Not long ago, the millennials (a.k.a. Generation Y) thought they had it made. As recently as 2009, the 92 million stars of Ron Alsop’s book The Trophy Kids Grow Up expected that the workplace would greet them with open arms. That year, corporate consultant Mike Kraus wrote of his dealings with one such employee, who had no prior experience in his position, but believed he should be a director and have his own office.

Just one year later, Bloomberg Businessweek documented the fall of these same young workers, dubbed variously the “Lost Generation,” the “Dead-End Kids” and so on, noting that the people suffering most from unemployment are young people who can’t grab onto the first rung of the career ladder.

Indeed, prospects for young workers are worse than ever. According to the U.S. Bureau of Labor Statistics, as of July 2011, 49 percent of 16- to 24-year-olds had jobs, down from 56 percent in 2008, and the lowest since the government started keeping count after World War II.

Struggling to find employment is painful for everyone. But what makes it even more painful is when you’ve been told how great you are all your life by “helicopter parents” who will do nearly anything to make sure your self-confidence is continually nurtured. Alsop wrote that millennials often received trophies when they excelled, and sometimes when they didn’t, to avoid damaging their self-esteem. Yet today, these same lavishly praised kids are either out of work or working at jobs below their educational level, competing with baby boomers who won’t retire, and moving back home just to make ends meet.

At the same time, the number of people engaged in computer or mathematical occupations is holding steady, at about 3.5 million between 2009 and 2010. If you find yourself managing one of them, and that person is a frustrated Generation Y’er in the IT field, how can you motivate him or her?

First, encourage your employee to connect with others in person and through social media. Gen Y’ers grew up with their parents keeping close tabs on them, and they expect to have their supervisors do the same. According to a 2007 survey by Yahoo HotJobs and Robert Half International, 60 percent want to communicate with their boss at least once a day. Additionally Gen Y’ers “use technology as their primary means of connecting to a much greater extent than any other generation,” according to brand consultancy Landor Associates. And a recent Accenture poll found that 61 percent of Gen Y’ers use social networking services even if they aren’t supported by their IT department.

Second, make sure your technology is leading edge, and let them have some room to experiment and innovate. The Accenture survey showed that 87 percent of Gen Y respondents decide where they’ll work based on their ability to use state-of-the-art technology and believe that IT rules and policies are meant only for guidance.

Third, don’t take them for granted, even if you think you have them over a barrel. Their sense of entitlement is deeply entrenched, for one thing. Alsop cited a CareerBuilder survey that showed that more than 85 percent of hiring managers and human resources executives feel that millennials have a stronger sense of entitlement than older workers. For another, they are more than willing to change jobs until they find something satisfying. Another poll from Michigan State University and MonsterTrak, which was cited in the book, said about two-thirds of this group expected that they would job surf until they found something more satisfying.

In the end, all of us want the same basic things from our jobs: to be able to pay our bills, find a sense of meaning and make social connections. The economy is cyclical and will recover. Now, when things are challenging, we have an opportunity to forge meaningful and lasting relationships with our employees. By investing in our employees’ emotional bank accounts, we can reverse the negative dynamics of entitlement, rule breaking and job surfing, and create the kind of win-win partnerships that bring both sides enduring value.

Andy Blumenthal  |  Contributing Writer

Andy Blumenthal is a division chief at the U.S. State Department. He was previously chief technology officer at the Bureau of Alcohol, Tobacco, Firearms and Explosives. A regular speaker and published author, Blumenthal blogs at User-Centric Enterprise Architecture and The Total CIO. These are his personal views and do not represent those of his agency.