What Does the Generational Shift Mean for Employers?

April 05, 2016 | 2347 Views

What Does the Generational Shift Mean for Employers?

Bruce Tulgan

Founder and CEO | RainmakerThinking, Inc.

As the aging Baby Boomers exit the workforce, they will take with them a great deal of skill, knowledge, wisdom, institutional memory, relationships, and the last vestiges of the old-fashioned work ethic.  Organizations with significant “age bubbles” in their employee demographics will be facing these losses and cascading consequences as their aging workers leave the workforce.  This will require dedicating substantial resources to support knowledge-transfer and what we call “wisdom transfer,” as well as flexible retention, succession planning, and leadership development. 

As the global youth tide continues to rise, the new young workforce will bring a whole new set of expectations and behavior that takes for granted the short-term transactional nature of employment.  Organizations that rely disproportionately upon young workers have a permanent “youth bubble” in their employee demographics.  Such organizations will be facing the challenges of an increasingly high-maintenance workforce in which employees will not hesitate to make suggestions, special requests, and demands – in particular related to rewards and flexible work conditions.  This will require dedicating substantial resources to staffing strategy, attraction, selection, on-boarding, training, performance management, accountability, differential rewards, and retention.  

Organizations with significant “youth bubbles” will also face the retention challenge we call “the development investment paradox.”  The paradox is that employers must invest in developing their new young employees, but the more an employer invests, the more negotiating power the new young employee has in a short-term transactional labor market.  With the employer’s development investment in hand, the new young employee becomes more valuable and can leverage the employer’s development investment by selling it to another employer or by negotiating for increased rewards.  This gives today’s most valuable young employees more negotiating power in the employment relationship at an earlier stage in employment.  What appears as “high-maintenance” is actually this new power to ask for more. 

Employers will have many fewer long-term traditional employees.  There will be many more people who flow in and out of organizations – in highly variable roles and arrangements.  The most successful employers will still maintain core groups of key talent and critical longer-term stakeholders.  But these core groups will get smaller and smaller.  Meanwhile, any work that can be streamlined will be done through highly efficient production (“churned and squeezed labor”) that can be staffed-up quickly and staffed-down just as quickly.  Employers will need to have many more fluid/flexible ways to employ people and leverage talent – full-time, part-time, flex-time, on-site, off-site, telecommuting; as consultants, temps, vendors, franchisors, franchisees. 

Employers will face perpetual staffing shortages.  The pressure to get more and more work out of fewer and fewer people means staying lean staffed, always.  At the same time, the rising demand for high-skilled labor – especially in the STEM (Science, Technology, Engineering, and Math) fields – promises ongoing staffing shortages and technical skill gaps.   Employers in every industry will be struggling to attract, motivate, and retain the best talent. 

The successful organization will have as many different career paths as it has people.  Flexible work conditions, learning/knowledge management, pay-for-performance, and coaching-style leadership will be the keys to being an “employer of choice” for in-demand talent.  The ability to get people on board, up to speed, and delivering results quickly will be the key to most staffing challenges.  Opportunities to earn more money and flexibility will go to the employees who most consistently deliver the most value.  Employers will be forced to pay high premiums with lush benefits, lavish work conditions, and lots of flexibility for in-demand talent: What we call “dream jobs for superstars.”  As well, more and more non-superstars will be looking for more and more of at least some of these “dream job factors.”



Bruce Tulgan was one of the keynote speakers at the CHART conference in Seattle. He is an adviser to business leaders all over the world and a sought-after keynote speaker and seminar leader. He is the founder and CEO of RainmakerThinking, Inc., a management research and training firm, as well as RainmakerThinking.Training, an online training company. Bruce is the best-selling author of numerous books including Not Everyone Gets a Trophy (Revised & Updated, 2016), Bridging the Soft Skills Gap (2015), The 27 Challenges Managers Face (2014), , and It’s Okay to be the Boss (2007). He has written for the New York Times, the Harvard Business Review, HR Magazine, Training Magazine, and the Huffington Post. Bruce can be reached by e-mail at brucet@rainmakerthinking.com, you can follow him on Twitter @BruceTulgan, or visit his website www.rainmakerthinking.com.

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