Millennials are the first value-driven generation. The pandemic, far from shattering this illusion, has solidified millennials’ value-driven approach to work and investing.
Working hard, the millennial way
News of an ex-banker joining a fresh fintech start-up or a consultant going freelance is not rare. Prior to the pandemic, big banks, accounting firms, and law firms, who traditionally offer high-paying jobs, were already struggling to attract young talent. Their streamlined productive processes and hierarchies to control bloated corporations make for roles that pale in comparison to an exciting role at an expanding start up with a social mission attached.
Now though, the pandemic has forced even the most restrictive corporations to figure out how to work remotely. This has offered employees a chance to explore the advantages of working from home, try out more flexible working hours, and even up and move out of the city.
For millennials this flexibility is here to stay, not least because decisions to buy a house or a new pet are fairly permanent. Some 50% of under-35s do not want to work in the office full-time. What’s more, the trend in moving out of corporate jobs is likely to accelerate. Surveys have found a similar proportion suggest they would even quit if their employer tries to make them return to the office full-time.
This attitude marks a shift away from the culture of “live to work” which has pervaded previous generations and has in the past led millennials being labelled as the lazy generation. However, the new reality of remote working has allowed millennials to live out a more balanced life and, labels aside, for employers to retain young talent, they will need to accommodate these new expectations.
A new dimension to SRI
By generating new demands on employers to offer a more flexible working life, the pandemic has shed light on a new dimension to socially responsible investing. Now, investors may want to consider a company’s approach to the new normal as a factor in determining which companies meet SRI standards. For example, a company’s policy on working from home or mandating holiday could indicate how seriously it is taking the wellbeing of its employees.
Beyond SRI, investment strategies could benefit from taking a company’s work practices into account. Companies are successful because of their employees. We have seen the shifting demands of the working population, among which millennials now make up the greatest proportion. The successful companies of the future will then need to meet these demands.
SRI stays on top
The pandemic was the first time most millennials would have had investments at stake during a crisis. It disproportionately affected younger workers, with many losing jobs or being furloughed. In these conditions, investors of all experience levels take a cautious and balanced approach. It might come as a surprise then that, for millennials, SRI remained a top priority.
An MSCI study in 2018 found that 90% of US millennials wanted their investments to be in line with their ethical values. Investment platform Nutmeg found this commitment to SRI was not lost to the crisis. Its survey found that a quarter of 25-34 year–olds said that they are much more likely to seek out SRIs since the pandemic began.
For millennials, the pandemic has only reaffirmed the need for SRI. Often compared in scale to the climate crisis, the mammoth impact of this pandemic has exposed the vulnerabilities within our economies. Many of these vulnerabilities have been found in traditionally safer assets such as equities in energy companies or commodities. Why invest in an asset that you don’t see as part of a plausible future?
So much for snowflakes
The pandemic has revealed an important truth about millennials then. They are not the snowflakes or spoilt brats they are so often called. Instead, this is a generation with strict principles that they will and have stood by even in challenging conditions. Millennials do not view SRI or working for a brand-new start up as high-risk. They see these as necessary decisions that work towards building a future world they want to live and work in.
Tancredi Cordero, CEO of Kuros Associates
