Understanding What Makes Generations Tick

By 2025, 76 million boomers, the generation born between World War II and the 1960s, are projected to leave the U.S. workforce. With birth rates declining in Europe, China, Japan and South Korea, this is a global concern. ?

According to Lynda Gratton, professor of management practice at the London Business School and author of “The Shift: The Future of Work Is Already Here,” the generational shift underway is one of five forces shaping the future of work. The others include globalization, energy resources, employees crafting their own work future, and technology, which may help at least partially to close the labor gap created by retiring boomers. But someone has to use that technology, and someone has to innovate for new technologies to emerge.

The strength of the talent in younger generations, and organizations’ ability to acquire, develop and retain that talent, will be critical. But what do we really know of the shift in talent as the younger generations inherit the workplace, or about what motivates those generations to develop and release their talent for an employer’s benefit?

Direct data on these questions is rare. Much of the generational debate is fueled by socio-historic discussions about societal changes in health, wealth and socio-political conditions during the past 70 years. Further, the discussion focuses principally on attitudes and values, rather than talents and motivations.

If we accept that the war for talent will remain an imperative for organizations, then intelligence on what makes the generations tick and where to focus efforts to ensure a strong supply of talent will determine which organizations will be able to manage the pending demographic shifts effectively.

A Shifting Talent Profile

Given the often-voiced concern about their attitudes toward work, it may surprise some diversity executives to learn the prospects for leadership potential are good for technically savvy and digitally driven millennials. Data from the 2012 talent report by talent measurement company SHL, “The Landscape of Diversity,” indicates one in 11 millennials possess high levels of leadership potential, versus one in 16 boomers and one in 13 Gen Xers.

Diving into the data a little deeper shows that while overall potential is stronger among younger generations, the profile of talent is shifting in specific ways. To analyze managerial leadership potential, effective managers and leaders will know how to: develop a compelling vision that is based on clear and critical thinking; articulate and share goals that motivate others and provide direction; communicate effectively and support others through change; gain support and get things done; and realize tangible goals and objectives to deliver success.

There are a few substantive differences between the generations when sharing goals and modest differences when developing a vision. There are larger differences in gaining support, with the boomers showing stronger potential, and in delivering success, with the millennials showing stronger potential.

Is this more evidence of a generational difference in work style? That is one interpretation. More importantly, these differences point to a few clear actions for organizations. First, companies need to round out the talent profile for the future managers and leaders that Gen Y represent, and they need to understand where the investment in development is going in order to pay a stronger dividend. Second, organizations must help today’s managers better understand the talent they manage and their role in closing talent gaps via the experience and skills they can share with their younger colleagues (Figure 1).

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The Employer Value Proposition by Generation

Employer loyalty has declined thanks to economic instability, job churn and changes in the employee deal, or what employees can reasonably expect from modern-day employers. According to a 2013 Modern Survey report, “State of Engagement: Unveiling the Latest Employee Engagement Research,” boomers are more loyal and engaged than the younger generations.

For instance, only 1 in 5 boomer employees are looking for a new job compared to more than one-third of the Gen Y workforce who are actively looking outside their current organizations for job opportunities. Leaders need to consider these statistics in the context of individual employees’ current roles as well as their career aspirations. However, commitment and engagement with an organization can be related to organizational performance, and given the ongoing competition to acquire and retain strong talent, organizations need to know their EVP really speaks to their employees.

Few would argue against motivation being important to talent development. The 2012 talent report also revealed 18 motivational factors leaders can consider to help inform their talent processes in a multigenerational workforce. There are six factors all organizations need to be aware of, highlighted in Figure 2.

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Among the strongest motivational factors for millennials are progression and personal growth. Sustaining career progression is the most important challenge organizations face in energizing and retaining younger talent who are hungry to learn and compete for opportunities. Since any organization will only have so many senior positions open at any one time, reframing what career progression means has become critical.

For example, to keep millennials engaged, companies need not only to facilitate sustained career progression to more senior positions, but also they must help these employees set realistic expectations and provide development opportunities that align to their aspirations, customize their onboarding experience and first-year work schedule, and work with them to create career development plans. They also must expose them to different areas of the business, make career paths transparent and help them understand that getting ahead doesn’t always mean managing a large team. It could mean becoming a specialist or developing expertise as an individual contributor.

As for the boomer generation, these employees are most likely to have broad skills and experiences from which they can draw insight. They are also the people who hold much of the intellectual property that drives knowledge work, much of the social capital via key networks inside and outside the organization and the tacit knowledge of “how things really get done around here.” Rewards and recognition that emphasizes competition, progression and personal growth likely will not motivate boomers. They have already competed, progressed to their maximum career point and developed the necessary skills and knowledge to succeed.

From Stereotypes to Evidence

Many exploring the generations run the risk of stereotyping employees by virtue of the generation they fall into. While there are differences in talent and in motivational drivers between the generations, there are as big, if not bigger, variations in motivation and talent within the generations. Differences between generations should be used as signposts to guide organizations. Organizations with more granular and talent-focused data across their workforce will have the capability to move beyond stereotypes to more effective management of the acquisition, development and retention challenges that all generations experience.

Despite the differences between the generations, framing objectives that motivate and develop others, empowering people and inspiring them with the trust to succeed will continue to grow in importance. These are the same managerial and leadership qualities required to meet younger generations’ motivational needs. The talent management programs that will pay a dividend will understand the motivational and talent profiles in the different generations, and bring those differences together to transfer the softer skills most likely to be the greatest hurdles for younger talent when realizing their aspirations.

To actively manage the exit of 76 million U.S. boomers while avoiding the loss of intellectual and social capital that many of them hold, organizations will need to take a rounded view of their employees rather than focusing on one generation at the expense of another. Organizations need to understand where generational differences matter and what those differences mean for employee performance and engagement. This understanding is key for the Gen X manager and leader. Bridging between boomers and millennials, and having knowledge about what makes the generations tick, is a critical competency to have to effectively drive performance and sustain employee engagement.

Eugene Burke is chief science and analytics officer for CEB, a member-based advisory company. He can be reached at editor@diversity-executive.com.