Much has been written of late about the generation coming of age and entering the workforce today. Known most commonly as The Millennial Generation, but often referred to as Generation Y, this group born roughly between 1980 and 2000 has caused quite the stir in the business world and beyond. As such, it has not been uncommon for conversations revolving around generational differences to quickly devolve into generational finger-pointing.
The financial crisis of 2008 profoundly distorted work patterns across generations. Many early Boomers were forced to delay retirement to compensate for diminished savings while career advancement slowed to a crawl for Generation X. All the while opportunities for Millennials have been few and far between leaving unemployment among this age group at historic levels. Recently, as the slow economic recovery has gained steam, dips in the labor participation rate have begun to accelerate signaling a deluge of pent up retirements that will pose a major challenge to business and talent continuity, particularly for large companies in the coming years.
In an effort to push a more constructive dialogue about the implications of one generation's exit from and a new generation’s ascendance into the workplace, we are going to examine a brief history of generational theory, compare and contrast Millennials with other living generations, and offer some basic advice on how to construct and maintain a harmonious intergenerational workplace.
The Silver Tsunami
In the years following the Second World War, there was a marked increase in birthrates across Europe and North America as GIs returned from battle and settled into domestic life. Through their sheer size, the generation born out of those circumstances – The Baby Boomers – have asserted their dominance across the globe in every aspect of life from arts & entertainment to politics and religion.
As of 2011, studies estimate that every 65 seconds a Baby Boomer will reach retirement age. And so it goes, this generation will assert itself once more as companies around the world experience a brain drain for which they are not prepared. What once was a “baby boom” has now morphed into a “silver tsunami.”
Generation X, born roughly between the years of 1960 and 1980 could easily be described as the “Baby Bust Generation.” Slightly larger than half of the preceding generation and eager to take the reins of government and business, Gen X was never large enough to leapfrog the Baby Boomers and will be insufficient in size to replace them as they retire en masse over the next 10 years.
The Millennial Generation, born roughly between the years of 1980 and 2000 and surpassing the Baby Boomers as the largest living generation, is poised to become the majority of the workforce in 2020 and a recent publication out of Kenan-Flagler Business School makes the implications of these demographic changes crystal clear:
"This turnover will mean knowledge and productivity loss, higher recruitment and training costs, not to mention the leadership gaps that will be created by exiting Baby Boomers. There are simply not enough Gen Xers in the workplace to fill the leadership gaps that will occur, and employers must prepare Millennials now to help fill those gaps."
Over the last decade, Millennials have trickled into the workplace and like their Boomer parents have asserted themselves as a new kind of generation with a different set of values and priorities. How effectively businesses harness the strengths and address the weaknesses of this generation will determine what level of success they experience over the next decade and beyond, but first it is important that they understand what sets Millennials apart from their predecessors and more importantly what they share in common.
What is a generation?
A generation, as referred to in this piece, is a group of people born in a given period of time, roughly 20 years, who share similar cultural experiences and life circumstances. William Strauss and Neil Howe are the leading voices in generational theory having authored several groundbreaking publications over the last 30 years regarding generational cycles around the world. Through years of research, Strauss and Howe discovered generational patterns in a multitude of developed countries. Generally speaking, these patterns consist of four distinct recurring generational types, each with a unique set of characteristics that help shape the next generations, continually fueling the cycle.
Kids these days
While there is debate among scholars as to when exactly the transition from Generation X to the Millennial Generation happened, experts do agree that Millennials came on the scene sometime between 1978 and 1982, continuing through the late 1990s. As noted by Strauss and Howe, their arrival swept in a new way of looking at parenting and children’s place in society:
"As abortion and divorce rates ebbed, the popular culture began stigmatizing hands-off parenting styles and recasting babies as special. Child abuse and child safety became hot topics through the 1980’s, while books preaching virtues and values became bestsellers. By the mid-90’s, politicians were defining adult issues (from tax cuts to internet access) in terms of their effects on children. Hollywood replaced cinematic child devils with adorable children who made adults better people. Educators spoke of standards, learning, and No Child Left Behind. Millennials have become a generation of improving trends, with consistent decreases in high-risk behaviors. Rates of tobacco and alcohol use, violent crime, pregnancy, and suicide are all way down among today’s teens and young adults, while SAT and ACT scores have been rising."
Raised in a protective environment, Millennials grew up during a time of great technological advancement as well as global and economic turmoil. As such, they share a clearly identifiable set of characteristics that often leave those who came before them scratching their heads. Tech-savvy and optimistic, Millennials – the most educated generation in the history of the world – are often described as entitled, lazy, coddled, and impatient. This harsh critique is nothing new; since time immemorial, older generations, disoriented by a swift evolution in basic values, have come down hard on those who follow them into adulthood. It wasn’t so long ago that Generation X was characterized almost exclusively as cynical and intellectually stunted. As Wired Magazine noted in a recent issue:
"Then something funny happened. Gen X punditry died—very suddenly. Check the data. If you plug “Generation X” into Google’s Ngram search engine—which tracks the occurrence of words and phrases in books—you find that the term exploded in use around 1989, climbing steeply throughout the ’90s. But in 2000 it peaked and began declining just as rapidly. You see a similar pattern in major newspapers, where the term boomed to more than 2,000 in 1995, then declined to just over 800 last year. It’s been years since I’ve heard it used as an insult. Only one thing has changed. Generation X stopped being young."
As the youngest Millennials reach adulthood in the next few years and as the world becomes more accustomed to this generation’s disposition, discourse is likely to shift away from criticism of Millennials and toward an exploration of the dynamics shaping the yet-to-be-named generation that will follow them. Still, companies that make sense of the distinctions between generational cohorts will reap the rewards in the years ahead as a disproportionately large group of aging workers finally take the plunge into retirement.
A Closer Look
Over the last decade, hundreds of studies and surveys have been conducted to paint a clearer picture of the Millennial Generation and to better understand what makes them tick. Deemed digital natives for having grown up in a post-Cold War culture of rapidly advancing technology and globalization, this group of young people is noted for their self-confident, collaborative, and multi-tasking approach to both work and recreation. Often considered weaknesses, particularly in the workplace, this group is also known for its strong tendency toward social interaction, distaste for hierarchy, and an insatiable desire for instant gratification.
Diving deeper into the Millennial profile, researchers have uncovered troubling statistics that should give business and HR leaders pause as they plan for changes in their companies. For Millennials, work is not only about income but about personal enrichment and fulfillment. A study conducted by Mercer found top workplace priorities for this cohort included flexible scheduling, making a difference, and opportunities for professional development. Unlike their Gen X and Boomer counterparts, Millennials place an emphasis not on structure and job security, but employability and flexibility. Older generations are sympathetic to this perspective - 41% of the public recognizes that this generation has had a tougher go at finding long-term employment than older generations.
Having coming of age during and shortly after the global financial crisis of 2008, and with a disproportionately high unemployment/underemployment rate among recent college grads, 49% of young adults have taken a job they didn’t want in order to pay bills. Another 25% have taken an unpaid job in order to gain experience. In total 70% of young adults surveyed plan to leave their current jobs once the economy improves sufficiently.
With 60% of Millennials leaving their companies within three years, the cost of replacement can range from $15k to $25k per individual once advertising, interviewing, on-boarding, and training & development are taken into account. Perhaps more troublesome is the fact that 46% of Millennials believe they lack the education or training to get ahead in their jobs or careers.
Taken together, the implications of these findings are grim. With a retirement boom on the horizon, the last thing companies can afford is to continually replace talent at the other end of the age spectrum.
Last year the US Chamber of Commerce issued a wide-ranging report about The Millennial Generation and their effect on society both inside and outside of the workplace. One of the key findings in that report included the underemphasized similarities between Millennials and their immediate predecessors, Generation X.
Echoing the findings in the Chamber report, Lazslo Bock, the Chief Human Resources Officer at Google, a company known for its millennial-friendly culture, recently suggested that while generational differences do exist, they have been exaggerated to a large degree. From his perspective, the biggest difference between Millennials and Gen X is that the younger generation is bold enough to ask for things for which older generations were unwilling to stick their neck out. Rich Floersch, the Head of HR at McDonalds took it even further, insisting that “myths of having a sense of entitlement, having poor communication skills, and being job-hoppers” were blown out of proportion. He argued that when Millennials find work they deem challenging that gives them a sense of purpose and development, they will stay with a company.
Like Millennials, Generation X has been characterized by a lack of loyalty to the company, a need for regular feedback, and the desire for a good work/life balance. In a recent interview with The Daily Beast, Harvard Business School professor Bill George spoke of a spreading trend among Millennials and Xers, particularly among young men who have traditionally been less likely to seek flexibility than their female counterparts:
“Men,” says George, “want an integrated life.” Millennials—that is, people born from the 1980s to 2000—as well as their predecessors in Gen X, “are committed to having life the way they want it,” he adds. Smart companies are creating ways to accommodate them, whether it’s offering sabbaticals or the flexibility to work from home in their pj’s.
But some Gen Y guys aren’t waiting for corporate culture to meet them halfway. They’re living life on their own terms—and finding ways to monetize it."
Other similarities among the two younger working generations include a lack of affluence when compared to Boomers, serious concerns over retirement security, and an appetite for harnessing creative and innovative new solutions to old problems.
Despite the doom and gloom that has characterized the tensions arising out of this generational transition in the workplace, the similarities between Millennials and Generation X offer a number of insights that companies can use to their advantage. To protect your company and better navigate the transitional waters of Boomer retirement and Millennial ascendance, consider these tips:
1. Assess leadership risk and align talent management with your future growth strategy.
Map your organization at the senior levels and identify roles that are mission critical or difficult to fill. Put an emphasis on how each role fits into the future growth strategy; consider what skills will be necessary in a future replacement and how those skills may differ from those held by an incumbent.
In completing this exercise, many companies will find that the talent they will need in the future does not yet exist inside their organization but they will be better informed on how to structure development programs and what to look for in external talent.
2. Couple mentorship and development with flexibility.
There are all sorts of innovative ways that companies are working to attract and retain young talent, from “ROWE” (Results Only Work Environments) to “Unlimited Time Off” where high-performing employees are encouraged to take as much vacation time as they like – within reason.
While some companies have implemented these types of programs with positive results, they may be too radical for other companies. Still it is possible to generate a positive return through more modest changes like flexible office hours, work from home arrangements, and time off as a bonus.
Employee mentorship programs are a smart and efficient way to deliver feedback beyond an annual or semi-annual review while more effectively monitoring each individual’s developmental progress and contribution to the company. By tying such programs to flexible scheduling and extra time off, companies can improve productivity while building stronger performers, boosting the organization’s reputation, and fostering increased loyalty.
3. Get to know the talent outside of your company.
Our post-industrial, globalized economy will increasingly be characterized by contract work, job sharing, and a shift away from pensions and other defined benefits. The growing tendency of Gen Xers and Millennials to seek outside opportunities in order to develop skills and build experience can be mitigated to some degree through initiatives such as job rotation, personal development programs, and mentorship, but such initiatives will never serve as a complete substitute to a nimble succession planning and talent pipelining program.
These modest efforts can help foster a positive intergenerational work environment while mitigating leadership risk in your company. Stay tuned for future blogs where we will explore more ways to attract, develop, and retain Millennial talent. To learn more about changes that will affect your business and talent continuity in the years ahead, download The Rapidly Evolving Global Workforce.