder time. For those who want a balanced lifestyle, the thought of 60-hour weeks at a computer in New York City is not as attractive as 60 hours wandering around the Google or Facebook  campus near San Francisco.

Imitation is the sincerest form of flattery, and some companies are setting up bases in the Bay Area to attract young recruits and to get the synergy of the high-tech centers. General Motors and Ford have offices in San Francisco, where staff can rub shoulders in the bars with scientists from the Bosch Research and Technology Center and other similar companies.

It’s about time for other sectors such as banking to take a page out of tech firms’ copybooks, Karr told me. The Dodd-Frank Act and its associated regulations have raised the demand for people in banking. One small example: Banks have a requirement to provide a point of contact for borrowers. That means banks need to expand their mortgage departments to hire the necessary personnel.

Companies will have to compensate or make concessions. For example, J.P. Morgan Chase is encouraging its investment bankers to take weekends off when they don’t have deals. Westport, Conn.-based Bridgewater Associates, the world’s largest hedge fund, provides a bus from New York City to headquarters, just as Google does from San Francisco to Mountain View.

Some financial firms, such as Bloomberg, are trying to copy the open plan look of high-tech companies. Walk into the reception area at Bloomberg in New York City and you’re greeted by an array of food stations with fruit, energy bars, bagels and drinks, all at no charge. It’s part of the compensation package. Offices have disappeared; instead, people are seated in large open spaces.

Some millennials have complained to me that they can’t get any work done in these large open spaces, and that the noise-canceling headphones they bring to work give them headaches. They would like to go back to the quiet of an individual office. But the point is that companies are searching for ways to compete. If open plans won’t work, companies will be forced to add quieter environments.

The job market is looking up, and millennials are regaining the advantage.

This piece originally appeared in WSJ's MarketWatch