Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES
Recognizing Multigenerational Workforce Challenges and
Opportunities in Relation to Successful Business Strategy
Diana Klybert
Colorado State University
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Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES
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Abstract
Workforce dynamics, generational diversity and worldwide demographics are coming together in
the perfect storm of human capital development or dismantlement. Company directors who can
make and work a plan to harness the energy of multigenerational human nature will ride a rising
tide of success. Those who ignore the shifting winds of change may find their ships of industry
off course and carrying a mutinous crew. Leaders who view employees as a priority asset will
recognize both the important challenges and rare opportunities that present themselves as
Veteran (those born before 1946), Baby Boomer (born between 1946 and 1964), Generation X
(born between 1965 and 1980) and Generation Y or Millennial (born after 1980) workers come
together for the first time in U.S. history. Other key developed world labor forces are following
a similar demographic trend. Organizations can further increase their generational competence
by designing and adapting training programs to meet the diverse needs of the four generations in
today’s workforce and marketplace (Seitel, 2005). This unique and rich blend of workers offers
the latest technical skills and decades of practical work experience but all must learn to co-exist
cooperatively. Workforce training that reaches beyond job skills to facilitate workplace respect
and mutual understanding will prove key in developing effective multigenerational dynamics.
By creating a purpose-built collaborative culture, a company can rely on its strong foundation to
reach a unified common vision, successfully fulfill the business mission and achieve higher
goals. This paper will consider the shifting U.S. and global demographics that bring
multigenerational workforce issues to the forefront, identify characteristics and stereotypes of the
Veteran, Baby Boomer, Gen Xer and the Millennial generations, explore generational
perspectives, challenges and opportunities and introduce the concept of generational competence
as it relates to successful business strategy.
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES
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Recognizing Multigenerational Workforce Challenges and Opportunities in Relation to
Successful Business Strategy
As the country’s pool of skilled labor is projected to fall short of increasing labor
market demands in many industries, companies must strive to reach every skilled employee and
potential new hire and increase talent retention by recognizing and addressing multigenerational
expectations and working styles. Training goals must facilitate understanding and
communication among all generations to increase productivity and produce desired results.
Those workforce educators and business leaders exposing themselves to the generational
perspective, workplace factors and the varied scenarios that lie ahead can play a crucial role in
directing their companies through unprecedented change in human capital dynamics.
In subsection one, a look at global demographics delivers the one-two punch of declining
fertility rates in much of the developed world and simultaneous increasing life expectancy,
creating a scenario that has caught the attention of the most forward looking companies. While
only a small percentage of human resource departments have actually researched their own
company’s generational demographics, many have realized the need to retain older workers
while increasing their ability to recruit and engage Gen Xers and Millennials, a smaller pool of
younger workers that will not be able to replace retiring Veteran and Baby Boomer workers.
Subsection two characterizes the four workplace generations, their work preferences,
differences, motivations, stereotypes, challenges and the benefits employers can reap by
facilitating an environment in which all workers can learn from one another.
Subsection three looks at some adaptations that companies are considering in order to
increase their generational competence for the benefit of all.
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES
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Shifting demographics
Changing components of our national and global populations will have a direct effect on
workforce training and business strategies worldwide, over the next decade especially. As the
U.S. population is maintaining stable population levels with a national fertility rate of 2.0
births/female, both Germany and Japan are experiencing fertility rates of only 1.3, which
indicates a decline in population (Council for Gender Equity, 2007). Other countries such as
Canada, China, Russia and Australia are also experiencing a similar decline. At the same time,
life expectancy is increasing. By 2017, workers in the U.S., Canada, France, Germany, Japan,
Italy and the U.K. aged 50 and older comprise more than 40 percent of the workforce and will be
poised to retire in large numbers within the next 10 years (AARP Profit from Experience, 2007).
As U.S. workers grow older, the numbers speak for future workforce concerns. The median age
of the U.S. labor force in 2008 was 40.7, the oldest in national history. The historical U.S.
workforce benchmark for 55 and older was 15 percent but is currently at 18 percent. Every day,
7,918 Baby Boomers turn 60 years old. Those workers ages 25 to 34 (older Millennials and
younger Gen Xers) however, shrank by almost nine percent between 1996- 2006. As increasing
number of retiring employees leave their organizations after decades of work experience and
without an equal number of qualified workers to replace them, knowledge transfer between
generations will play a critical role in effective multigenerational workplace training and
communications (Institute for the Future, 2003).
Another demographic trend shows the labor force growing more slowly. In 2010-2015
the labor growth rate will slow to 1.0 percent and between 2015-2025 it will slow to 0.2 percent.
By 2012, there will be a six million person gap between supply and demand of U.S. knowledge
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES 5
workers. Educational achievement trends play heavily into the available supply of skilled
workers. The country’s colleges graduated only 198,000 students to replace 2,000,000 Baby
Boomers that retired between 1998 and 2008. Today 85 percent of jobs require education beyond
high school, compared to 61 percent in 1991. In 2012, 14 million jobs will go to degree holders.
Sixty percent of future jobs will require training that only 20 percent of the current workforce
possesses. And those participating in today’s workforce are showing up in numbers that reflect a
new diversity. More women are working today than in the past. Nearly 62 percent of women are
participating in the labor force in 2008 and almost 60% of bachelor’s and master’s degrees in the
U.S. are awarded to women. Demographic statistics also show that nearly one-half of all U.S.
workers entering the workforce during the past decade are foreign born (U.S. Department of
Labor, Bureau of Labor Statistics).
The issues listed above are some of the many demographic factors that point to
the need for collaboration and understanding as employers seek to retain experienced older
workers while attracting the best and the brightest of those newer to the labor market.
According to the Boston College Center on Aging & Work, most organizations are still in the
very early stages of formulating an organizational response to demographic shifts. The Center's
National Study of Business Strategy and Workforce Development (a study of 578 organizations)
found that only 9.7 percent of the employers in their sample had made projections about
retirement rates of their workers to a "great extent" and only 12 percent had analyzed their
workforce demographics to a "great extent." One-fourth reported that their organizations had not
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES 6
analyzed the demographics of their workforces at all (2007). The work of learning about workers
is just beginning as businesses must educate themselves quickly and effectively about how to
reach and attract, engage and retain as many skilled workers as they can, as fast as they can.
Four generations at work
The biggest service workforce training programs can provide to multigenerational
workers is to foster understanding and respect among diverse workers. Human resource
professionals who can effectively guide employees through a collaborative process of learning
about each other and from each other can set a path for more effective communications and
productivity throughout their business. Table one below shows some generational descriptions.
Generation
Ages/Birth Years
Percent of Workforce
Work Perspectives
Veterans/Traditionalists
Ages 63-86,
born 1922-1945
10 percent
“Company loyalty” Believed
they would work for the
same company their
entire career.
Baby Boomers
Ages 44-62,
born 1946-1964
44 percent
“Live to work”
Believe in putting in
face time at the office.
Women enter the workforce
in large numbers.
Gen Xers
Ages 28-43,
Born 1965-1980
34 percent
“Work to live”
Believe that work should not
define their lives. Dualearner couples become the
norm.
Generation Y,
Millennials
Ages 8-27,
born 1981-2000
12 percent
“Work my way”
Devoted to their own careers,
not to their companies.
Desire meaningful work.
(adapted from Marston, Working Mother Magazine, 2007)
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES 7
While it may be tempting to over-use generalizations such as those shown in workforce
perspectives in Table One above, these concepts are more of an attempt to categorize some
aspects of each group’s researched behaviors, needs and working preferences in an attempt to
build cohesive relationships within a company. It’s important for managers and co-workers to
recognize that individuals within each generation may view themselves more in a context of their
responsibilities within an organization or their stage in life.
An example of a global company meeting the generational workforce issue head on is
Deloitte LLP, one of the Big Four accounting and consulting firms with several lines of business
and advisory services. In the U.S. alone the company has offices in about 80 cities and generated
$9.8 billion in combined revenue in 2007. W. Stanton Smith, Director of Next Generation
Initiatives at Deloitte, recently authored Decoding Generational Differences: Fact, fiction…or
should we just get back to work? (2008). His book is part of a series of internal executive
briefings that aims at understanding and benefiting from the generational diversity of its 37,000
U.S. workers. Deloitte has good reason to be a leader in this effort as two-thirds of its customerserving business consultants are age 35 or younger. Smith’s title reflects an emerging business
strategy at Deloitte to recruit and develop a new generation of business consultants and
accountants (Kranz, 2008).
In his book, Smith and his research team at Deloitte share the discovery of three main
dividing lines that distinguish the four generations at work within the company. Primarily, the
younger Gen Xers and the Millenials show heavy reliance on technologies, have unique attitudes
about how and when work gets accomplished and rewarded and present a consumer mind-set, in
which they expect employers to demonstrate exceptional interest in their professional growth.
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES 8
Smith says these younger employees expect constant challenges and stimulation, which requires
the organization’s management to learn new ways of coaching, mentoring and communicating
expectations. Leaders take on the major responsibilities for facilitating employee learning among
diverse generations at Deloitte. They must work toward addressing possible negative stereotypes
that senior workers might apply toward younger co-workers.
"Some of our partners look at our younger employees as slackers who don’t want to work
as hard as they did,” Smith says. “The fact is that [younger employees] grew up in a very
different world, and it’s unreasonable to expect them to behave the way people did 30 or 40
years ago."
As much as the changing society has influenced the technical proficiency and attitudes of
those younger workers, economical developments and the desires and needs of older workers
have created new views of retirement and work in general, thus making working past the
traditional retirement age more acceptable as the norm (Arnone 2006). Stereotypes in the
workplace today regarding older workers can surface, with descriptive such as those older
workers lacking flexibility, resisting new technology and unwilling or unable to learn new skills
(Lord & Farrington 2006). Mary Ballas, a 63-year-old Staples employee and ex-retiree, refuted
these claims in a February 2007 personal interview, explaining that older workers such as her are
more than willing to adapt to changes in the workplace but simply need extra guidance to
understand new technology (Kranz, 2008).
While opinions may differ between journalists, consultants and researchers as to what
degree of tension in the workplace may be a direct result of the blending of four generations,
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES 9
nearly 60 percent of human resource managers at large companies say they have observed office
conflicts that flow from generational differences. Generational tensions typically stem from
differing perceptions of loyalty and respect ( Boston College Center on Aging & Work, 2007).
According to Frank Giancola, a retired human resource practitioner and college lecturer
who devotes his time to writing articles that analyze human resource trends and practices, “Even
though the generations are different, it does not necessarily mean they hold divisive values and
attitudes that will affect their ability to work well together” (2006).
Research suggests that the most effective way to address generational differences rests in
sharing information and communicating responsibilities in multiple ways, especially accounting
for the technological savvy of younger workers and the more formal communication preferences
of older workers (Miller, 2004). The benefits of investing in more effective communication
styles per the needs of each generation will pay off in knowledge transfer, mentoring and
motivation, crucial pieces of organizational strategy prior to businesses signing off on valuable
employees choosing to retire. In a 2003 study by Feinsod and Davenport (2006), workers aged
55 and older scored seven points higher than the youngest demographic aged 18-29 in regards to
employee motivation. Younger workers also showed that they were more likely to become
disengaged with their employer; only eight percent of workers aged 29 and younger described
themselves as highly engaged on the job versus 22 percent of workers aged 55 and older. It is the
aim of human resource professionals to determine how older workers can impact the opinions
and attitudes of younger workers towards their work, especially in regards to worker motivation.
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES 10
The good news for multigenerational workforce stakeholders is that ultimately those
encompassed in the various parameters of each generation are more alike than different in
what they seek from time spent at work. Deloitte’s Smith points out that there are many opinions
on the topic but less actual understanding. His company recognizes what he has coined the 3 Rs
and the 3 Cs of what all the generations want. Employees want to be Respected, Recognized, and
Remembered, and Coached, Consulted, and Connected (Kranz, 2008).
Jennifer Deal, Ph.D., is a research scientist at the Center for Creative Leadership
(CCL) and author of Retiring the Generation Gap: How Employees Young and Old Can Find
Common Ground (2006). Her past seven years of researching more than 3,000 corporate leaders
has led to a similar conclusion of more alike than different. In her book, she deducts that
essentially all the generations have similar values. Family tops the list and they all want respect
and leadership they can trust and look to for effective coaching. Generational differences show
up in how workers demonstrate respect, offer and receive feedback, and prefer to learn.
Business strategy and generational competence
“The knowledge, skills and workplace attributes possessed by today's multi-generational
workforce present multiple challenges and opportunities to business leaders. Smart employers realize that
one of the keys to growing and succeeding in an increasingly competitive global marketplace is recruiting
and managing talent drawn from workers of all ages. Leading -- and successfully managing -- an intergenerational workforce is becoming a business imperative that few organizations can ignore.”
Society for Human Resource Management (SHRM) Knowledge Center Website: Generations Toolkit.
The term called generational competence describes the adaptations that organizations
must make in order address the varied working styles, expectations and talents of the blended
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES 11
generational workforce as well as in the increasingly competitive global consumer marketplace
itself (Seitel, 2005). Delivering workforce training that helps employees learn to bridge
generational differences more effectively can assist with existing generalizations that can reduce
organizational creativity and productivity. Employers are beginning to identify what motivates
each generation and to design effective management tools geared to minimize conflict and attract
and retain key talent, thus maximizing their human capital development goals.
As an example of a company intent on increasing its generational competence, Deloitte is
adopting an offense-is-the-best-defense strategy, a major component of which Deloitte calls
"mass career customization." Using a website featuring a series of interactive exercises and
online resources, employees are urged to envision their careers and professional options
available to them.
Together with their managers, Deloitte’s workers are given an opportunity to imagine
their careers on four different dimensions: their current role, the pace at which they choose to
develop, the geographic location and/or types of future jobs, and their workload. Smith says
Deloitte doesn’t want to think of its employees merely as assets, but as human beings with goals,
preferences and aspirations. The program is paying dividends in the form of higher retention.
Each time an employee leaves, it costs Deloitte about $150,000 to recruit a replacement, based
on average annual salaries of $75,000. Since the 2002 launch of the Mass Career Customization
program, Smith estimates that about 1,000 employees have elected to stay at Deloitte who
otherwise would have left (Kranz, 2008), saving the company dollars that make sense.
Several industries facing the immediate loss of experienced and talented Veteran/Baby
Boomers are providing ways for older workers to use a phased retirement option or take
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES 12
retaining or attracting this new pool of skilled labor (those choosing to postpone retirement). The
Aerospace Corporation uses this option to allow older talented scientists and engineers to
continue working as employees or retired consultants with reduced schedules (Piktialis and
Morgan, 2002) (Piktialis, 2007). Other industries onboard with the flexible retirement and career
path innovation include healthcare, power, education and manufacturing.
Retail pharmacy chain CVS actively recruits older workers for entry-level positions including
pharmacy and photo-lab technicians and offers them part-time, flexible positions with a twist.
Those “snow birds” who would like to spend winter in one location and summer in another may
choose the option of working for the same employer, moving from one store to another in the
same chain.
Germany’s Deutsch Bank AG uses inter-generational teams to bridge generational
divides and overcome age biases. The company creates project teams that intentionally mix
younger and more experienced employees. This cross-learning is actively facilitated by team
managers. John Deere and Company in the U.S. also uses this multigenerational team concept
strategically. The manufacturing company relies heavily on project teams and finds that the
mixed teams are effective in transferring key knowledge from one age group to another (Boston
College Center on Aging & Work, 2007).
Ernst & Young LLP developed workshops focused on fostering leadership skills across
generations to help promote understanding and teamwork among its multigenerational
workforce. The employee training taps into emotional intelligence to explore the values of each
generation. General Mills invented a board game called "Leading Through the Generations" to
encourage dialogue among coworkers and consider the distinct work and communication styles
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES 13
of coworkers. Managers learn that it’s acceptable and even valuable for coworkers to have
different methods for getting the job done. Employees learn about flexibility and accomplishing
tasks using an individual’s own framework (Boston College Center on Aging & Work, 2007).
The use of company surveys and focus groups by can help identify the expectations and
needs of an organization’s workforce. Employees’ daily nourishment provides one example.
While Veterans were content to bring bag lunches from home, some organizations are now
offering gourmet on-site food choices to keep workers engaged and energized.
Organizations are also appealing to the highly involved parents of Millennials through
“Take your parent to work days” (Goodman, 2007). Some Asian companies are developing
relationships with university professors, as students who revere their authority figures will often
take their recommendation for where to work following graduation.
These examples are just a few of the innovations that some organizations are
incorporating to reach out to each generation of workers. Each plays a key role in a successful
future, not only for businesses and employees, but also in the ultimate health and welfare of
both national and global economies that rely so heavily on thriving business and industry. When
considering the impending high-powered mix of factors involved in this world-wide workforce
issue, the number of possible scenarios brewing could truly be likened to the chance of
coming weather. But as with a well-designed sailing ship, if a seasoned captain is in tune with
the signs of the sea, tilts her eyes to the sky and relies on all the knowledge and experience she
has gathered, good decisions can be made early, the right sails set and the course altered to best
take advantage of the coming breezes, however strong. If her crew is with her and her command
is strong, all can arrive safe in port with stories to tell, after an exhilarating and memorable ride.
Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES 14
Deal, Jennifer, Ph.D., (2006). Retiring the generation gap: How employees young and old can
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Running head: RECOGNIZING MULTIGENERATIONAL WORKFORCE CHALLENGES 15
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