Winter 2008

 

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Preparing for Generation Y

 

The need to attract and retain employees is a major concern for employers in Alberta and Saskatchewan. The resource economy has been very strong over the past few years and it has hired people who would have otherwise been employed by different sectors of the economy.

This trend will be worsened by the coming demographic shift. The Baby Boom generation is set to begin retiring in large numbers beginning in 2011, when the oldest Baby Boomers reach age 65. This will cause many companies to lose a sizable portion of their senior managers (and their experience) to retirement. This will cause a domino effect of Generation X people moving into management and Generation Y people moving into entry and mid-level positions in the organization.

 

There are disagreements about the exact boundaries of these demographic groups but Baby Boomers are generally thought to be born between 1946-1964, Generation X between 1965-1980, and Generation Y (or Millennials) between 1980-1995.

 

Employers are already finding that Generation Y employees are a different breed. They are not willing to spend a career trying to climb the corporate ladder. They will quit jobs and move from company to company as they pursue opportunities that are of more interest to them. Many people of this generation live with their parents for a longer period of time than previous generations have. This provides them with the financial security necessary to support such a nomadic career path.

 

This generation is used to having input and independence, which creates friction in companies with traditional top-down management structures. They want flexibility in their schedules to better accommodate work and lifestyle. They are comfortable with technology and they have difficulty understanding why companies use technology that is dated compared with what they use at home.

 

The different expectations and needs of these workers can create friction with workers of older generations. Companies with cultures that are not a good fit for the wants of Generation Y workers, may find they have a high turnover rate among this group. All of these issues can lead to poorer performance of the company’s workforce, which will likely lead to reduced company profit.

 

The response that has been taken by some multi-national companies to address the different attitudes of Generation Y workers has been to offer a wide variety of perks and pay incentives. A recent New York Times article discusses the perks that some law firms are offering to retain their younger employees. These can include lifestyle items as rewards instead of money. Some firms are giving away flat panel televisions, iPods and sports tickets. One firm even offers pet insurance.

 

Some of these companies think that by offering these perks and by getting creative with the way they pay bonuses to employees, they are creating a strategy to deal with the needs of these new workers. As well intended as these actions are, they are not strategy, they are merely tactics. Strategy implies an overall plan designed to deal with a particular problem. Tactics are the steps in this plan or strategy that help to achieve the larger goal. In order for a company to be successful, it must have a human resources strategy that is aligned with the company’s goals and the vision of its leadership. The innovative tactics discussed above can be useful in implementing the strategy but by themselves and without a larger plan, they are only band-aid solutions.

The question becomes, “How do I create a human resources strategy that satisfies the needs of my workers of all generations while most effectively meeting the goals of the business?” There is a small cottage industry of experts that have been creating books and materials aimed at -->

 

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