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Generation Y will make its presence known in the workplace in the coming decade, forcing employers to balance the needs of three generations, each with unique talents and expectations. Management flexibility will be the key to successful hiring, promotion and retention.
"Most employers recognize the differences, but whether or not they act on it is another story," says Ray Baumruk, senior consultant for Hewitt Associates, a global management consulting firm. "The biggest mistake is not listening to employees."
Think of the workforce as a pie chart. By '10, the baby-boom generation (born '46-'64) will make up 38% of the workforce, down from 49% in '00. Boomers will be replaced by members of Generation X (born '65-'78), which will make up 32% of the workforce by decade's end, up from 20% in '00. The remaining 30% will be Generation Y (born '79 or later).
Each piece of the pie will add value to the workplace, but in vastly different ways. The trick is to figure out what makes each generation tick and to implement policies that make the most of the unique traits of each. Employers that don't do this risk losing valuable workers from each group.
At the same time, companies will have to manage fast growth at both ends of the age spectrum in the coming decade. According to the latest figures from the Bureau of Labor Statistics, the group of workers aged 16 to 24 will grow faster than the overall labor force for the first time in 25 years, reaching about 26 million in '10, up 3.3 million from '00. And there will be a tremendous surge in the number of workers approaching retirement. By '10, the ranks of workers aged 55 to 64 will swell to 26.6 million, up 8.5 million from '00.
The desires and needs of these youngest and oldest workers will require skillful juggling by employers. Each group's demands will have to be balanced against the other's and against those of workers in the middle, some 105 million aged 25 to 54.
Ann Fishman, president of Generational-Targeted Marketing Corp. in New Orleans, warns that tomorrow's workers aren't just a younger version of the baby boomers who dominate today's workforce. Young people come to the job market with different backgrounds and experiences that influence what attracts, motivates and retains them as workers. "You have to understand their mind set," she says. "Don't try to mold them."
Generational Work Traits
Generation Yers are generally optimistic and full of confidence. They grew up in economic boom years and are used to working and having cash. They are good team players and want to be part of a successful company, but they are wary of hype and spin, having grown up during the O.J. Simpson trial and the Monica Lewinsky scandal. Gen Yers will leave an employer if they think they've been misled. They want loyalty and will be loyal in return.
Having lived through divorces and bad economic times, Gen Xers tend to be more cynical than the generations that bookend them. But they are hardworking, self-reliant, entrepreneurial and willing to take risks. While those are all sought-after employee traits, they also point to an independence that can make Gen Xers difficult to retain. They'll quit without a second thought if they think they've learned all they can from you.
Generations X and Y will both come to work with high expectations and little patience, says Baumruk. They'll want to make an immediate impact, flat out rejecting the notion of "paying dues." It's an attitude that can easily cause friction because many boomers still adhere to the paying-dues philosophy and are dismayed when others don't. But skilled managers will tap the ambition of these younger workers, using it to the company's advantage rather than trying to stifle it to satisfy older employees.
Gens X and Y also expect a more casual and carefree workplace and a less hierarchical organizational structure. They want the freedom to work in remote sites, telecommuting rather than driving to the main office every day. In their early careers, boomers were willing to work 100 hours a week. Not so, Gens X and Y. Balancing work with play is a top priority. At the same time, they expect their work to have a broad impact. If they feel as though they're spinning their wheels, they'll bolt.
In terms of motivation, recognition awards—employee of the month and such—will be less effective for the younger generations than they were for the boomers. Gens X and Y would rather have time off, more training, access to key meetings and projects or a coveted conference or travel assignment.
Restructuring Benefits
In addition to reinventing management styles to accommodate the demands of the younger workforce, companies will have to reshuffle benefits packages, making sure there's something for every age group.
Younger workers will want benefits that are flexible and portable. They know they won't spend their entire careers with one employer, so they want a package they can take with them when they leave. That means 401(k)s rather than traditional pensions contingent on length of service and flexible health insurance options that can keep costs down for those who are relatively healthy and need few services.
More than ever before, young workers will want help paying off college debts. More firms will look for ways to restructure student loans. Some will even offer cash in lieu of a benefit, such as life insurance, to pay off college debts.
Older workers, on the other hand, will demand more help in preparing for retirement and ensuring that their nest eggs are safe. Many older workers will want to phase into retirement, working fewer hours, an idea that many employers will embrace since it allows key staff to stay on board and teach younger workers the ropes. Other key concerns for older workers include continued health care coverage, long-term-care insurance, elder care and estate planning.
Regardless of their age, most workers will want to structure work around family duties. That means not only child care or elder care, but also time to take care of personal business. Greater flexibility in schedules will be the rule, with fewer folks working strictly 9 to 5.
Researcher-Reporter: Michael J. Smith
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