Discovering the Y in generation gaps

by 06 Mar 2007

The need to attract and retain good employees is increasingly important given a diminishing pool of skill and a war for talent. Melissa Yen looks at the impact of generational issues and how companies are coming to terms with demands from generation Y

Three, and in some cases four, distinct generations currently comprise our workforce, each bringing with them differing sets of values, beliefs, attitudes and expectations with regard to employment and careers.

In a tight labour market, the need to effectively manage the generational diversity that exists among veterans, baby boomers and generations X and Y, has become crucial.

“The talent and skills shortage is here to stay. Organisations need to put new strategies in place to support proactive recruitment and HR policies,” says Jason Cartwright, LINK Recruitment’s general manager of client services.

A one-size-fits-all approach to managing generations is no longer sufficient, according to Cartwright.

“The most notable tension we are seeing at the moment is between baby boomers, management, senior management and gen Y employees. The consequence of that at the moment is attrition and turnover, as gen Y won’t try to change things, they’ll just leave, whereas gen X will try to change things,” he says.

Peter Sheahan, talent development and generation Y expert, says dealing with intergenerational issues should involve workplaces understanding their performance needs, the kind of talent they need to meet that benchmark performance as well as what the needs of that talent are in order to attract and retain them.

“The organisations that are doing it well are those empowering, educating and training their managers on how to deal with the diversity,” he added.

The power of Y

As organisations attempt to face the challenge of intergenerational issues, many have come up with unique strategies to help them deal with, and more importantly, learn the differing needs and expectations of generations.

For Westpac, the emerging gap in labour demand and labour supply forced them to consider what they could actually do to gain a market advantage.

At Encompass Credit Union Limited, an ageing member (customer) base, with an average age of 46 has led to the recent formation of a generation Y committee in the interests of future growth and development of the credit union.

“Strategically, it is important for us to attract younger members. To do this, our CEO decided it would be best to put together a committee of gen Y staff to look at ways of attracting members from this demographic,”says Kate Brown, training co-ordinator and member of the committee. Primarily used as a forum, this involves providing input into marketing campaigns for young people, involvement in the redesign of the Encompass logo and investigating products and services that appeal to the gen Y demographic.

According to Penny Coates, general manager, people and performance, Westpac gen Y have huge faith in their capability, as they are not inclined to sit around and wait for another role to come along. “They are going into a marketplace where this year it becomes an employee’s marketplace rather than an employer’s marketplace,” she says.

However, Sheahan says as a result, managers have become too afraid to tell gen Ys their work is not up to standard because of how they might respond or concern they might leave. “This should not compromise performance standards or accountability for their work,” he says.

Westpac discovers the differences

Research into all three generations was conducted to gain an understanding of the generational issues. This involved a series of workshops that brought together representatives from each generational cohort. “We actually put them together in their generational groups to get them talking about their motivations and frustrations, as well as what a good working environment looked like to them,” Coates explains.

As a picture of the generational differences began to develop and some of the differing frustrations and tensions were expressed, the next step involved considering how this could be resolved across generations. “We then started to bring our different generations together to get them to share their observations and work through with each other what this actually meant for our workforce.” Different techniques were used such as conversation mapping, focus groups and the setting up of a blog to share and build on ideas and engage people with different expectations and aspirations.

“When we looked at the expectations of our different generations, we found that our gen Y valued being valued. They valued diversity and belonging to a team that had a mix, whether it be an ethnic mix, an age mix or a leadership and team member mix. They wanted work to be non-hierarchical, and a social and fun environment was really important to them.”

Coates also claims that development opportunities were of importance to the younger generation. “Development opportunities for our gen Ys were not a vertical ‘I want a career path’, ‘I want to be CEO next year’, which is what baby boomers think of Ys. They wanted opportunities to do different things and to do things that were challenging and that they would get a real sense of purpose and sense of achievement from. They were interested more in non-monetary rewards,” she says.

For gen X, a culture of honesty and openness was valued. “Gen X revealed they wanted timely communications, and help and support to cope with change. They were the ones who wanted more money in their pay packet.”

Meanwhile, Coates reports that the baby boomers, were wanting more respect at work, more commitment from the organisation, and for loyalty and hard work to be rewarded.

Meeting the needs

In reviewing the results of their research, Westpac revisited their talent management strategy, updated it and started to think about what they needed to do. “We started to think of segmenting, so we started to look at our employee base, our customer base, started to segment these and look at what would work,” explains Coates. “When we started to look at our gen Ys, and the different perceptions we got from baby boomers, one thing that struck us was that in order to get some quite innovative stuff into our talent strategy, I needed to take my peers, most of whom are baby boomers, on a journey to understand what gen Y wanted.”

Knowing the expectations of a fun and non-hierarchical work environment, Coates left the organisation of an engaging talent strategy and succession planning session up to of some of her high potential gen Ys to help bring their leadership team up to speed “They actually came up with a fabulous afternoon and my sense of trusting them was rewarded ten-fold. They took us out for lunch to a sushi bar – this was low tables, you share food, and you don’t have your own plates. They showed us the power of networking and being networked.”

Following this, the younger cohort took their senior leaders on a speed-dating exercise. A two-minute, one-on-one exchange was made between each generation on what frustrates them, what motivates them and what they wanted to have changed in the workforce.

The Gen Y team then took their leaders to a completely different environment and turned the tables. With a row of seats on either side of the room, one for gen Y and the other for the Boomers, the gen Ys gave the leaders a chance to ask them questions to help qualify, quantify, and better understand some of the issues that arose from the speed-dating exercise. “We got a deeper understanding about the generational expectations and then they turned the tables back on us questioning what we were going to do about it,” says Coates.

According to Sheahan, it is such exercises of behavioural flexibility that have allowed Westpac to work with multiple generations and deal with the diversity within the generation as well. “The reason generational research is useful is because we do see collective groups of people with some common characteristics even though there is a lot of diversity in that group.”

The gen Y committee has enabled Encompass to provide young people with the opportunity to have input into the strategic direction of the organisation, which Brown claims is a great drawcard when recruiting staff. “Young staff members have often commented how involvement in this committee has allowed them to feel like the youth of the organisation has a voice and are looking towards the future – something which encourages younger staff members to consider their career goals and look at the development opportunities we have at Encompass.”

The organisation is therefore in the early stages of rebranding, seeking new company vehicles suited to a younger demographic while looking at proving their commitment to social responsibility as part of their image. “We’ve got new recycling bins downstairs and we’ve just entered into a partnership with Youth Challenge Australia who send volunteers overseas,” says Brown. Encompass is sponsoring a program whereby people are sent overseas to Vanuatu to be taught financial literacy. Quite often gen Y in particular seeks to be affiliated with a company that makes contributions such as this, and which also allows them to contribute to the business strategy, which is the focus at Encompass. “People want to feel like the work they do makes a difference to the organisation and increasingly they want to know that their organisation makes a difference in the community,” says Sheahan/

Addressing the needs of Gen Y

Jason Cartwright, general manager of client services at LINK Recruitment, suggests the following for organisations looking to address the needs of different generations in the workplace:

Examine the generational profile that makes up your workplace. If you have a workforce that is entirely comprised of a specific generation, it will make shaping HR policies simpler.

Analyse the types of people you are hiring and assess their generational profile. What motivates them and what are their expectations?

Check your organisation's temperature through an employee survey or vox pop.

Actively assess the opportunities, emerging trends and/or challenges with your organisation. Then get agreement from the top down on how you are going to strategically address these challenges.

The stats on Gen Y

By 2008, more people will leave the Australian workplace than enter it, making it critical to address the changing demographics in the workplace, according to Link Recruitment.

Research from Swinburne University has found the Australian labour force will age rapidly with figures showing the percentage of those aged under 45 have shifted from 87 per cent in the period from1982 to 1992 to 14 per cent from 2002 to 2042. Meanwhile, those over 45 will increase from 13 per cent over 1982-1992 to a staggering 86 per cent during 2002-2042.

Our labour force is also shrinking dramatically in Australia , a labour force of 185,000 in 2002 with declines moving to 105,000 in 2012 to as little as 12,000 in 2022 have been predicted and reported in Access Economics - Population & Aging, 2001.