Five generations – one war for talent
The good news is we are living longer.
The bad news? Our working lives could now last longer than the average life expectancy a century or so ago, with many people healthy enough to spent five decades or more at work.
And with that productive longevity comes the challenge of working with multiple generations — as many as five clocking in each day with vastly different life experiences and expectations.
While the terms for generations change based on geography, it is common in Western countries to speak of Traditionalists, Baby Boomers, Generation X, Millennials and (although the name is contested) Gen Z or Gen 2020.
From employees born before the close of the Second World War, to kids younger than Google, the five-generation workplace could become more common as good health keeps people fitter and engaged for longer.
Baker Tilly Mooney Moore Consulting Partner Donal Laverty says although there is a temptation to dwell on the potential challenges of such a situation, the businesses that thrive are more likely to be the ones that treat it as an opportunity.
“No matter where you are in an organisation, you have to be engaged.
“My experience is that there are three consistent characteristic of good employee engagement: it’s around realising potential, sharing organisational goals and promoting employee wellbeing.
“Regardless of where you are on the generational spectrum, those are the three primary things that intrinsically motivate people.”
“I think that generational differences actually present huge opportunities for development on both ends of the generational spectrum.”
– Donal Laverty
Five generations isn’t an entirely new concept but Mr Laverty says employers are now more aware about the effects on its workforce.
Mr Laverty specialises in advising clients on how they can structure and transform businesses. That requires mitigating the potential for multi-generational tension as well as harnessing the mix to grow innovation, drive capability and increase productivity.
One of the key factors in that equation is getting different generations to communicate with and learn from each other – something he has observed at close quarters at Baker Tilly Mooney Moore.
“The challenge for leadership [in any business] is about creating a culture that is respectful of everyone’s views and which encourages unity and co-operation,” Mr Laverty says.
“At the end of the day, everyone is there to make a contribution to the business.”
The causes of this multigenerational melting pot are simple: across the globe, people are living longer and working for longer than ever before.
The percentage of the worldwide population aged over 65 has already risen from less than 5 per cent in 1960 to more than 9 per cent in 2019. By 2050, it’s expected to be more than 16 per cent.
At the same time, the percentage of workers previously considered to be ‘ready for retirement’ continues to grow, prompting countries to reconsider pension ages, and grapple with a world in you might outlive your job by decades.
Research from the Bureau of Labour Statistics suggests one in 10 US workers aged 75 or older will still be working by 2026. The next age bracket down — the youngest of whom would have been born in 1961 — are even less likely to retire. Some 30 per cent of these ‘young’ Baby Boomers are expected to continue to work past 2026.
In the UK, the number of over-70s in the workforce doubled from 2009 to 2019, while in Australia, 20 per cent of over-70s still work.
As the demographic wave swells, other countries are looking at measures to support older workers, in a bid to keep those who can work engaged and employed. Germany first instituted a 50 Plus program in 2005 in a bid to equip older workers with skills that would allow them to remain employed, while the Japanese government is actively working to raise its retirement age to 70.
Motivating a workforce that spans half a century is no easy challenge, and the things that keep older workers motivated, including financial drivers and prestige, may not be as useful in motivating younger generations.
Mr Laverty says that while a generalisation, older generations may think in terms of ‘paying one’s dues’ and earning the opportunity for promotion and leadership.
Younger workers might put more value on work/life balance with personal fulfilment as a high priority. Their focus is on working smarter, not longer.
And as more mature leaders, Baby Boomers are likely more interested in impact and legacy than Generation X workers, who might still be trying to claim a seat at the top table.
“One of the challenges is that we have a propensity for negative stereotyping different groups,” he says.
“Older workers might perceive millennials as being entitled and too eager to challenge norms, while millennials view older generations as being stuck in their ways.
“But that’s too generalised and not the case. When you distil it down, broadly all human beings want the same things – security, comfort … the basics, really.”
It can be a financial gamble for employers if they do not get the motivation package correct.
The latest report on human capital from Baker Tilly US, The Talent Problem, notes that demographic changes are complicating the retention of talent and make it harder to find suitably skilled personnel in a tight labour market.
“Millennials have become the largest generation in the labour force but the overall number of millennials is smaller than the retiring boomer generation,” it says.
“Younger employees are more open to changing jobs every two to three years [and] the attitude of millennials to job tenure and new opportunities affects all generations in the workplace.”
Get the mix of intrinsic and extrinsic motivators wrong for Millennials and Gen Z and they will leave, which means corporates need to rethink their workplace culture, the opportunities they can offer for younger groups to balance work and life, and the sense of purpose all generations can find in their daily efforts.
Achieving this requires all ages to see the world from different perspectives.
“The older generation that founded and run the company may have different business goals than the younger generation preparing to take over.”
– The Talent Problem
“The older generation that founded a company and currently runs it may have different business goals than the younger generation who may be preparing to take over,” the Baker Tilly US report warns.
“The younger generation may want to create a culture that is more nimble and more technology focused and that provides a better life balance. The parents and grandparents may resist.”
Sometimes lost in the discussion about motivating younger workers is the different kind of work many find themselves undertaking compared to generations that came before.
Countries across the OECD have reported a decline in full time jobs for younger workers, replaced in many cases by part-time, short-term or gig economy roles. The short tenure of younger employees is not necessarily driven by choice, but sometimes because they feel the need to progress faster up the career ladder than is possible staying in one place.
Indeed, countries where younger workers are less stressed about finances appear to have longer job tenure rates than those where education debt and cost of living might lead to quick-fire job change choices.
Mr Laverty says businesses need to see the mix of different generations in their workplaces as an opportunity — with each having their own strengths, and diversity providing a competitive advantage.
Research shows that diversity across a range of dimensions can be a key driver of increased innovation and improved business performance, he says, and the best organisations are embracing the chance to pair young and old.
“When you look at 20 months being the average stay of a millennial in any organisation, that’s not necessarily a reflection on them as much as it is a reflection of an organisation’s ability to adapt quickly enough in terms of flexibility and career development evolution,” Mr Laverty explains.
“I think many organisations are still behind the curve when it comes to getting it right.
“They might have introduced flexible hours, broken down dress codes, created paid benefit schemes and created mentoring and regular personalised feedback systems – but I feel they are still just at the cusp of it.
“Then you look at other organisations that have gone beyond just the generational focus and are instead also looking at diversity across gender, race, work experience, education and cultural background.
“If you look at some of the most advanced and successful empires in history, they were multicultural and able to have a fusion of ideas.
“It’s the same in modern-day organisations. Organisational behaviour is rooted in this assumption that diversity leads to innovation and different perspectives – and that from different perspectives come novel solutions.”
While change isn’t easy, the reality of managing multiple generations is one that more and more businesses realise they have to tackle.
“There’s an understanding among business leaders that the future of work has changed and continues to be changing,” Mr Laverty says.
“Everyone is chasing the same people and the skills shortage is driving organisations to adapt their approaches — whether they want to or not.”
Korea, the world’s fastest ageing nation
Few countries in the world face the challenges of an ageing population to quite the extent that South Korea does. In 2017, senior people outnumbered young people in Korea for the first time. By 2050, it’s estimated that more than a third of the population will be aged 65 or older, making it the fastest ageing population in the world. In just 17 years, Korea officially went from an ageing population to an aged one – something it took the “notoriously ageing” Japan 24 years to do. As context, Germany took 40 years between those milestones, while France reached them 115 years apart. For Korea, with an economy that is the fourth largest in Asia and the 12th biggest in the world, the challenges of juggling five generations in the workforce are unique. A yet-to-mature National Pension Scheme means older Koreans work to much older ages than other OECD countries, while the lowest birth rate in the world means fewer younger people entering the workforce when their elders eventually do retire. Yet, according to the OECD, many Korean companies are reluctant to let employees work beyond the age of 55, despite it being common for firms to set a mandatory retirement age of 60. Baker Tilly Woori Vice Managing Partner Brian Shim says the South Korean government’s advocacy of “job sharing” – older employees working past previous retirement ages on reduced salary – is just one step in managing the generational mix. He also advises clients to embrace “social learning” as part of their everyday business and consider additional training for older employees. “Social learning simply means employees learning from each other but what makes it special from traditional learning is that it’s a bilateral communication without barrier of position, age or gender,” Mr Shim explains. “Social learning can be a great opportunity for our whole country because this campaign can be a fresh start of genuine conversation and may offer ways to solve deep generational conflict between elders and youngers. “South Korea has been drastically changing for 60 years and this drastic change has sometimes made it hard for people of different ages and genders to understand each other. “If we fully implement social learning programs across many industries, it can be a great opportunity to address this issue.” Another complicating factor for South Korea has been the country’s tradition of Confucianism and a focus on respect for and, in many cases, deference to one’s elders. Younger generations, Mr Shim says, are not always automatically willing to afford that level of respect. But he believes vastly different generations can still find common ground and points at examples where companies have made particularly effective use of their older workers. “Older workforces can be slower to learn new things – particularly with emerging technology such as using smartphones and applications,” Mr Shim says. “However, the seniors have their own strengths in experience and how to approach different scenarios in life. Applying seniors’ experience with soft skills is very helpful for the design and structure of businesses. “For example, Mercedes Benz has been using YouTube to transfer their older workers’ expertise to younger apprentices and SAP is also implementing a work sharing program, called ‘mature talent’, to transfer those older workers’ knowledge. “If we consider that software has huge impact on most of the products we use and that making software is about providing structure, older workers can have a role in that.”