By 2025, the Millennial generation (born between January 1983 and December 1994) is projected to make up 75% of the workforce. (Deloitte, 2017)
Yet, they are experiencing the highest rate of mental illness and stress than any other generation. They are also fast emerging as a generation that is most in need of special attention due to high unemployment, high underemployment, and high levels of student loan debt.
The 2018 Stress in America survey showed that Millennials are significantly more likely (27%) than any other generation to report their mental health as ‘fair’ or ‘poor’.
In Canada, 63% of Millennials have been classified as at ‘High Risk’ in 2017, up from 56% the previous year and 53% the year before. (IPSOS, 2017)
With stress levels running high for Millennials, 78% are worried about having good-paying job opportunities and 79% are worried that they will not have enough money to live on when they retire. (EY, 2016)
Ironically, as Millennials (and Gen Z) are better educated than any other generation, they can’t even get full-time employment in their chosen profession or career.
In fact, there will be more unemployed college or university graduates looking for their first jobs than ever before. This imbalance will only get worse in the coming years.
Unfortunately for Millennials and Gen Zs, the number of U.S. workers in occupations requiring average to above-average education, training and experience have increased from 49 million in 1980 to 83 million in 2015, or by an increase of 68%. (Pew Research, 2016) With automation and workplace transformation, the increase will only get larger.
Millennials now account for nearly 9 in 10 U.S. resident part-time MBA candidates. (Graduate Management Admission Council, 2018)
Better educated Millennials across the developed world are now plagued by higher levels of unemployment and underemployment.
With the growing number of people entering the labor market across the globe, the pace of labor force growth will continue to outstrip the pace of job creation according to the International Labour Organization.
This means that there will be more job seekers than job vacancies.
As a result, many graduates are forced to take any job that comes along. Forty-three percent of U.S. college graduates take a job out of school that didn’t require a degree (Burning Glass, 2018) and 25% of graduates are over-qualified in their jobs. (Urban, 2017)
This has caused about one in three U.K. graduates to end up being ‘mismatched’ to jobs that they found after leaving university. (Universities UK, 2015)
Persistently higher unemployment rates could create severe social, mental health, and economic problems among younger people.
Yet, employers are struggling to find workers with the right qualifications even though there is a high rate of unemployment for Millennials.
Forty-five percent of 39,195 employers in 43 countries say they can’t find the skills they need, up from 40% in 2017. It’s the highest in over a decade. (Manpower Group, 2018)
Without a doubt, there will be increasing skills-mismatch between what unemployed graduates don’t have and what employers really want from them.
Perhaps individuals need to share the blame for the skills gap. The choice of subjects in schools, colleges, and universities will become more important in the future of work.
So too will be the need for good career guidance because 72% say that students have failed to study in-demand fields (e.g., science, technology, engineering, and mathematics — called STEM). (American Staffing Association, 2017)
If you want to hear what American workers have to say about their jobs, go to Inside Jobs.
Whatever is causing this skills mismatch, there’s certainly no guarantee for a Millennial or Gen Z to secure a dream job after gaining a costly academic qualification.
With 44 million Americans owing over $1.48 trillion in student loan debt, 57% of Millennials in 2018 are burdened with debt when gaining their higher education, which has risen 130% since 2008. (NeighborWorks, 2018)
The average debt has also increased by 6% from 2017 (StudentLoanHero, 2018)
For some, these debts can linger on till retirement, which is not a good position to be in at that age. (Huffington Post, 2016)
Having large student loan debts can lead to lower job satisfaction. It can harm people’s physical and mental health. It can severely impact their finances and borrowing capability. (Independent, 2018)
With stagnant salary and wage growth over many years now, many Millennial borrowers will likely struggle to repay their student loan debts.
When their debt to income ratio becomes too high, it will be more difficult for them to secure a mortgage to buy their first homes. First home ownership becomes a big problem for many countries.
When incomes don’t grow, people stop saving money for their future. (The Atlantic, 2016)
The downward spiral has begun for many people.
A 2017 analysis by Brookings suggests that nearly 40% of borrowers may default on their student loans by 2023. When this occurs, their credit scores will be negatively impacted by many other adverse consequences in the future.
As people are likely to have a mental disorder when they have accumulated more debt, the impact of increasing student loan debt and loan defaults on the mental health of Millennials and Gen Zs should not be underestimated. (Royal College of Psychiatrists, 2018)
Here’s the good news.
For Millennials who are fortunate to find work or be employed, the 2016 Deloitte Millennial Survey found that 29% want to feel in control of their careers and have freedom over their life.
Most Millennials in full-time jobs feel that their education prepared them well, with 79% rating their schooling as ‘excellent’ or ‘good’. (Udemy, 2018) For these people, there may not be a skills-gap problem.
While some Millennials want 9-to-5 jobs, by choice, others just want to be freelancers or entrepreneurs.
The Freelancing in America 2018 study found that 42% of 18-to-34-year-olds now freelance, up from 38% in 2014. The American freelance workforce grew by 7% (53.0 million to 56.7 million) in the last five years while the non-freelance workforce just grew by 2% (from 103.0 million to 105.3 million).
This trend is also replicated in many countries. Perhaps this is a new way of work where the more short-term contracting jobs are replacing full-time employment.
Unfortunately, freelancers don’t qualify for any benefits, health coverage, social security, and retirement plans. They can’t receive loans from the bank without a way to prove they have a reliable monthly income and steady cash flow.
PayPal’s survey in 2017 showed that 58% of freelancers in four major countries in Southeast Asia have experienced not being paid for their work. Non-payment for work done is also common in other countries where freelancers operate.
Nearly 50% of freelancers and independent workers consistently report having problems receiving their payments within the agreed upon time. (Dunforce, 2016)
What’s interesting from the Freelancing in America 2018 study is that freelancers are more likely to find skill-related training more valuable to the work they do rather than having a college education. Ninety-three percent of freelancers with a four-year college degree said skills training was useful versus only 79% who said that their college education was useful to the work they do.
Again, this put to question the role of colleges and universities in equipping students and graduates with relevant job-ready skills and training to perform the work that is expected of them by employers.
Three out of four Americans (75%) say that one of the factors most responsible for the skills gap is schools and universities are failing to provide an adequate education for the 21st century. Ninety-three percent believe that high schools and colleges need to do more to develop employable graduates. (American Staffing Association, 2017)
The debate continues as to the actual role of schools, colleges, and universities in the 21st century. But many students will continue to be severely disadvantaged in the future for lack of employable, job-ready, future-ready skills. These skills are demanded by modern-day employers striving to survive in very competitive business environments.
Given these challenges, Millennials will fall into one of two groups.
The first group will comprise of those who cannot find work to earn an income either as an employee, a freelancer or even an entrepreneur or business owner. They are likely to be unemployed for longer periods with high levels of student loan debt, stress, and anxiety. This group may become bigger over time.
In the second group, we have those fortunate Millennials who have work to earn an income.
Unfortunately, graduates who end up in jobs that didn’t require a college degree are five times as likely to still be in such a position five years later. Ten years later, they will earn around $10,000 a year less than their counterparts who started early in jobs that required a college degree. (Burning Glass, 2018)
The right starting point will set a good foundation for the future.
Despite being employed, 64% of Millennials do not believe that they are fully prepared and have all the skills and knowledge they’ll need for Industry 4.0. (Deloitte, 2018) Industry 4.0 is a name given to the current trend of automation and data exchange in manufacturing technologies.
Therefore, it’s all about acquiring employable, job-ready, future-ready skills and training that are sustainable and cost-effective to meet current and future employers’ needs and requirements.
Gaining the relevant skills-related training is so vital for everyone. This will set them up for the future of work and for financial success and freedom in the future.
They are future-proofing themselves against rising unemployment and underemployment, mental illness, and student loan debt.
The key to success is for Millennials and Gen Zs to acquire timely in-demand skills that employers actually want now and into the future.
It’s not about doing something that they are passionate about at the beginning. This can come later after they have secured their first income stream.
There will be some predictions to be done as to what employers of the future want. This is possible with currently available information and tools.
In 2017, McKinsey estimated that between 400 million and 800 million of today’s jobs could be transformed through automation by 2030 with some job losses and some job gains.
How we respond now to these foreseeable changes and transformation will determine whether we have a secure income stream or not in the future.
Millennials and Gen Zs do not have to wait until automation reaches mass adoption and revolutionizes the workplace. They can proactively prepare in advance now to constantly stay ahead of these developments and transformations.
They do so by identifying and acquiring in-demand employable skills that will retain their relevance in a timely and cost-effective way.
In particular, the ultimate goal for Millennials and Gen Zs is to remain employable and be relevant in an environment of constant change.
With the increasing cost of higher education, they could upskill themselves by completing a number of Massive Open Online Courses (MOOCs). There are so many free MOOCS to choose from.
For now, there’s a strong focus on new technology skills areas — data science, artificial intelligence, Internet of Things, and robotics. These are the current hot-spots for recruitment.
While the jury is out as to whether employers are accepting MOOCS certification in lieu of college and university degrees, we must be able to showcase how we have applied our acquired skills to achieve tangible results for our employers.
In some industries like design and programming, employers will hire people not based on qualifications, but on the strength of their portfolio.
In industries such as medicine, doctors need medical degrees in order to start practicing. Without practice, they are not able to showcase their skills.
In August 2018, job-search site Glassdoor compiled a list of top employers who are expanding their talent options by no longer requiring job applicants to have a college degree. Companies like Google, Apple and IBM are all in this group.
IBM now looks at job candidates who have hands-on experience via a coding boot camp or an industry-related vocational class. (CNBC, 2018)
This trend will absolutely benefit more capable job seekers.
To accelerate your chance of earning an income or earning more income, here are some things you can do:
- Create your own personal webpage to showcase your skills, experience, testimonials, and portfolio.
- Write in LinkedIn. Medium, and Quora.
- Network with the right people. Follow them on Facebook, LinkedIn, Twitter. Communicate with them.
Regardless of whether you’re a professional with a college degree or without, we must stand out in today’s crowded job market. They must be able to show off their skills.
Meanwhile, Millennials have coined their own aspirational acronym — FIRE, which is Financially Independent Retiring Early. They consider their finances in nearly every decision they make, or maybe even make decisions solely based on money. But once they have reached their financial independence, they get their freedom not to be bossed around by what we earn or what we have saved.
So, to be on FIRE, they must do things creatively to secure that first income stream!
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