If you're running a business in the United States, chances are that just over 30 percent of your workers are millennials. This generation, made up of individuals between the ages of 18 and 34, became the largest portion of the workforce as of the first quarter of 2015, according to a Pew Research Center analysis of U.S. Census Bureau data.
Business owners can better serve their current workforce and help prepare for future human resource decisions by taking a look at salary trends for millennials.
Earning Less Than Their Parents
One of the more surprising salary trends for millennials is that in the long run, it appears they aren't earning as much as previous generations. Business Insider analyzed the median weekly earnings of 25-to 34-year-olds from 1979 to 2013, adjusted to 2013 dollars. In 1979, the average weekly pay for this age group was just under $825, yet in 2013, it had dropped to just $713 per week.
Starting Salaries Increasing
Though they're making less than young workers in previous years, experts forecast starting salaries for professionals in the United States will increase by an average of 4.1 percent next year. This includes a healthy 5.3 percent increase for tech pros and a 4.7 percent average increase for accounting and finance hires, says international staffing firm Robert Half & Associates.
No Stock Options, Please
Unless they're too young to have been impacted by the 2008 recession, millennials are less likely to be interested in stock options as part of an incentive package because they are wary of stock market drops. They're also less likely to invest money for retirement through 401(k) plans and may not place as much importance on a retirement savings plan as part of an overall compensation package. Forbes notes that these trends stem from lower levels of investment know-how among millennials.
More Education Equals More Money
Various studies have shown that the single-most important determining factor of a person's future income is their education level. As the most-educated generation in history, millennials are well-positioned to improve their income and earn higher salaries in the long-term, despite the fact that many of them started their careers during or immediately after the Great Recession of 2008. Recent studies show that the gap between college-educated millennial workers and those who received just a high school education is growing, resulting in a wider salary divide within this age group.
As baby boomers leave the workforce to retire and younger workers take their places, salary trends for millennials will have a great impact on hiring budgets for business owners, and on the economy as a whole.
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