The Generational Divide in Talent Management

Author(s): Piktialis, Diane

In today's competitive business environment, organizations are focused on human-capital management and the strategies that maximize competitive advantages. Generational competence - the ability to understand, appreciate and meet the specific needs of different generations - can help an organization maximize the value of its human capital. Generational competence not only helps organizations hire, retain and engage top talent, it also can be leveraged to identify new markets for current products, develop new products and services, and make improvements in operational effectiveness, cross- functional teamwork and customer responsiveness.

Four Generations Bring New Diversity Challenges

Organizations throughout the developed world are in the midst of a significant demographic change - the aging of their workforces. This demographic shift, combined with dramatic changes in organizational structures, information flow and career paths, has pushed workers of different ages into roles of close collaboration and, in many cases, turned age-based hierarchies upside down. These changes also have created new diversity challenges. Research indicates that generational differences determine many employees' values and needs. Members of each generation bring distinct sets of values, attitudes and behaviors to the workplace, largely as a result of the era in which they grew up:

* Matures, ages 60-78, make up about 10 percent of the U.S. workforce. They grew up in tough economic times during the Great Depression and World War II. Matures tend to value hard work, have respect for authority and believe in "duty before pleasure." They are dedicated, and not just to doing a good job or making themselves look good, but also to helping the organization succeed and getting customers what they need. They are great team players, carry their weight and don't let others down.

* Baby boomers, ages 41-59, make up almost half the U.S. workforce. They grew up during an era of economic prosperity and experienced the tumult of the '60s at an impressionable age. Baby boomers tend to be optimistic, idealistic and good team players. They are driven, love challenge and want to be stars and build stellar careers. Because they have had to compete with each other at every step of their careers, they can be highly competitive.

* Generation X, ages 28-40, makes up just 29 percent of the workforce. This generation witnessed parents' experiences with corporate downsizing and restructuring in the '70s and '80s. Raised in an era of two-earner households and rising divorce rates, many of them got a child's-eye view of work-centric parenting. They value flexibility, work-life balance and autonomy on the job, and appreciate a fun, informal work environment. They are constantly assessing how their careers are progressing and place a premium on learning opportunities. They are technologically savvy, eager to learn new skills and comfortable with change at work. They appreciate frequent and honest feedback from their managers and mentors.

* Generation Y, ages 27 and younger, makes up just 15 percent of the U.S. workforce. Over the next two decades that percentage will grow to approach that of the baby boom in its prime. Generation Y tends to be well organized, confident, resilient and achievement oriented. They are excellent team players, like collaboration and use sophisticated technology with ease. They are comfortable with and respectful of authority and relate well to older people. More than any generation that has come before, they are comfortable with diversity. They want to work in an environment where differences are respected and valued, where people are judged by their contributions and where talent matters.

Drawing on the concept of cultural competence, the term "generational competence" describes the adaptations or competencies organizations must develop today to meet the diverse needs of four generations in the workforce.

Generational Competence and Talent Strategy

Generational competence - the ability to understand, appreciate and meet the specific needs of different generations - can help an organization maximize the value of its human capital. In pursuit of generational competence, organizations will need to understand and build awareness of generational differences; manage employees differently; study how different generations interact, use products and access services within the enterprise; and design projects to provide opportunities for cross-generational collaboration.

For the employee, generational competence means that an organization responds to each person's unique needs, including those rooted in generational differences. One size no longer fits all. Employees of different generations want different rewards and benefits and have different requirements for work-life balance. In a tight labor market, they will reject uniform benefits and look for choices and opportunities that better meet their individual needs - for money, benefits, work-life balance, opportunity and recognition.

How an organization uses generational competence as part of its talent strategy will vary with the enterprise's goals and generational structure. The uneven population curves caused by the baby boom and "baby bust" generations will present important challenges to organizations as older workers begin to retire or scale back in the years ahead. The organizational strain of that transition is likely to be both mitigated and intensified by generational differences, including the following:

* Baby boomers' intention to continue working after age 65, but at jobs that allow greater work-life balance and bring more personal fulfillment

* The premium younger workers place on work-life balance and their lessened interest in advancing to positions of greater responsibility

* The need for employees of four different generations to effectively work together to further the organization's aims - to affect the transfer of knowledge and skills from older workers to younger workers and visa versa, in order to gain the advantages possible from the improved cross-functional teamwork and synergies of four distinct sets of strengths and four different world views

* By instituting management and business processes, designing benefits and employee effectiveness services, and tailoring talent-management strategies to address the needs and earn the engagement of employees of different generations, an organization is taking steps to hire, retain and gain the full contribution of the most talented employees across the generations.

Generational Competence and Product Strategy

An important gain from generational competence in managing talent within an organization is the opportunity to apply multigenerational perspectives to identify and address customer needs and market opportunities that might otherwise go unnoticed.

The technology boom of the '90s brought innovations such as voice recognition equipment for the telephone and multitasking tools: PDAs, wireless telephones with text messaging and instant messaging. The early adopters of these products and services tended to be younger, tech-savvy customers. Consider the market opportunities for versions of these tools geared to the weaker eyes and less nimble fingers of older customers.

And what might the market opportunities be for products and services that help generation X parents find the worklife balance they seek while continuing to make important contributions at work? Ceridian, for example, interviewed employees in generation X and generation Y and created new content for its employee assistance program (EAP) and work-life services programs as a result. For many years, work-life has focused on employees with family concerns. But younger workers are often single and dealing with issues such as how to live with roommates, develop a social life while working long hours or buy a first home or condo.

Younger workers also expressed different preferences for how they get information. Generation X, and generation Y even more so, want information instantly and interactively as a result of the technology and media-rich environment in which they grew up, while midlife and older workers often maintain a preference for print. Simplicity and ease of use also can drive adoption of technology-based offerings for those who did not grow up in the MTV era. Print materials too can be enhanced for older workers. Functionality, such as a larger print option for the midcareer employee who elects to obtain work-life information, is just on the horizon.

Every organization will have its own market opportunities to notice and seize. The key is to pay attention to generational differences. Ignored, they can be hidden obstacles to success. Understood and valued, they are assets to be explored for potential synergies and opportunities.

Generational competence can give an enterprise competitive advantage by maximizing human-capital and talent-management initiatives, minimizing the cost of lost knowledge and enhancing product marketing. Organizations will need the talent and engagement of all generations in order to build tomorrow's workforce. Human resources can play an important strategic role in these efforts.

Research indicates that generational differences determine many employees' values and needs.

The views expressed in the Viewpoint column are solely those of the author and do not represent an official position of WorldatWork. If you would like to respond to this column or other articles in workspan, please e-mail your comments to workspan@worldatwork.org. Correspondence may appear as Letters to the Editor in upcoming issues of workspan.

Diane Piktialis

CERIDIAN

ABOUT THE AUTHOR:

Diane Piktialis is a work-life services director and an expert in solutions for an aging workforce force at Ceridian. Author's Note: The term "generational competence" is pending trademark by Ceridian and should not be reproduced without permission.

© Copyright WorldatWork Mar 2006
© Copyright 2007 NetContent, Inc. Duplication and distribution restricted.