Generational Change: Generational Differences in the Workplace
Understanding the difference between GenX, GenY and Baby Boomers - Hype or Risk?
Understanding the Problem
We have been bombarded with articles, speakers and conferences aiming to explain the problem of generational change. As a Baby Boomer I admit to having been pretty sceptical about this whole business. Aren't people all the same? Doesn't it just depend on the stage at which they are in their life:
0-17 learning, 18-30 taking opportunities, 31-44 consolidating, 45- 55 maximising and 55 reaping benefit?
But then I began to consider how much our time, our generational culture and the economic and technological environment coloured these phases of life. For example my life and career choices between 1979 and 1990 was heavily influenced by the industrial and educational policies of the Thatcher Government in the UK. So I finally decided I had to investigate the basis for all this hype to determine:
- Is there a serious corporate risk here and if so what exactly is it?
- What are the impacts and what are the real causes?
- What can employers and managers do to mitigate the problem?
We see clear evidence of a range of organisational performance impacts including rising staff turnover and falling recruitment, Baby Boomers retiring and knowledge leaving the building, a fall in school leavers and new recruits who are more demanding and selective about their work and workplaces or were before the GFC.
So let us first look at the facts.
What is a Baby Boomer?
A Baby Boomer is a person born between 1946 and 1964 in Australia, United Kingdom, Canada and the United States. After WW II, these countries experienced a spike in birth rates, known as the baby boom. The term is now used for that generation even in countries that did not have the 'boom'.
In Australia, 1950s migration brought many Boomers and significantly impacted demographics and political thinking. In 2006 there were 5.3 million Boomers in Australia (26% of the population). Boomers were in their formative years (teens and early twenties) in the 60s and 70s which made them radical thinkers, consumers and travellers. Baby Boomers spending habits and lifestyles therefore have a powerful influence on the economy. Over the next 16 years this huge generation will all sail past 60 and ease out of the workforce potentially leaving a very significant labour and management void.
However, in a US survey 76% of Baby Boomers said they intended to keep working and earning in retirement but will alternate periods of work and leisure. In developed countries, Baby Boomers are eating better and exercising more than ever to achieve a healthier lifestyle. 37% of those US Baby Boomers will continue to work for earnings, 67% seek continued mental stimulation and challenge. And this presents the challenge and the opportunity for employers managing an aging workforce.
What is a Gen X?
4.4 million Australians are in Generation X which is 21% of the population, born between 1965-1979. Surveys show two-thirds want to be thinner, 57 per cent live from week to week financially and 40 per cent worry about their families. They are sandwiched between the Baby Boomers who refuse to let go, and the younger, cooler more tech-savvy Gen Ys who are already snapping at their heels. They are ageing and feeling the pinch financially but also have a young family, which can be very stressful. And they are the mainstay of our present workforce, consolidating their position, worth and families, having grown beyond their opportunistic years.
What is a Gen Y?
There are 4.2 million Gen Ys making up 20% of Australian population, and born between 1980-1994. Greater sophistication is needed when engaging with Generation Y. We are dealing with the most formally educated generation ever. High school retention rates have risen and almost half of Gen Ys have gone to University and many of the rest studied at TAFE. So hype and superficiality don't persuade this educated generation.
Generation Y don't seek a job as much as they seek an opportunity. They have multiple expectations of an organisation - it isn't just the job description but the workplace culture, the variety, fun, training, management style, and flexibility that drives them. However, on-line psychometric testing of 300,000 respondents by Army Recruiting in the UK showed a clear distinction between Gen Y types:
- 'Leaders' looking for the opportunity to inspire
- 'Thinkers' seeking a way to make an intellectual difference
- 'Mates' searching for belonging and adventure
- 'Escapers' who are after a new start, money and action.
While these obviously suggest sub-sets of the kind of people to whom the Army might appeal, it does give the lie to the view that Gen Y is self-centred and entirely uninspired by traditional values. Generation Ys are inundated with job ads, though, so in this competitive labour market employers need to offer a compelling Employee Value Proposition. The Gen Y's want a clear reason to join an organisation - and one that resonates with their workplace priorities. A survey of UK firms adopting Green Policies showed that a significant motivator to do so was to appeal to Gen Y!
Australia, like most developed nations, is experiencing a rapid ageing of the population. The median age of an Australian in 1976 was 28.3 compared to 36.4 today and in a decade it will be 40.1. Nowhere are the implications more significant than in employment. An ageing population leads directly to an ageing workforce. Planning now to deal with this aging workforce is a key role of managers.
This year there will be more 60th birthdays than ever before. The point is that over the next 15 years this huge generation will all sail past 60 and ease out of the workforce creating a significant labour and management challenge. Now is the time to begin the succession planning in businesses of all sizes. Now is the time to consider if and how Baby Boomers beyond traditional retirement age can be of use in the workforce.
It has never been harder to attract, recruit and retain staff. Despite the GFC the unemployment rate is low and there are an increased number of options available today when it comes to Gen Ys choosing their future direction. There are more post-compulsory education options than ever for young people, opportunities to travel, to work overseas, or to retrain for yet another career. The statistics bear this out: those aged 20-24 are three times more likely to change jobs in a year than those aged 45-54. In fact nearly 1 in 4 of those aged 20-24 change jobs in any given year. In 1959 the Longitudinal Labour Market Study shows an average retention rate of 15 years. Today average retention per job per employee is just 4 years.
In practical terms, there is already near zero unemployment in Canberra and it is low in most parts of Australia. Many organisations are once more finding it difficult to retain good trained staff and few organisations have systems for retaining and recycling the knowledge that is leaving with the Baby Boomers. Similarly few organisations have structured mentoring systems to pass on knowledge in good times. Even when they do, the trained staff tend to move on before the investment in them is realised. More frequently young promising staff are being promoted early beyond their experience and either succeed and move on too soon, or fail and get stuck or leave. Only relatively few organisations provide coaching to help young managers grow into their roles.
What does all this tell me?
The generational change is a big issue but not necessarily the disaster it's made out to be. True, in Australia there are 1.2 million fewer Gen Ys than the Baby Boomers we are losing, but the change is staged over nearly twenty years and clearly manageable with the right planning and strategy. Given the right qualities of leadership, a willingness to review the special competencies of aging employees and a sound understanding of the way your organisation can manage knowledge and satisfy the needs and wants of your employees - there is not much to fear.
Article by Malcolm Anderson
Australian Bureau of Statistics
Management Today, (UK), Work 2.0 Survey
BRIG Andrew Jackson, Commander Army Recruiting, British Army
Employer of Choice report, Weekend Australian
American Association of Retired Persons (AARP)