How to close the post-pandemic pay gap
It’s a big week in our house: my husband is going back to work (as are the children in his class)....
This week we looked at FundCalibre’s most consistent managers of the 21st century – managers who’ve worked not only in the fund management industry over the past 20 years, but who have also run the same fund for the whole of those two decades.
In 2030, or even 2040, when we look back at the past decade or two, we’ll most likely be looking back at a group of millennial managers. The generation that reached adulthood in the early part of this millennium already comprises 35%* of the UK workforce. By next year they are set to account for 50%*.
But what employment characteristics might persuade millennials to stay in the same job for 20 years? As we reported recently, millennials have gained a reputation for job-hopping, with a “job for life” becoming a thing of the past…
“I’ve learned that you can’t have everything and do everything at the same time.”
— Oprah Winfrey
Communication is important in any relationship, whether it be friendship, marriage, or even with colleagues. Millennials tend to appreciate a more transparent communication policy than previous generations. They like regular, honest feedback and for junior staff to feel able to communicate openly with more senior staff. One way to think about this is those fund managers that engage regularly with the management of the companies they hold. Watch our interview with Jamie Jenkins on how BMO Responsible Global Equity engages with companies.
Previous generations hoped for roles with work-life balance – millennials expect it. They want options to control their hours, the chance to work home and yes, active, social schedules. When they invest they also look for flexibility – or a multi-asset fund. TB Wise Multi-Asset Growth is a good example, as the manager of the fund is allowed significant discretion and can invest up to 100% in equities.
Millennials have a strong degree of social consciousness, and nowadays 63%* expect their employers to contribute to a social cause. Work isn’t simply about a pay cheque: it’s about doing their bit for their communities and charities.
One example is those that offer workplace giving. Payroll giving is an easy, tax-effective way to give to charity – so it costs employees less to give more. Research also shows that working for a philanthropically-minded organisation aids staff retention and happiness.
Another option is to invest your pension in funds doing their bit for communities and indeed the planet, such as Pictet Global Environmental Opportunities fund, which invests in companies actively contributing to solving environmental challenges.
Again, work-life balance isn’t so much important as it is compulsory. In a recent survey, work-life balance ranked the second* highest priority when looking for a job (after salary) among millennials. After all, life is all about balance, right? It’s never been as true as when it comes to investing and creating a portfolio. Balance can often be considered diversification, or a core-satellite portfolio.
Everyone wants job security and it’s one of the top priorities for job-seeking millennials. A study found that 40%* think their job will be outsourced or replaced by automation within the next five years. Talk about anxiety. It’s no wonder millennials want lower-risk investment options. Bonds are deemed less risky than equities and usually provide a yield that is higher than the interest paid on cash accounts. Baillie Gifford Strategic Bond is worth a look in this space.
*Source: KPMG, Meet the Millennials 2017