Generations at Work: Implications for Finding, Retaining and Managing Talent

Diane PiktialisResearch Working Group Leader and

Program Director

June 2, 2008

Diane.Piktialis@conference-board.org

www.conference-board.org

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Topics

Changing labor force demographics and composition by generation

Implications and challenges for talent management

Part I.Who are the Generations at Work?

www.conference-board.org

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12

15

8

21

52

30

-10

Total, All Groups

16 to 24

25 to 34

35 to 44

45 to 54

55 to 64

65 & older

Aging U.S. workforce will thin current pipeline

Source: Occupational Outlook Quarterly, Winter 2001-2002, Bureau of Labor Statistics

Changing Demographics: “What’s the big deal?”

% change 2000 - 2010Median Age of US

worker in 2000 was 39.

In 2010, it will be 41.

First time in 25 years that youngest

workforce grew more than overall

35-44 year old cohort to shrink 10%

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Ratio of Retirement-Age to Working-Age Male Population

43

44

57

41

63

54

45

37

23

24

34

21

30

30

26

20

Australia

Denmark

France

Japan

Netherlands

Spain

U.K.

U.S. 2030 forecast 2000

For every 100 men of working age, the number of retirement age men will nearly double in 30 years in many countries

Aging is Global

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Small “edge” in talent can give big organizational advantage

“In the news” and personal experience with changing demographics resonate with senior leaders as to why need to improve: Recruitment Selection Performance Management, and Retention Policies

Why Should Employers Care?

The Conference Board CEO Challenge: In 2008 talent shortages emerge as #1 concern

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Boomers Are Ready for Nonprofits, But Are Nonprofits Ready for Them? (2007)

Key Messages:

Baby boomer retirements could cause serious talent shortages

“Brain drain” of critical skills and competencies and long-term relationships cultivated with funders when senior execs leave organization

The good news: nonprofits can turn this approaching crisis into a strategic opportunity by tapping into a new source of talent--

Boomers thinking of retiring…but may actually work beyond “retirement”

Boomers showing strong interest in nonprofit sector jobs

But critical challenges lie ahead

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Crunching the Numbers: Impact on Nonprofit Sector

Shortages in healthcare, education, and social services(U.S. Dept. Health & Human Services 2004, National Association of Social Workers 2006)

Occupational shortages: nurses, social workers, geriatric workers (Rosen 2005, Arehart-Treichel 2006)

Leadership shortages--current and predicted (Bridgespan 2006)

Numerous surveys (2001-2006) indicate planned departures of nonprofit executive directors over next 5 yrs. (CompassPoint

Nonprofit Services 2001, Hinden & Hull 2002, Annie E. Casey Foundation 2003, 2004; CPNS & The Meyer Foundation 2006)

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The Four Generations at Work

Generation Years born Ages today

Veteran or Traditionalists 1927 - 1945 63 - 81 years old

Baby Boomers 1946 - 1964 44 - 62 years old

Generation X 1965 - 1980 28 - 43 years old

Generation Y or Millennial 1981 - 2000 8 - 27 years old

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The Gist of Generations

Members of a generation share a common time in history.

This commonality creates generation specific attitudes, values, preferences, and behaviors.

Differences between generations can affect interpersonal and team dynamics and affect nearly every aspect of talent management

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Caveats

Generalizations about generations highlight trends

There are many differences within a generation and

many similarities between generations

Generational definitions largely US centric, though

some relevance to Europe, Canada, Australia

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Generations: Who's Who* Matures or Veterans (born 1925-1945).

Veterans reflect what we refer to as “American values.” They are loyal and have respect for authority. Prefer “command and control” leadership and will make sacrifices for getting the job done. If you look at the organizations controlled by people in this age range, you will see how powerful the members of this generation are. Also called Silents.

Early Boomers (born 1946-1954).

These were the children born following World War II. There was a massive increase in the birth rate, known as the Baby Boom, which began shortly after the end of the war. They are very competitive and have faith in their ability to change things for the better. They are optimistic and idealistic but realize that loyalty is “dead.” They have much understanding of the history of the organization, enjoy leadership roles, are good team players and like to be recognized for their wisdom.

Late Boomers (born 1955-1963). This is the second half of the Baby Boom. Social scientists are beginning to study this segment of the boomers to identify differences from the early Boomers.

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Generations: Who's Who*

Gen Xers (born 1964-1982).

The group identified as Gen X began when the birth rate decreased after the end of the Baby Boom. The term Generation X became widespread after the publication in 1991 of Douglas Coupland's book of the same name. Gen Xers have seen much failure in public and personal institutions and trust themselves rather than institutions. They tend to be skeptical and independent and want work life balance. They dislike rules, red tape, corporate politics and prefer “business casual.

Gen Yers (born 1983 -

Very techno-savvy, value diversity and have a global perspective. Want lots of feedback and ongoing communication very entrepreneurial and expect managers to help their professional development. Don’t expect to stay in one job or career for too long.

Sources: Center for Creative Leadership "Emerging Leaders" Research Study; Generations at Work, Zemke Raines and Philipczak (2000); When Generations Collide, Lancaster and Stillman (2002)

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The Multigenerational Workforce Today

29%

46%

10%15%

Matures

Baby Boomers

Gen-X

Gen-Y

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Generational Differences are Real

Their differences are more than simply age or life stage.

“They have to do with lifestyles and work

styles shaped by forces as disparate as

dust bowls and iPods.”

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Generational Differences at Work

Attitudes toward work

Work styles

Job satisfaction criteria

Career aspirations

Learning styles

Types of commitment

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Clashpoint: Dynamics of relationships

Is there a generation gap at your organization?

75% of workers age 55+ say they relate well to younger co-workers

Only 56% of younger employees relate well to older workers

Source: Ransdsat USA 2006

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Clashpoint: Intergenerational Conflict

40% of HR professionals are aware of intergenerational conflict

#1 – conflicts regarding acceptable work hours

#2 reason– believe other generations don’t respect them

Source: SHRM Generational Differences Survey 2004

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Intergenerational Conflict (cont.)

Most common areas of conflict Work ethics Organizational hierarchy Technology issues Dealing with change

Workers from large organizations much more likely to report intergenerational conflict

Source: SHRM Generational Differences Survey 2004

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Clashpoint: Communications

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In Their Own Words…

GEN Y Communication

“Generation Y is inevitably more technology oriented. The CEO of defense contractor Raytheon calls them “the thumb generation”

“They communicate differently. One PR woman I spoke with told me her daughter tried to quit her job via email.”

“Younger generations have no problem letting their superiors know when their work schedule may interfere with their social calendar.”

"Generation Y is much less likely to respond to the traditional command-and-control type of management still popular in much of today's workforce”

Part II.Bridging Generational Divides:Talent Management Challenges

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Talent Management Implications

Advancement and succession planning

Employee motivation, engagement, productivity

Management practices

Training and development

Career paths

Rewards and benefit designs

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Succession Planning and Advancement

Fewer younger employees want to move to positions of greater responsibility than in the past.

Only 43% of prime candidates want to move into a job of more responsibility

80% of these prime candidates for promotion would like to work fewer hours than they now do

Currently work-life balance most important to younger employees (under 35)

Aging baby boomers want flexibility to wind down or start something new

Sources: SHRM 2004, FWI National Study of the Changing Workforce 2002; (The Building Movement Project 2004, 2005

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Succession Planning and Advancement (con’t)

Cross-generational divides

Facilitating effective leadership transitions as younger

employees move up the ranks when

Younger leaders feeling undervalued and squeezed between

older leaders not leaving and even younger generation who

wants to advance quickly

Sources: The Building Movement Project 2004, 2005; Boomers Are Ready for Nonprofits but are Nonprofits Ready for Them, The Conference Board,2007.

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Career Aspirations

Veterans

• Build a legacy.

Baby Boomers • Build a stellar career.

GenX • Build a portable career.

GenY (Millennials) • Build sequential career.

From: When Generations Collide by Lynne Lancaster and David Stillman

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Generations and Knowledge Transfer

It takes two to tango.”

Good intergenerational communication will facilitate the transfer of critical knowledge

Interpersonal dynamics between expert and receiver can make or break the transfer and use of knowledge

The learning styles and motivations of the generation you want to receive and use knowledge key to success Last few decades have seen a shift in preferred learning styles

from verbal to visual to virtual approaches to learning“It hadn’t occurred to me that we need to focus on the people who will receive transferred knowledge. I realize now that I know absolutely nothing about how these younger employees communicate.”

-- head of knowledge management at US company

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Organizations are Unprepared

“ We have mature individuals at the top of our organization. If they were to leave, a lot of experience would be lost”

“(My) organization fails to recognize the enormous body of information residing with senior people….when they leave, it will be too late.”

Sources: ASTD/IBM Learning and Changing Workforce Demographics Study. 2006

The Conference Board, Grey Skies, Silver Linings, 2007

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How big is the risk to your organization?

Knowledge transfer issues were the highest rated challenge associated with changing workforce demographics (cited by almost 30%)

YET

Less than half of the organizations were specifically addressing knowledge transfer as part of their overall strategy

ARE YOU?

Sources: ASTD/IBM Learning and Changing Workforce Demographics Study. 2006; Boston University Center on Aging and Work, 21st Century Multigenerational Workforce

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Generations and Work-Life Navigation

Work-Life balance among most important factors in job satisfaction to younger employees of both sexes

Likely to increase as women continue to exceed men in professional education and management positions

Direct relationship to the desire to advance

A majority of older adults cite part-time work, flexible schedules as very important job characteristics

YET

Source: National study of the Changing Workforce, 2002, Generations and Gender, 2004, F&W Institute

Challenge: Dearth of flexible work practices in nonprofit sector

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The Generational Digital Divide: Work Styles

Digital Natives Digital Immigrants

Gen Y Matures, Boomers, Gen X

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A Typical Millennial

“As a generation on the go, they expect most things in life to be fast and convenient for them. They are the 24/7-generation, used to shopping online at 2 a.m., self-checkout, and quick service. While their grandparents grew up in the shadow of the depression and believed that patience was a virtue, this generation grew up in the information age where you never have to wait for anything.”

Source: First year attorney

Gen Y is a generation “on the go”

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Talent Management Challenges

Building human resources capacity in the sector

How do we motivate employees of different generations ?

How do we make sure every generation gets the training it needs to stay competitive?

How do we tailor rewards and benefits for people at each life stage and of different generations?

How do we maximize age diversity?

How do we leverage generational differences to benefit the organization?

Summary

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Generations and Organization Performance

Generational understanding is critical to success at the workplace

Employee Recruitment Employee satisfaction Trust Retention

Organization Engagement Trust Productivity/Effectiveness Collaboration and Teamwork Creativity and Innovation