Once upon a time, work was about getting a paycheck – a way to put food on the table and a roof over your family’s head.   Health care benefits, vacation pay, and other perks were exceptions not the rule. Sundays were a day off to rest, pray, and recoup for next week’s work.  That changed with the formation of guilds and later labor unions, when the process of representation for the workers began in the hopes of achieving fair wages and reasonable work schedules.   

But thanks to a recession and a world marketplace where dramatic change occurs in months not decades, the definition of work and what constitutes quality of life has been indelibly altered.  Welcome to Talent Management 2011!

Recruitment and retention strategies that were considered best practices and highly competitive just a few years ago are now ineffective and even detrimental. New pressures coming from aging demographics, globalization, and technology are turning workplaces upside down and inside out. In fact, it’s even hard to tell anymore who is working when and where. Many traditional workplaces of the past are gone – caput. Others have gone virtual, invisible to the passerby but very real in terms of productivity and profitability.  And for the first time in history, four generations are working side by side all but killing one-size-fits-all recruitment and retention strategies. 

All these changes – both gradual and dramatic – have converged to put many companies at risk for losing their top talent.  New and innovative talent strategies must be put in place to position companies for success.

Executives confirmed this need to change in a recent Deloitte survey and white paper titled Talent Edge 2020.  Forty-one percent of executives said “competing for talent” was a top concern, followed by developing leaders and succession planning (38%), and retaining employees at all levels (37%).  Severe talent shortages are expected over the next year in Research & Development (34%), executive leadership (25%), and sales (19%).  Even positions like customer service and marketing are expected to be tough to fill positions with severe shortages, 19 percent and 16 percent respectively, expected by executives.

The executives and senior talent managers who participated in this survey clearly recognize the importance of developing a strategy to retain key employees. Over the next twelve months, nearly seven in ten executives surveyed (68%) reported they have a high (39%) or very high (29%) level of concern about retaining critical talent.  Another six in ten (64%) have a high (40%) or very high (24%) fear of losing high-potential talent and leadership.

The problem is most of the companies surveyed, by their own admission, are not doing a very good job of holding onto key employees. Worse, many do not even have a clear understanding about what factors are driving voluntary turnover at their organizations.  With a return to some economic normalcy and the well-documented skills shortage among applicants, the need to recruit for new openings will be hard enough without having to replace the home-grown talent pipeline. 

While the white paper highlighted numerous best practices, one stood out: “Companies differentiate themselves by culture, compensation and future opportunities…and deploy different strategies to appeal to different generations.”

The executives broke down their most effective retention initiatives as follows (each generation listed by priority rank):

Veterans (over age 65)

1. Additional bonuses or financial incentives (25%)
2. Additional benefits (health and pensions) (24%)
3. Flexible work arrangements (20%) -  Corporate social responsibility (20%)

Baby Boomers (ages 45-64)

1. Additional benefits (health and pensions) (26%)
2. Additional bonuses or financial incentives (23%)
3. Additional compensation (21%) – Strong leadership/organizational support (21%)

Generation X (ages 30-44)

1. Additional bonuses or financial incentives (21%)
2. Additional compensation (19%) – Strong leadership/organizational support (19%)
3. Customized/individualized career planning (18%) – Succession planning (18%)

Generation Y (under age 30)

1. Company culture (21%)
2. Flexible work arrangements (20%)
3. New training programs (19%) - Support and recognition from supervisors or managers (19%)

Recruitment and retention of critical talent is sure to stay on the radar of executives for years to come as shortages and losses of skilled workers deepen.  As a result, an effective talent management program becomes a much sought-after competitive advantage as less than one company in five participating in the Talent Edge 2020 survey could describe themselves as “world class.”  

Cross-generational teams bring challenges and rewards. Nearly three-quarters (72 percent) of hiring managers said managing multigenerational work teams poses a challenge. But more than one-third of workers polled felt having a group of employees at different experience levels increases productivity.

What are the most significant generational differences when it comes to workforce planning?

• Generational views on next career steps differ. For Gen Y, looking for a new job is the most common post-recession career plan, whereas Gen Xers polled said they are more inclined to update their skills. For baby boomers surveyed, staying put at their companies was the most commonly cited post-recession career plan.
• More Gen Yers (36 percent) than Gen Xers (30 percent) and baby boomers (24 percent) planned to look for new job opportunities.
• Gen Xers polled were more inclined to enhance their skills sets (38 percent) and build tenure with their companies (33 percent) in the aftermath of the recession than other generations.
• A greater percentage of baby boomers (54 percent) than Gen X (46 percent) or Gen Y (39 percent) respondents said they will work past the traditional retirement age.
• More Gen Xers (34 percent) than baby boomers (27 percent) said they had increased their retirement savings since the recession began.
• More baby boomers (54 percent) than Gen X (45 percent) or Gen Y (35 percent) employees identified the greatest challenge when working with multiple generations as having differing work ethics and approaches to work/life balance; more Gen Yers attributed difficulties to differing communication styles (29 percent for Gen Y versus 16 percent for both Gen X respondents and baby boomers).

But different generations don’t always see the world differently? Many generation similarities do exist.

“Understanding the values shared by nearly all employees, particularly in light of changing economic conditions, can help companies enhance their recruitment and retention efforts,” said Max Messmer, chairman and CEO of Robert Half International and author of “Human Resources Kit For Dummies,” second edition (John Wiley & Sons, Inc.).

• For all generations surveyed, working for a stable company and having job security were two of the most important aspects of the work environment, beating out having a short commute or working for a socially responsible company.
• When evaluating employment offers, salary, company stability and benefits were the most important factors for all three generations.
• Health care coverage, dental coverage, vacation time and 401(k) matching were the highest valued benefits for all generations surveyed.
• The most commonly cited benefit of being part of multigenerational work teams was bringing together various experience levels to provide knowledge in specific areas.

“Many employees, particularly Gen Y professionals, are biding their time in their current employment situations and plan to make a move when they feel the economy is on firmer footing,” said Brett Good, a Robert Half International district president. “Now is the time for employers to take action and outline career paths within their company for strong performers. “

There is a finite pool of talent worldwide. Support for our technological and physical infrastructure is in short supply.

Technology has increased its pace whereas educational advancement and talent creation have slowed down.

An obsolete 20^th century education-to-employment system can no longer cope with the realities of a 21^st century global labor market.

40% of workers in the United States and Canada have basic workforce education skill deficiencies.

Only 25% of America’s current eligible workers comfortably meet the new job criteria.

About 95 million adults are reading at or below the 8^th grade level of comprehension, disqualifying them for most well-paying jobs.

More than 90 million U.S. workers currently lack the reading, writing and math skills to do their jobs properly.

Compare this to Brazil, where 88% of adults and 97% of youth are literate and 70% of students complete high school.

Although 64% of high schools graduating seniors enter some form of post-secondary education, only 25% graduate with a college degree.

15% of U.S. high schools produce 50% of all the dropouts.

Young people are eager consumers of technology, but not interested in working in technology careers.

Recruiting, retaining and developing skilled people will become so challenging that many businesses will be forced out of existence.

Computers did not cause mass unemployment, but they did create a major upheaval in the nature of work.

75% of U.S. jobs will require both a good liberal-arts-based general education plus post secondary technical training.

The current education-to-employment bureaucracy chokes the innovation and change we need.

Forget Frederick Taylor’s stopwatch management. Start treating people like “brain workers.”

… it seems that the world will end, not with an explosion, but with a slow grinding halt as everything just stops working. A. Brown

We live in a moment in history when change is so speeded up that we begin to see the present only when it is already disappearing. R.D. Laing

Most of these random throughts were highlights from “Winning The Global Talent Showdown“ by Edward Gordon. Ed will be my guest on my radio show, Workforce Trends, on June 16 at 11AM EDT. Tune in!

Based on my random thoughts for this week, I must ask: Are employers underestimating the complexity and pace of change? What do you think?

The book review in its entirety is posted below.

“What is a generation?” asks Ira Wolfe in his new book Geeks, Geezers, and Googlization. “A generation is a group of people who are programmed by events they share in history while growing up… a common set of memories, expectations, and values based on headlines and heroes, music and mood, parenting style, and education systems.”

I would agree with this definition, and would add that it ties in with the concept of generation gap. Parents (and sometimes even older siblings) often do not “get” their kids. They don’t understand their vocabulary. They don’t understand what motivates them. And they absolutely, for the life of them, cannot understand why a pieced eyebrow is cool. (Who am I to criticize…in my childhood, coolness was defined by acid-washed jeans that were tightly rolled around the ankles and permed hair and makeup on male rock stars. Go figure.)

Mr. Wolfe’s book is an interesting study on the relationships between the generations in the workplace. It’s very similar in substance to the generational work done by William Strauss and Neil Howe (Generations, The 4th Turning, Millennials Rising), but it’s much less academic and, frankly, quite a bit easier to digest. Corporate executives who find themselves managing a multigenerational workforce should find the book quite valuable, as should anyone struggling to understand the generation gap in their own home, for that matter.

Wolfe speaks of the generations as if they were single members of a large family. At this stage in their careers, the Baby Boomer managers are “parents,” while the Echo Boomer employees are “kids.” Generation X, stuck in the middle as always, is analogous to an unloved older stepchild, cut off from the nurturing love fest between the Boomers and Echo Boomers.

Of Generation X, Wolfe writes “Coming of age in the shadow of the Baby Boomers virtually ensured that this generation would be overlooked and ignored; like Great Britain’s Prince Charles, they are the workplace ‘heirs apparent,’ waiting endlessly and impatiently to assume leadership.”

And like the unfortunate Prince Charles, their waiting has no end in sight. Gen X is hitting a “gray ceiling,” as the incumbent Boomers refuse to retire and make room at the top. But while Gen X waits for its chance to take the reins, Gen Y is slowly coming up behind them. Given the symbiotic relationship between the Boomers and their “Mini Me,” the Echo Boomers, Gen X is right to worry about being leapfrogged.

Perhaps it should come as no surprise that Gen X is a very entrepreneurial generation; with the Baby Boomer generation acting as an 80-million-person roadblock to their career advancement, it is understandable that Gen Xers believe that their best chance to excel is through starting their own businesses. Of course, Gen X also watched their parents and older brothers suffer through the layoffs and restructurings of the late 1970s and early 1980s. Seeing quality professionals lose their jobs through no fault of their own made Generation X grow up a little cynical and mistrusting of large companies.

Wolfe also has a secondary theory for Generation X’s independence and somewhat prickly demeanor. While the Echo Boomers were the “trophy kids” who were coddled from birth by their well-intentioned soccer moms who slathered them in antibacterial hand wash every time they left the house, Gen X was the “latch-key kid” generation. They had to fend for themselves at a young age. They also weren’t required by law to wear a helmet and knee pads every time they rode their bike to school, nor were they required to sit in a car kiddy seat until puberty. In short, they weren’t smothered by their mothers (or by the “nanny state”), and they were allowed to be kids — little Huck Finns and Tom Sawyers who got into a lot of trouble but ended up stronger for it.

Don’t underestimate this personality characteristic; you don’t realize how valuable it is until you see the alternative: the neediness of the Echo Boomers (also called the “Millennials” and “Gen Y”). In smothering their children with things like “My kid is an honors student” bumper stickers, the Baby Boomers have created a codependent monster in the Echo Boomers they raised. Echo Boomers require constant attention and affirmation in the workforce. They’re emotional and oversensitive. And they don’t understand why it’s not ok to wear an eyebrow piercing into a place of business if you want to be taken seriously or that it’s rude to have your face buried in a text message when someone is talking to you. (This is my personal pet peeve. Though she is now a married professional in her mid-20s and generally has good manners, my Echo Boomer kid sister has the annoying habit of doing the “Blackberry prayer” when I’m trying to talk to her. Her husband does it too. It’s maddening.)

Wolfe does an excellent job of describing the frustrations felt by managers today:

At school, teachers accentuate the positive. Kids no longer fear the bad report card — teachers do. This generation was treated so delicately that many schoolteachers stopped grading papers and tests in harsh-looking red ink to avoid bruising the child’s precious self-esteem. Managers in turn must now tread lightly when making even the most benign critique…

How did these kids get this way? For many Millennials, few “accomplishments” didn’t rate some type of acknowledgement. In games, it was common for everyone to receive a trophy — win or lose — thus the name “trophy kids…” The lesson shifted from “second place is the first place for losers” to “everyone who plays is a winner.”

This generational tension is a bit ironic. While many managers and most of the media targets the kids, the blame might fall squarely on the very people doing the loudest complaining — doting parents, teachers and coaches. After all, the grumbling Baby Boomer managers are the same indulgent parents who raised the millennial generation after starting families late in life or vowing not to make the same mistake twice with children from second and third marriages.

Wolfe, a graying Baby Boomer, is certainly no crotchety old man wagging his finger at “kids these days.” Quite to the contrary. (If anything, it is me, your younger Gen X writer who fits that description.) Wolfe sees a lot of untapped potential in this young generation. What I might consider a short attention span, an inability to focus, and insufficient attention to detail, Wolfe calls “hyperalertness,” defined here as an “advanced form of mental flexibility.” I would consider instant messaging three friends while simultaneously uploading photos to Facebook, blogging about rock bands, playing Second Life, and listening to an iPod to be a colossal waste of time of absolutely no economic value. I certainly wouldn’t call it “multitasking.” But I guess that makes me old school.

At any rate, Mr. Wolfe’s objective is not to pass judgment. His objective is to help managers better understand those under their control. And on this front, Geeks, Geezers, and Googlization is a useful too. I’d recommend this book to anyone in a position of authority over a multigenerational workforce.

Charles Sizemore, CFA

This book review was originally published in the March 2010 edition of the HS Dent Forecast.