GLOBALNOVATIONS. Four key questions about employing four generations. Lindsey Schantz, Perry Alter, and Russ Macbeth

Transcription

1 GLOBALNOVATIONS Four key questions about employing four generations Lindsey Schantz, Perry Alter, and Russ Macbeth

2 Global Novations. All rights reserved. Four Stages, Novations, and Novations Group are trademarks of Global Novations, LLC. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without prior permission of Global Novations, LLC, 10 Guest Street, Suite 300, Boston, MA USA GN402.01

3 At over seventy million strong, the arrival of Generation Y has transformed the workplace. Consequently, organizational leaders already challenged by an unparalleled level of employee diversity must now find ways to develop a workforce that also spans four generations. Generation Y: The newest workplace generation Generation Y, also called the millennials, is made up of people born between 1981 and As with all generations before them, Gen Y has defining characteristics. This cohort of young people expects to be taken seriously and desires instant feedback. Raised with access to unlimited information, via cell phones, the internet, and PDAs, Gen Y is technologically savvy, wellconnected, and able to efficiently multi-task. In addition, the cohort is well educated, perceives that it has experienced lots of success, and is impatient for this success to continue in business. The challenge created by the addition of Generation Y has caused organizations to react to its arrival with a mixture of excitement and apprehension. The excitement is a result of the potential that the highly educated and innovative generation brings to the table; the apprehension is a product of the realization that Gen Y employees expect advancement, flexibility, and career options. Whether organizations lean toward feelings of excitement or apprehension in planning for the newest generation, one thing is clear. Says CEO Paul Shain of CDW Berbee 1, Gen Y is changing the rules. Boomers 36% Gen Y 16% Gen X 45% Percentages shown as of 2006 Matures 3% Figure 1: Four Generations in the Workforce 2 Defining The Multigenerational Workforce Gen Y born between Gen X born between Boomers born between Matures born before 1945 GLOBAL NOVATIONS, All Rights Reserved 3

4 Examining a changing workforce How is Gen Y changing the rules and what do these changes mean for organizations looking to attract and develop the best workforce in an increasingly competitive market? To answer this question Novations, a global talent development firm, partnered with several leading client organizations to study employee development and contribution in today s business world. To date, over 500 managers and direct reports from within eight organizations have participated in the research. Participating managers were asked to rank their direct reports in terms of contribution. By completing a competency-based survey about each direct report, these managers were also asked to assess the primary type of contribution their direct reports make. The direct reports were asked to complete the same survey, assessing their own types of contributions. (Please see Appendix A for a complete listing of survey items.) Because of its unique ability to provide insight on the behavioral contributions of employees, the Four Stages of Contribution model was used as the foundation for the current research. The Four Stages of Contribution model is based on 30 years of research and provides a roadmap for employees on how to increase their impact and influence as they move through their careers. According to the model, there is a direct correlation between a person s stage and his/her contribution to the organization. This correlation means that employees in later stages are having a greater impact on a larger part of their organizations. Employees can move through as many as four stages, as outlined below, although organizational needs and employee goals affect movement between and within the stages. Stage Related Behaviors Stage 1: Contributing Dependently Willingly accepts supervision; Demonstrates competence on a portion of a larger project; Learns how we do things Stage 2: Contributing Independently Relies less on supervision; Works independently and produces significant results; Assumes responsibility for definable projects Stage 3: Contributing Through Others Participated as a manager, mentor, or idea leader in developing others; Stimulates others through ideas and knowledge; Represents the organization effectively to clients and external bodies Stage 4: Contributing Strategically Represents the organization on critical strategic issues; Provides direction to the organization; Exercises power to influence decisions or obtain resources Four key questions Combining Novations research findings with current trends, we address four questions below that organizations need to consider in order to effectively leverage the strengths of four generations of employees. These questions are: Should an organization change for any one generation? Is Gen Y s job-hopping a bad thing? How are the generations different in terms of contribution? How does Novations believe an organization can meet the diverse needs of multiple generations? 4 GLOBAL NOVATIONS, All Rights Reserved

5 Question 1: Should an organization change for any one generation? A Boomer employee recently said about the attention being paid to Gen Y that, (he) doesn t really care what millenials want I hope their sheer volume doesn t cause the rest of us to mistake how much we should change for one group. This frustration is common among employees, and is partly due to the attention Gen Y has received. Is the attention warranted? If one cohort was contributing more than others, focusing on meeting the needs of this group might make good business sense. But, does data suggest that any one generation is, in fact, contributing significantly more than others? The Novations Four Stages of Contribution research data set indicates that the answer is no. Instead, the research shows that employees from every generation are valuable resources to their organizations. More specifically, when managers ranked employees in terms of their contribution to their organizations, the top third of contributors was comprised of employees from all four generations. Generation Percentage of Generation in Top Third Contributors Generation Y 14% Generation X 52% Baby Boomers 29% Matures 5% Because high contributors are represented by all generations, it would be difficult for organizations to change to meet the needs of the highest contributors from any one generation. Perhaps, then, organizations would be better served by focusing on employees who are, at first glance, most in need of development those in the bottom third of contributors? Unfortunately, this group does not provide an easy solution to the challenges presented by multiple generations either. Managers rankings of their direct reports indicated that the group of employees currently dependent on others for success (Stage 1) also includes all generations. The fact that a large number of employees from all generations are rated as being dominantly in Stage 1 may come as a surprise to some. It would have seemed reasonable to predict that Gen Y, given the cohort s relative lack of experience, would comprise the majority of the employees in this stage. However, the data clearly demonstrates that at least some Gen Y, Gen X, and Boomer employees perform the majority of their tasks in a dependent manner. (A limited sample of Mature employees prevents us from analyzing this cohort in greater depth; additional data is being collected.) Note: This table includes valid percentages. Valid percentages mean that the data above includes only participants who responded to the age demographic question and whose managers rated them as part of the top third of contributors. GLOBAL NOVATIONS, All Rights Reserved 5

6 70 organizational success so long as they meet the Percent of Stage 1 Population % Data from Four Stages Research 39% 35% Gen Y Gen X Boomers particular needs of the organization. However, employees in Stage 1 generally require more internal resources to complete their work. As organizations are expected to do more with fewer employees, it becomes increasingly important that employees develop beyond Stage 1. When this development occurs, and an employee is able to perform his or her responsibilities independently, co-workers can spend less time providing support and a greater amount of time contributing in more substantial ways. Figure 2: percent of each generation in stage 1 While the reason for the high percentage of Stage 1 employees is not entirely clear, a few factors are important to consider. First, as is common in today s business world, many of the participating organizations recently experienced mergers or structural changes. Therefore, a good number of participants completed the survey at a time when they were new to their positions and would be expected to be in learning mode. One would hope that a similar analysis completed a year from now would show a significantly decreased percentage of Stage 1 employees in these organizations. In addition, while job-hopping will be the focus of Question 2, the fact that many participants had recently shifted positions could also explain why many were rated as being dependent on others for success. Again, a repeat assessment would help illustrate how effectively, and quickly, the current workforce was able to develop into individual contributors (Stage 2). It is important to remember that because an employee is in Stage 1 does not mean he or she is not a valuable contributor. All types of contributions are valuable and necessary to Because there is not a simple solution for how to effectively develop a multi-generational workforce, the answer to our first question is no, an organization should not change for any particular generation. Why? Organizations that focus on any one generation run the risk of alienating employees from other generations who are critical to success. Instead, organizations need to understand, through behavioral assessments, the strengths and challenges the workforce as a whole faces. While there will certainly be differences between cohorts, there will also undoubtedly be a number of similarities among the groups. Organizations can use such behavioral assessments to inform training and development decisions in an effort to nurture all employees, apply their strengths, and improve on their weaknesses according to the goals of the organization. Question 2: Is Gen Y s job-hopping a bad thing? Job-hopping, the practice of switching jobs many times in a short period of time, has come to be expected behavior from Gen Y employees. However, is the portrayal of Gen Y as a group 6 GLOBAL NOVATIONS, All Rights Reserved

7 of impatient young people constantly shifting positions a fair one? Our current data set indicates that on the whole, Gen Y employees are indeed switching positions, but that they are not alone. While Gen Y respondents had, on average, switched jobs 2.13 times in the last three years, the behavior was prevalent among all generations (a limited Mature sample prevented the analysis of trends on this cohort). Gen X employees reported holding 2.04 jobs over the past three years, and even a number of Boomers, known for their loyalty to organizations, reported holding more than one job in the last three years. Mean Number of Positions Figure 3: three years Gen Y Gen X Boomers GLOBAL NOVATIONS, All Rights Reserved Data from Four Stages Research 1.51 Mean number of positions in the last Note: Responses were given to a question that asked, How many different positions, both within this organization and, if applicable, within other organizations, have you held in the last three years? We acknowledge that job changes can be due to a merger, or other structural change, and that not all changes occur by choice. Despite the widespread existence of jobhopping, the behavior still conjures up negative emotions from organizations that have long associated retention with success. However, does job-hopping actually have a negative impact on employee contribution and/or development? Are we sure it is necessarily a bad thing for organizations? Or, does changing jobs have the potential to facilitate development and create opportunities for growth? The potential value in shifting jobs becomes clear when one considers that employees rated as being in the top third of contributors in the current research held, on average, 1.51 jobs over the past three years. In other words, those contributing the most switched jobs, on average, more than once in the past three years. And, these high contributors appear to have changed jobs while continuing to contribute at a high, if not a higher, level. As the trend towards shifting jobs more often continues, it is important for organizations to understand how top contributors may have used this movement to their advantage. The idea that shifting job assignments can facilitate development is not new to Novations. In fact, previous Novations research examining the development of over 2,000 engineers and scientists from within six organizations found the most important factor affecting employees development was job assignment. Challenging and important assignments are the vehicle through which people learn the most and through which their credibility grows. Viewed this way, job changes provide opportunities to experience a wider array of assignments, thus facilitating not only more opportunities for development but also more diversified development. Thus, the jobhopping employee could, if given proper support, develop faster and better than the non-jobhopping employee. While respondents indicated switching jobs multiple times in the previous three years, many also indicated being with the same organization for more than two years. By job-hopping within 7

8 one organization, employees receive the growth opportunities and challenges associated with a new job, while organizations retain skilled employees. This creates a win-win situation for employees and organizations. Mean Number of Years Figure 4 Employed at Organization Employed in Position Gen Y Gen X Boomers job-hopping The need for continuous development has been around for some time. However, the balance of power seems to have shifted, as employees from all generations are more than willing to leave their organization to find challenging assignments elsewhere if they are not presented with such opportunities in their current position. This is not, as many often believe, only an issue for Gen Y employees; organizations need to provide job rotations and ongoing development opportunities for as many employees as possible. Job-hopping can have noteworthy benefits, assuming organizations create opportunities for these shifts and/or rotations to occur internally. Question 3: How are the generations different in terms of contribution? The contribution model used in the current research enables us to take a closer look at just how each generation is contributing. While we know the contributions of each generation are vital to organizational success, how do the contributions of the average Gen Y employee differ from those of the average Boomer? To understand the skills each cohort brings to the office, let s begin by examining the breakdown of each generation by dominant stage. Dominant stage refers to the stage most frequently selected by managers to describe specific competencybased behaviors. For example, a Stage 1 person is defined as such if his or her manager rated the majority of his or her behaviors as being performed in a Stage 1 manner. As stated earlier, we do not currently have a subset of Matures that enables us to discuss this cohort in much depth. (See chart, Stage Related Behaviors, on page 4 for a review of the behaviors associated with each contribution stage.) With 57% of Gen Y employees rated by their managers as Stage 1 dominant, this cohort clearly has the largest percentage of employees dependent on others for success. 40% of Gen X and 35% of Boomers are also Stage 1 dominant. We briefly discussed potential reasons for the overall high percentage of Stage 1 employees when responding to Question 1. Please refer to page 6 for details on the potential effect of mergers and changes in organizational structures. Interestingly, the percentage of independent contributors (Stage 2) increased with age. Boomer employees clearly had a strong presence 8 GLOBAL NOVATIONS, All Rights Reserved

9 70 60 Percentage of Generation Stage 1 Stage 2 Stage 3 Stage 4 0 Gen Y Gen X Boomers Figure 5: generation by stage of contribution in Stages 2, 3, and 4, suggesting that this cohort experienced success in developing beyond contributing dependently. The increased number of developmental opportunities associated with having more years of business experience partly explains the differences between Boomers and Gen Y s ability to contribute through others and to contribute strategically. However, Novations research wanted to understand how greater experience and time in business enabled Boomers to contribute in a more effective way. By contrasting the contributions of Boomers and Gen Y, two cohorts often used to illustrate the obvious differences between generations, we begin to understand what types of behaviors distinguish the two generations. As outlined in the following table, Boomers were uniquely able to contribute through others (Stage 3) in the following ways: prioritizing, seeking and providing feedback, respecting others differences, building trust, and valuing and pursuing on-the-job learning activities. Less than a quarter of the Gen Y cohort was able to display the same types of behaviors. How Boomers are able to contribute through others; how Gen Y is not Competency Specific Behavior Planning and Organizing Prioritizes Develops Capability Seeks and provides feedback Values Diversity Respects others differences Relationship Building Builds trust Learning Predisposition Values and pursues onthe-job learning activities Note: At least 25% of Boomer employees performed the competencies listed above in a Stage 3 manner. Less than 25% of Gen Y employees were able to perform the same competencies in a Stage 3 manner. Rather than abstractly discussing how Gen Y employees need to develop to increase their impact, this data helps pinpoint specific areas where Gen Y employees should seek out developmental opportunities. For example, a Gen Y employee who wants to increase his or her contribution learns through this data that successful Boomers show the ability to prioritize and to seek and provide feedback. This type of information can be used to inform GLOBAL NOVATIONS, All Rights Reserved 9

10 future developmental plans, job assignments, and training programs. A similar type of internal assessment can help organizational leaders understand which competencies are uniquely important to success at their organizations. This information can not only help inform developmental opportunities for employees who are already part of the organization, but the increased insight could also affect the criteria used to make hiring decisions. Question 4: How does Novations believe an organization can meet the diverse needs of multiple generations? If you were to ask the average Boomer employee how he or she would define the perfect job, what do you think you would hear? Would Boomers responses be different from Gen Y responses? While much has been made of the distinct characteristics of each generation, often overlooked are the similarities that most employees share. The older generations want flexibility, and the younger ones do too, Melanie Holmes, Vice- President of Manpower said, to describe the similarities. Everyone wants meaningful work. And [ ] the opportunity to give back to the community we use that and it works. So what does this mean for organizations? How can organizations possibly deal with four generations of employees who share some needs and do not share others? Rather than treating generational cohorts as intact groups, organizations must find ways to meet the unique needs of each individual. Generations add an additional layer of diversity to a group that was already heterogeneous in terms of gender, race, religion, ethnicity, sexual orientation, and geography. The needs of any two Gen Y employees, or any two African-American employees, or any two female employees are likely to differ in some ways and are likely to be the same in other ways. What will be consistent is the expectation that each employee will be supported in a way that reflects his or her uniqueness. A regular development conversation with a manager or mentor is one way of ensuring all employees are positioned for success. While Gen Y employees enter the workplace expecting frequent feedback, Novations research findings suggest that all generations would benefit from regular development conversations. That is, analyses indicate there is a fairly large discrepancy between managers ratings of their direct reports dominant stages and direct reports ratings of their own dominant stages. Overall, direct reports rated their dominant stage significantly higher than their managers rated them. Is this discrepancy due to managers not having the time or ability to notice and understand the day-to-day behaviors of their direct reports? Or, are direct reports not clear on the types of behaviors they need to display (or how they need to display them) to increase their contribution? More than likely, both of these come into play. Interestingly, receiving regular feedback may have the potential to positively impact Boomers more than the cohort most known for its need for feedback, Gen Y. Boomer employees had the largest percentage of respondents who rated themselves differently than their managers, while Gen Y employees had the smallest percentage 10 GLOBAL NOVATIONS, All Rights Reserved

11 Manager Rating Managers ratings of their direct reports Direct Report Rating Direct reports ratings of themselves % 41% 40 44% Percent Percent % 10 16% 10 14% 9% 0 3% Dominant Stage Dominant Stage Figure 6: Manager rating vs. Direct Report rating of contrasting ratings. The difference could be due to the fact that Gen Y employees are new to organizations and, therefore, largely have less complex roles. However, it also seems possible that the newest cohort is more comfortable seeking out and using feedback to accurately gauge their own contributions. Percent of respondents within each generation who rated themselves in a different stage then their managers rated them Gen Y 19% Gen X 27% Boomers 33% Regular development conversations and ongoing feedback will help supply the individualized attention each employee needs to synchronize his or her contributions with what his or her manager wants. Despite the additional work this creates for managers, meeting the individualized needs of each employee will benefit the organization in the long run by ensuring all employees are focused on meeting organizational goals. Six takeaways on four generations Throughout the previous four sections, we have covered a lot of information and discussed a number of interesting research findings. What have we learned? 1. Gen Y, Gen X, Boomer, and Mature employees are represented in both the group of top contributors and the group of contributors most in need of development opportunities. Organizations that focus solely on any one generation, such as Gen Y, run the risk of alienating employees from other generations who are equally critical for success. 2. Employees from each generation are dependent on others for success (Stage GLOBAL NOVATIONS, All Rights Reserved 11

12 1 dominant); organizations would benefit from accelerating the development of these employees so they exhaust fewer internal resources. 3. Frequent and behaviorally-based assessments will help organizations meet the unique development needs of each generation and the overlapping developmental needs of the entire workforce. 4. Employees from all generations are shifting jobs. In order to simulate the benefits of jobhopping, while continuing to develop the best talent internally, organizations should consider rotating job assignments and providing frequent development opportunities. 5. The common behaviors among highcontributing Boomer employees, which enable this cohort to impact organizations at a larger scope than Gen Y employees, include: prioritizing, seeking and providing feedback, respecting others differences, building trust, and valuing and pursuing on-the-job learning activities. 6. Discrepancy exists between managers ratings of their direct reports and direct reports ratings of themselves. Managers believe their direct reports are contributing at a lower stage than direct reports, themselves, believe they are contributing. Decreasing this gap through regular development conversations and personalized feedback is important if employees are to develop in line with organizational needs. The range of topics covered in the takeaway points accurately depicts the difficulty of the challenge organizations face. Developing a diverse workforce that spans four generations is a challenge, however, that organizations can no longer afford to overlook. As modern organizations are asked to do more with fewer employees, business leaders must find ways to maximize the contributions of all employees. While the challenges are great, the benefits of meeting these challenges are equally great. And, meeting the challenges may very well distinguish organizations that will remain successful in the coming years from those who will not. Endnotes 1. Reference for Paul Shain quote and Melanie Wise quote. articles/4612/ 2. Figure 1: Four Generations in the Workforce originally published in the 2006 American Community Survey by the U.S. Census Bureau How do you stack up? Responding to the 20 multiple choice questions within the Four Stages Profile will enable you to: a) understand how you currently contribute to your organization, and b) learn how to increase the impact of your contribution. Accessible via the Global Novations e-store ( for a nominal fee, the survey takes approximately 10 minutes to complete and requires no long term commitment. 12 GLOBAL NOVATIONS, All Rights Reserved

13 Appendix A Four Stages Survey

14 Appendix A: Four Stages Survey Q1.A: Learns from experience Q6.A: Seeks and provides feedback Q1.B: Values and pursues on-thejob learning activities Q2.A: Works within organizational culture Q6.B: Develops self and others Q7.A: Utilizes different perspectives Q7.B: Respects others differences Q2.B: Understands and manages sources of power, information, and influence to accomplish work Q3.A: Demonstrates technical knowledge Q8.A: Effectively persuades others in the organization Q8.B: Builds influence through credibility Q9.A: Networking capabilities Q3.B: Learns/grows in technical areas Q4.A: Prioritizes Q9.B: Builds trust Q10.A: Understands organization s value proposition Q4.B: Manages time and resources efficiently Q10.B: Keeps up with relevant developments Q5.A: Works in a way that supports organizational goals Q5.B: Views work from a big picture perspective GLOBAL NOVATIONS, All Rights Reserved iii

15 GLOBALNOVATIONS About Global Novations Global Novations helps the world s leading organizations unleash the capacity of their people. We offer a holistic suite of services around talent optimization, diversity and inclusion, and market optimization. Accelerate the achievement of your business objectives with a targeted solution from our consulting, training, measurement, and interactive learning experts. To find out more about our capabilities, visit our website at or call us at for more information. GLOBAL NOVATIONS, All Rights Reserved