Four distinct generations of employees are currently at work in companies across America, all with very different attitudes, expectations, and management styles. Business owners and managers are challenged with learning how to maximize the potential in each age group, while encouraging them to work together to achieve common goals.
The oldest age group, those who are old enough to remember World War II, have been called the “Greatest Generation.” While most of them have retired, they still comprise about 6.5 percent of the workforce – some in higher management positions, some acting as consultants, and others in part-time positions that enable them to earn a few extra dollars to supplement retirement income.
For the purposes of this article, we will consider the three younger generations that constitute the bulk of the workforce. The Baby Boomers, born between 1946 and 1964, represent about 41 percent of the workforce. The oldest boomers are now reaching retirement age. Although Generation X starts in 1965, human resources experts place the ending birth date for this generation anywhere from 1977 to 1980. Gen Xers, as they are called, represent about 29 percent of the working population. The youngest group, those born anywhere from 1981 to 2001, are called Generation Y. They comprise about 22 percent of the workforce.
A Changing Workplace
Two converging trends are transforming the American workplace, according to Doug Beckley, CEO of The Beckley Group, a management consulting and business training company based in Las Vegas. “Demographics are changing the workforce, as boomers approach retirement age and younger cadres move into the workforce,” he noted. In the United States today, between 8,000 and 10,000 Baby Boomers turn 60 every day, and they are being replaced by younger people who will create profound changes in what the employment pool will look like in the future. “Gen Y will constitute 45 percent of the workforce in a few years,” said Bob Daniel, owner of PrideStaff Las Vegas, an independent franchise of the national PrideStaff network. “They are entrepreneurial and very tech-savvy. They value 24/7 communication, and 30 percent of them are non-white.”
The other trend is that the workplace itself is changing. Companies no longer expect people to stay with them for 40 years and enjoy a company-paid retirement plan. So-called “job-hopping” from one employer to another, which used to be seen as a negative, has now become the norm, especially among younger workers. In fact, staying at one job for a long period of time may now be seen as a sign that an employee lacks ambition.
In order to understand the perspective of each generation of employees, it is necessary to look at what the American workplace was like when its members first began their careers. Boomers started working in the 1970s, when people still believed that if they got a good education, worked hard, and were loyal, their employer would provide them with a job until retirement, and then take care of them with a pension plan. “Command-and-control leadership was the norm. [Boomers] didn’t make demands. They waited for their bosses to notice their hard work and reward them in due course,” reported Carolyn Martin of RainmakerThinking, Inc., which has published several books on the changing American workplace.
Gen Y is a generation of latchkey kids, whose parents were both working when they were growing up, leaving them to manage very much on their own. Martin pointed out that they were also the first generation to be told they would not be as well off financially as their parents. Because they grew up hearing news reports about government corruption and corporate scandals like Enron, “they understood from day one of their working lives that large institutions couldn’t be trusted to make good on long-term promises,” explained Martin. “So, for short-term sacrifices, they demanded immediate gratification. They remain the consummate free agents.”
Members of Gen Y grew up with technology, and in fact, they can’t remember a time before the Internet. Like their older siblings, they don’t expect to remain with one company for long, and they are also very entrepreneurial. “Although Baby Boomers were taught to win at all costs, they raised their children, the Gen Yers, to believe that competition is overstated,” said Daniel. “When Gen Yers were playing sports as children, everyone got a trophy for participation. This naturally shaped their thinking”
What Do They Want?
When hiring and retaining employees, the principal factors to be considered include compensation (both wages and benefits) and working conditions. In both these areas, there are vast differences between what the generations consider desirable.
As Beckley pointed out, “All employees want to be well compensated, but the difference is the type and structure of compensation they want. For example, health insurance is important to everyone, but it has a higher importance among boomers because of the reality that they need it more. It is less valued by Gen Y, because they are still at an age when people think they’re bulletproof.”
Because boomers come from the perspective of long-term employment, they are more likely to value some type of profit-sharing, or to ask a potential employer, “How many years do I have to work before I’m vested in the firm’s retirement plan?” On the other hand, members of Gen X and Gen Y don’t plan to remain with any one company very long, so they are more attracted to higher levels of short-term income.
Connie Johnson, managing director of Talent Framework, a human resources consulting firm based in Reno, noted some of the characteristics of each generation that recruiters can use to attract them. “While Baby Boomers want benefits such as insurance and retirement plans, they also value title, position and authority,” she said. “They feel they’ve earned the corner office. Gen Xers are used to being independent, and they value freedom and flexibility. Gen Y wants to have their dream job right now. They want to start at $40,000 to $50,000 a year, get plum assignments and meaningful work without having to wait in line or ‘pay their dues.’”
Employees of all ages appreciate flexible work hours and work-life balance, but boomers, because they were trained at an early age to put the company first, are much less likely to ask about work arrangements. “Boomers are more likely to put in the hours and grind out the work,” said Beckley. “Gen Xers crave flexibility in how and when they work. They may be able to get more done in less time by using technology to make themselves more efficient. If they complete their work at 3 p.m. because they are more efficient, they can’t see why they shouldn’t be able to go home early.”
In Daniel’s opinion, Gen Yers are not as concerned about wages and benefits as they are about the work environment and the social aspect of interacting with co-workers. He said, “They’re more likely to tell a potential employer, ‘I’d like to work for you, but I need to be off from 2 to 4 every Thursday.’ A boomer would never say that. If the employer won’t give them the time off, they’ll find another company that will. They value flexibility in work hours, including working from home, and they want to know upfront about vacations. Those things are more important than a benefit program they might never use.” Generation Y is also socially conscious, and its members value jobs that will have an impact on their community or on causes such as global warming or saving endangered species.
Managing the Generations
In order to be effective, a manager must understand how the generations are different, and how to compensate for their weaknesses and make the best use of their strengths. “For boomers, the most important things are loyalty, work ethic, commitment and self-reliance,” said Beckley. “Gen X and Gen Y value creativity and personal gratification. They like challenges, they like to be flexible, and they like to use technology to be faster and more efficient. The differences between older and younger workers can create a recipe for tension and potential conflict.”
“Boomers believe in order – there’s a process for everything. They like a very structured environment,” said Daniel. “When they were growing up, they were taught that you got an honest day’s pay for an honest day’s work. If a manager tells you to do something, you don’t ask why, you just do it.” Johnson noted that many boomers are workaholics. “They’ll brag about working 10 or 12 hours a day, which younger employees can’t understand,” she said. “Young people are likely to think that working long hours is a sign you’re not getting your work done quickly enough.”
Independent-minded Gen Xers are often concerned with building up marketable skills and experience that will make them valuable contributors to any workplace, according to Martin. She advised managers to tune in to their obsession with training. “Although they don’t plan to stay with your company for more than a few years, by offering good training programs and flexible work arrangements, you may be able to hook Xers into a long-term employment relationship,” she said.
“Gen Y values fairness above all,” said Daniel. “They don’t subscribe to the idea that ‘He who has the gold makes the rules,’ and they don’t believe in doing what the boss says just because he’s the boss. They are achievement-oriented and they absolutely love a challenge. They have seen the success of all the young people who have become rich by forming their own companies, and many of them believe they’ll be millionaires by the time they’re 35. One of their great strengths is that they are able to think outside the box.”
Creating teams of mixed generations in which everyone contributes can help people of different ages learn to work together, said Johnson, who encourages managers to “create a reciprocal learning and teaching environment” that includes mentoring and reverse mentoring. “Younger workers love being seen as having unique expertise,” she said. “For example, if we are trying to recruit employees, a younger worker may show us how to use Facebook or other online services instead of the traditional means of recruiting. Boomers have what we might call ‘tribal knowledge’ about the company. They know what’s been done in the past and why systems were set up a particular way. They know the company history and the long-time relationships with established clients, and they can pass on this valuable information to younger workers.”
Creating workplace teams can be difficult for managers dealing with employees who have different concepts of the value of teamwork. “Boomers believe there’s no such thing as a team. Everybody is out for themselves,” said Daniel. Because Gen Xers are so independent and goal-oriented, they often prefer to work on their own. In addition, according to Johnson, “Gen Xers are direct and frank. They have not learned tact and diplomacy,” which can create problems working closely with others. In contrast, experts say Gen Yers prefer to work together. “Gen Yers don’t want to leave anyone behind,” noted Daniel. “They appreciate a team-oriented environment.”
Once managers understand the differences between the generations of workers, they need to promote tolerance and communication, and facilitate an environment where they can all work together, according to Beckley. “A good manager makes sure the groups understand each other,” he said. “Get them to talk with each other and share experiences. Encourage communication and understanding. Put it on the agenda of a staff meeting if you have to – it’s that important. Lack of communication can lead to misunderstanding and conflict.”
Customized Coaching Styles
An important part of managing employees is mentoring them, in order to transmit knowledge and also to groom them for advancement within the company. Not surprisingly, the different generations see coaching or mentoring from different perspectives. “Boomers and Generation X don’t want to be coached,” said Daniel. “They may see attempts to supervise them as micro-management.” However, Gen Xers do see the value of training, since gaining skills can add to their “toolbox.” Gen Yers appreciate coaching and mentoring, according to Daniel. “Remember, this is the Nintendo generation,” he said. “Because video games reinforce success with constant rewards, they are used to getting immediate feedback. They want to be measured constantly and get real-time feedback, not annual reviews.”
Training Tomorrow’s Leaders
Corporations used to expect employees to start at the bottom of the corporate structure and move into positions of authority over the years. This system of long-term employment provided a way for people to receive on-the-job training in management and leadership so they were prepared to assume higher-level positions when an opening occurred. In today’s workplace, the average worker changes jobs several times in his lifetime, and may even move from one industry to another one that is totally different. This presents a real problem for management concerned about succession planning.
“Managers must groom and cross-train younger employees to move up to the next level of management, so they will be ready to fill the future needs of the company,” said Beckley. “This is not being done to the extent it should be. We’re not taking the time to think long-term, and that presents a real concern. It’s a big project many managers never find the time to do, especially in public companies where they need to produce results for shareholders each quarter.”
Johnson added, “Very large companies have structured leadership programs, career ladders and formalized mentoring, but small to medium-sized companies don’t have these resources. Many of them may not be cross-training their employees.” She noted that when people job-hop from company to company, they don’t get the experience of following through on long-term projects, from its planning phase, through implementation, to assess its impact on the company and decide what could have been done better. “Frequent job changes give you less chance to see the big picture,” she noted. Johnson also pointed out that, while younger employees are concerned with building a “toolbox of skills” they can take from one employer to the next, they often lack people skills, which are honed from years of face-to-face contact with others in challenging situations.
Beckley advised managers, “Planning is a critical element in success, and your long-term strategy should include succession planning. One way to ensure you will have enough future leaders is to create a workplace that contradicts the notion that long-term retention is impossible. You need to create an environment where people feel and act like they’re partners in the business.”