In yesterday’s talk by Bea Fields on managing Gen Y, one of the listeners asked how much of a fun circus work would need to become in order to attract and retain younger workers. The well-known and much-criticized Gen Y tendency to job hop makes Gen Y retention a key issue for companies around the world. Here’s my Gen Y perspective on this issue: when work-life balance is important and career plans are chaotic, it just doesn’t pay to work at jobs that suck.

Why do people work at jobs that don’t make them happy? There seem to be three main reasons:

• They need the money or the health insurance.
• They don’t care about the sacrifices they have to make.
• They see it as a stepping-stone towards a bigger opportunity.

Let’s look at those three reasons from a Gen Y perspective.

Do they need the money or the health insurance?

Many Gen Yers still live at home, so they have less financial pressure. Others live on their own or with friends, but aren’t carrying mortgages or supporting families. True, many Gen Yers experience financial pressure from student loans, credit card debt and other obligations, but most can get by.

What about health care? We’re in the prime of our lives, and most don’t need to worry about losing insurance coverage. Life insurance and family insurance needs are low, because we typically don’t have any dependents. That means we can shift jobs without worrying about not being covered in the meantime.

Why else would people take jobs they weren’t happy in? They might not care about the other sacrifices they need to make, such as working long hours and living under high stress.

I know many Gen Yers who work overtime and weekends, but I also know many Gen Yers who prioritize work-life balance and who make time in their lives for other things. If their jobs don’t allow them to have the kind of life they want, they’ll look for other opportunities. They know that for every company that talks about company loyalty and retention but then turns around and expects an unsustainable pace of work, there are also companies that walk the walk and are really interested in improving workplace flexibility–not just for senior employees, but for everyone.

Why would people work so hard, anyway? The answer is related to the third reason why people stay in jobs that don’t make them happy. They see those jobs as stepping-stones to greater opportunities.

It used to be that you would “pay your dues” in a boring, thankless job, eventually rising in the ranks and gaining a cushy position. Not any more. After rampant downsizing (I mean, “right-sizing”, or “resource actions”, as IBM likes to call it), the failure of even supposedly rock-solid institutions (hello, Fannie Mae!), and the un-cushy-izing of formerly cushy positions such as partners in law firms (who are now subject to the threat of de-equitization) is it any wonder why many people–Gen Y, especially, as we’re making these entry-level decisions–no longer believe in long-term career planning and in paying your dues in a thankless position?

Lesson One in Daniel Pink‘s unconventional career guide The Adventures of Johnny Bunko is: “There is no plan.”

There is no plan. If there can be no neat plan from getting from point A to point B, if being the office gopher won’t get you to the corner office, if you can burn yourself out because of overtime and high stress but still be laid off because of unpredictable market conditions, then it makes sense to take a step back, invest in yourself, and do work that creates value and make you happy.

Gen Y knows this: your employer pays you, but you ultimately work for yourself. You are ultimately responsible for developing your own skills, finding your own opportunities, and making the life that you want.

Gen Y challenges for recruiting and retention, such puzzling issues for HR departments all over the world, are really just logical reactions to the realities of the marketplace. It makes sense to pick jobs and organizations where you can create value, learn, and enjoy working. It makes sense to contribute and learn as much as you can, then move before you get moved–whether it’s to another job in the organization, or to another organization entirely. It makes sense to make sure that there’s something in it for you.

Does that mean that Gen Yers are mercenary? No. In fact, money isn’t the biggest reason why Gen Yers leave organizations. Gen Yers are looking for opportunities to make a difference, to grow, to connect, and to work with people they admire. Dot-com-like perks like foosball tables are fun, but they don’t make up for opportunities to make a difference.

The organization that can quickly tap new Gen Yers’ passions and skills, move them into a position where they can contribute in a meaningful way, and help them build the social networks that will make them even more productive–that’s the kind of organization that will be able to easily recruit and retain Gen Y, because that’s the kind of organization that understands what matters.