Global Trend

Companies Rethink How Theyll Manage and Recruit the Multi-Generational Workforce

As the labor market tightens and skilled workers become scarce, companies are casting a wider net for employees. For the first time, they find themselves managing four generations of Americans in the workplace. The differences between these generations go beyond their age. Researchers have found that they also approach their jobs and supervisors differently, depending on their generation.

Here are some of the most crucial insights from the latest research:

Veterans, those among today’s workers who were born before 1946, tend to be loyal and comparatively risk-averse; having had their values and expectations shaped by the Great Depression, World War II, and the Post-War boom years.

Baby Boomers, who were born between 1946 and 1964, tend to be self-centered, but they give their careers a higher priority than their personal lives.

Generation Xers, who were born between 1965 and 1980, are more willing than Veterans to confront authority figures such as their bosses, and they tend to give their personal lives a higher priority than do Boomers.

Millennials, who were born after 1980, are more idealistic than Gen-Xers, and place less importance on work than Boomers. They don’t want to work as hard as their parents, but they are eager to make a positive impact on the world.

While the Veterans grew up with radio, the Baby Boomers were the first generation to grow up with television. The Xers grew up with hundreds of cable TV channels and a VCR. And Millennials were raised in a world in which they take for granted such technologies as the World Wide Web, e-mail, instant messaging, cell phones, and satellite TV.

Today, despite increased automation, we have an unemployment rate of just 5 percent, and we can only expect this to go lower. As the Baby Boomers begin to retire, there aren’t enough workers from the Millennial and Xer generations to take their places. At the same time, immigration of high-end professionals is declining as fewer foreign students are applying to American universities. So the traditional 25- to 65-year-old labor pool is shrinking rapidly. As a result, according to projections by the Bureau of Labor Statistics, the percentage of workers older than 55 will nearly double between 2000 and 2015.

When the members of different generations interact, the potential for misunderstandings is huge. For example, Gen-Xers are more focused on learning the skills they need to advance in their careers compared to their parents, who measured their success by pay raises and promotions. According to an Associated Press story, that led to confusion at Express Personnel, a franchised staffing service.

Franchise owners Steve and Judy Scully couldn’t comprehend why their turnover was so high among their Gen-X employees. The Scullys’ immediate suspicion was that the young employees didn’t like the hard work, or that they wanted higher pay. After all, as Boomers, the Scullys believed in working long hours and getting the highest possible salary for their efforts.

Those weren’t the motivations for the Xers, however, as the Scullys discovered inadvertently. As soon as they began offering training programs that gave employees the opportunity to further their education while working, the younger employees stayed with the company.

Because many members of Generation X place a lower priority on work than they do on their families, it’s easy to assume that they are not hard workers. But research shows that isn’t the case. In 2002, Gen-Xers worked even more hours, paid and unpaid, than employees of the same age worked in 1977, the AP reports.

The study was performed by the Families and Work Institute at eight major corporations, including Texas Instruments. Because Gen-Xers refuse to put work ahead of their personal lives, the study concluded that the young employees are happier with their jobs, more satisfied with their personal lives, and mentally healthier than Boomer workers.

By acting on insights like these, today’s companies can attract, motivate, and keep the best employees of each generation. Here are four forecasts that predict how the most successful companies will turn this trend to their advantage:

First, it will be even more important than in the past to offer continuous education programs for employees. This is especially crucial for recruiting, motivating, and retaining Xers. They value the opportunity to acquire the job skills they will need for the future at least as much as the rewards they can earn in the jobs they do today. Moreover, it will also be necessary for aging Boomers and Veterans to continuously upgrade their skills at a time when technologies, markets, and customer demands are changing so quickly.

Second, Boomers will increasingly plan to work past the traditional retirement age. As we will discuss this month in Trend #7, nearly 80 percent of Boomers plan to keep working after they turn 65, according to the Merrill Lynch New Retirement Survey. For America’s corporations, the presence of millions of silver-haired veterans provides the opportunity to achieve a golden age, with unprecedented levels of productivity, efficiency, and innovation. Until now, companies have lost vast sums of their intellectual capital each year, as retiring workers took their knowledge and experience into retirement with them. The challenge will be to give these Boomers incentives to stay, rather than pursuing a second career elsewhere.

Third, businesses will experiment to find ways to leverage the skills and expertise of their different generations of employees. We expect to see the formation of “cross-generational” teams to brainstorm new product ideas, solve problems, and create new marketing approaches. These teams can draw on the experience of the Boomers and Veterans, and the familiarity that the Xers and Millennials have with newer technologies. Also, members of each generation are uniquely qualified to offer input into the products and marketing messages that will appeal to their peers.

Fourth, companies will increasingly refocus diversity training on differences and similarities between the generations, rather than between genders and ethnic groups. The lingering presence of the Boomers and Veterans in jobs that would have been turned over to younger workers in the past could lead to resentment, particularly among Xers who aren’t hesitant to challenge authority. Similarly, the more directive style of Veterans may clash with the consensus-driven decision-making style preferred by Millennials. Through training that teaches the members of each generation to understand the motivations of the other generations, many of these conflicts can be avoided and channeled into productive conversations.

January 2006 Trends Resource List :

1. ASSOCIATED PRESS, November 2, 2005, “From Boomers to Gen X, Age Becoming Major Factor in Workplace,” by April Wortham. ⓒ Copyright 2005 by The Associated Press. All rights reserved.
2. ibid.
3. To access Merrill Lynchs “New RetirementSurvey,” visit their website at: www.ml.com/index.asp?id=7695_7696_8149_46028_46502_46635