The Definitive Guide to Business

How one company keeps its millennial employees from quitting

FreshBooks employees participate in the company’s blind date project.
Source: FreshBooks

Keeping millennials happy and committed to their work often eludes even the best managers.

But cloud-based accounting company FreshBooks, located in Toronto, Canada, seems to be getting closer to cracking the code.

Of its 260 employees, 74 percent are millennials, which the company defines as those born after 1981. Of particular note, the customer service team is primarily made up of millennials and has a 93 percent retention rate. And this year, FreshBooks was ranked as the best medium-sized company to work for in Canada by the Great Place to Work Institute Canada.

What's the secret to not only keeping millennials happy, but doing so in the traditionally uncool field of accounting? It starts with your messaging.

Mike McDerment, Co-founder and CEO of FreshBooks.
Photo: Emily Munro

"We are not really an accounting company — we are a software company," says FreshBooks co-founder and CEO Mike McDerment. "What excites the workforce is being part of a high-growth technology company."

Further, the technology that FreshBooks is building improves the lives of self-employed people, and the company works to make sure the team understands that.

Every new hire spends the first month working in customer service. That experience makes it clear how much the software helps small-business owners sort out their invoicing, thereby leaving them more time to chase their dreams.

That is, after all, how McDerment got the idea to start FreshBooks. He was running a four-person design agency, and in the middle of a busy afternoon in 2003, he saved over a Microsoft Word document invoice he had been using.

It maddened him. So he spent the next two weeks building what would eventually become the FreshBooks product. He went on to live in his parents' basement for more than three years to get the business off the ground.

Unlike prior generations ... these folks are operating on another order of intrinsic motivation. They need to know the why. And they have a sense of purpose in the work they do.
Mike McDerment
co-founder and CEO, FreshBooks

Putting new hires in direct communication with customers helps crystallize how FreshBooks helps real people. Millennials "really want to know, 'Am I making a difference here?'" says McDerment.

If they don't feel a larger sense of purpose, millennials can be eager to leave one job for another. According to the 2016 Millennial Survey from Deloitte, one in four millennials would gladly quit their job in the next year, 44 percent expect to leave in the next two years, and by 2020, two-thirds of millennial employees expect to be working someplace else.

But part of why millennial employees at FreshBooks stay put is their understanding of and connection to the company's purpose.

"Having a mission to reshape the world to meet the needs of self-employed professionals is something that gets that generation up out of bed in the morning," says McDerment. "Unlike prior generations ... these folks are operating on another order of intrinsic motivation. They need to know the why. And they have a sense of purpose in the work they do."

In addition to plugging employees directly into the larger purpose of the company, FreshBooks has several programs that give employees opportunities to learn and grow professionally.

FreshBooks' PORCHFEST cottage retreat this summer.
Source: FreshBooks

For example, FreshBooks offers Lunch & Learns where an employee teaches a group a skill or task, and a "blind date" program that matches up employees who likely haven't met before to have coffee and get to know each other.

Additionally, the human resources team produces a podcast called FreshCast, where employees talk about their professional journey and what they have learned.

And every summer the entire team goes on a weekend retreat called PORCHFEST, an acronym for the company's core values: Passion, Ownership, Results, Change, Honesty, Fun, Empathy, Striving, and Trust.

When employees know each other beyond email and awkward bathroom run-ins, McDerment says business gets done faster.

"It's my belief that things move faster in an environment of trust, and part of the way to promote that is to effectively have better relationships with more people," says McDerment.

"Those small investments — an hour here, an hour there — actually speed up the pace of the whole business."