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

1. www.conference-board.org Generations at Work: Implications for Finding, Retaining and Managing Talent Diane Piktialis Research Working Group Leader and Program Director June 2, 2008 Diane.Piktialis@conference-board.org

2. Topics • Changing labor force demographics and composition by generation • Implications and challenges for talent management

3. www.conference-board.org Part I.Who are the Generations at Work?

4. Changing Demographics: “What’s the big deal?” Aging U.S. workforce will thin current pipeline % change 2000 - 2010 Median Age of US worker in 2000 was 39. In 2010, it will be 41. 35-44 year old cohort to shrink 10% First time in 25 years that youngest workforce grew more than overall Source: Occupational Outlook Quarterly, Winter 2001-2002, Bureau of Labor Statistics

5. Aging is Global Ratio of Retirement-Age to Working-Age Male Population For every 100 men of working age, the number of retirement age men will nearly double in 30 years in many countries

6. Why Should Employers Care? • 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 The Conference Board CEO Challenge: In 2008 talent shortages emerge as #1 concern

7. 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

8. 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)

9. The Four Generations at Work

10. 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

11. 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

12. 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.

13. 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)

14. The Multigenerational Workforce Today

15. 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.”

16. Generational Differences at Work • Attitudes toward work • Work styles • Job satisfaction criteria • Career aspirations • Learning styles • Types of commitment

17. 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

18. 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

19. 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

20. Clashpoint: Communications

21. 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”

22. Part II.Bridging Generational Divides:Talent Management Challenges

23. Talent Management Implications • Advancement and succession planning • Employee motivation, engagement, productivity • Management practices • Training and development • Career paths • Rewards and benefit designs

24. 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

25. 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.

26. 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

27. 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 • Thelearning 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

28. 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

29. 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

30. 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

31. The Generational Digital Divide: Work Styles Digital Natives Digital Immigrants Gen YMatures, Boomers, Gen X

32. A Typical Millennial Gen Y is a generation “on the go” “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

33. 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?

34. Summary

35. Generations and Organization Performance Generational understanding is critical tosuccess at the workplace • Employee • Recruitment • Employee satisfaction • Trust • Retention • Organization • Engagement • Trust • Productivity/Effectiveness • Collaboration and Teamwork • Creativity and Innovation