Challenges FaCing gen Y - Philippine Institute for Supply ...

Challenges
Facing Gen Y
By Mary Siegfried
The first wave of Generation Y workers entered
the business world about 10 years ago amid high
expectations for this well-educated, multitasking,
digital-savvy group that was taking its place alongside
three other diverse generations. Today, however,
discussions about Generation Y — broadly
those between ages 18 and 30 — focus on a generation that
has been battered by record-high unemployment, a sluggish
economy and an aging work force ahead of it that is slow to
move on.
Some of the older Generation Y workers have made
their mark in the business world; in fact, many have done
quite well since they entered the work force at the turn
of the 21st century. Many companies today are focusing
on ways to retain and engage Generation Y workers. But
the economic conditions “have made it incredibly difficult”
for the youngest members of Generation Y, those
24 and under, to take their place in today’s global business
economy, says Jennifer J. Deal, Ph.D., senior research scientist
for the Center for Creative Leadership in San Diego.
And when the job market finally picks up, those younger
Generation Y workers will be competing against the older
members of their generation, who will have experience on
their side. “It will create a bottleneck,” Deal predicts. “It is
a real problem because it appears there just are not enough
jobs out there.”
Unemployment has been high for today’s young
workers. The U.S. Bureau of Labor Statistics for June 2011
showed 14.5 percent of people ages 20 to 24 are out of work,
and an unemployment rate of 9.6 percent for those ages 25
to 34, both above the overall jobless rate of 9.2 percent.
Economic conditions hamper
Generation Y as it seeks to
find its place in the work
world.
Changing Expectations
Deal says the economic downturn has taken its toll
on Generation Y in different ways. For example, college
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Challenges Facing Gen Y
career service professionals report that
students’ career expectations have
changed in recent years. Many are not
optimistic about their job prospects
and are lowering expectations about
what to expect if they do find work.
“That does not mean they are not
going to ask for more when they have
a job prospect. They have been taught
by their baby boomer parents to ask
for everything they want,” Deal says.
“But what they ask for and what they’re
expecting are not necessarily the same
thing.” She adds that Generation Y may
become a generation that is consistently
underemployed.
Generation Y, also known as
Millennials, has been slow to gain
its economic footing, she adds. Deal
says there is substantial evidence that
employees who enter the work force
during a downturn experience a longterm
earnings impact. The reason is
simple — starting pay is usually lower
during a tough economy. A worker
may start at US$35,000 and receive a 3
percent increase each year, for example,
but that accumulates far less than if a
worker started out making $40,000 a
year. “It is cumulative, and over time
it means that those workers will likely
earn substantially less money than their
peers who start the same job at a higher
salary because they are entering the
work force in a better economy.”
Jeff Schwartz, principal for Deloitte
Consulting LLP in McLean, Virginia,
divides Generation Y into two groups.
He uses September 15, 2008, the fall
of Lehman Brothers, as the hallmark
of the recession and the financial crisis.
The pre-9/15/08 Gen Y workers
entered the workplace with significant
opportunities, and many of those
young workers were in high demand
and well-treated in the workplace.
The post-9/15/08 group “really got
slammed and hit the wall when they
entered the job market,” he says. In
fact, some are labeling this group “the
lost generation.”
On the Move
Companies, however, should not
assume their Generation Y employees
will stay put because of the slowly
recovering economy. In fact, Schwartz
says research shows that many Gen Y
workers are getting restless. “They have
done well and are glad to have jobs,
but they are really itching for a change.
And they’re looking for it either in their
Generation Y
Characteristics
Some general characteristics about
Generation Y include:
• They believe in a strong work-life
balance.
• They are generally comfortable
with diversity and globalization.
• Generation Y understands competition
because many faced stiff
competition getting into colleges,
for example.
• They are comfortable with trying
out new things, whether it is a new
product or a new job.
• It is a generation that enjoys
working in teams and expects to
be recognized for performance in
teamwork.
company or outside,” he says. “The
surveys we are doing show that the
turnover intentions of Generation Y are
very high. So if you have skilled young
people in your organization who you
think are keepers, you need to be proactive
in giving them a reason to stay,”
he explains.
Schwartz says he believes the second
half of 2011 is shaping up to be a “fairly
good” recruiting season for young
workers with critical skills such as engineering,
finance, supply management
and R&D. A Deloitte survey, Talent
Edge 2020: Blueprint for the New Normal,
found that high unemployment rates
in the United States and abroad have
not created the talent surplus many
predicted. For example, executives surveyed
predict talent shortages in R&D
and executive leadership — positions
which are needed to fuel innovation
and growth. He calls this the talent
paradox. “The challenge in the talent
market today is not the availability
of people who want to work, but the
availability of those with skills you need
at prices you want to pay,” he says.
X Comes Before Y
In addition to concerns about having
skilled employees available for jobs once
the economy strengthens, there also is
a complicated numbers game involving
talent and the generations, Deal says.
The baby boomers and Generation
Y are large generations, but tucked
in the middle of them is the smaller
Generation X, those born between
1964 and 1980. So while there are
plenty of Generation Y workers to take
over for baby boomers once they move
on, they can’t always leapfrog over
Generation X because they generally
don’t have the needed skills and experience
to do the work. It’s unlikely that
a 29-year-old is going to take over the
job of a 65-year-old baby boomer.
“So the business world will be
looking to Generation X to fill the
baby boomers’ places, but for every 10
boomers there are only nine Gen Xers,
so that is one place where there could be
a talent shortage,” she explains. “What
people are missing is the potential
problem of not enough workers with the
necessary experience to move into open
positions in the years ahead.” The positive
side of the equation for companies,
but lingering challenge for Generation
Y, is that baby boomers are not retiring
the way they were expected to, opting
to stay longer in the work force because
of the economic situation and simply
because they want to work longer.
Bridge the Gap
Despite the current challenging job
market, Generation Y eventually will
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fully take its place in the work world.
That’s why employers need to understand
Generation Y’s priorities, work
style and ways to attract Generation Y
workers around the world in today’s
global economy.
Schwartz says Generation Y is different
in both “fundamental and interesting
ways.” He calls them true digital
natives who learn and work differently
than the generations sitting next to them
in the workplace. “This is the generation
that grew up multitasking, but they
don’t see it as multitasking; it is just the
way they live and work.” They have
always been wireless and never tethered
to a desk, computer or phone. “So
depending on their jobs, they believe
they can work anywhere, anytime,” he
says. “There is a new normal around the
way Generation Y thinks of work.”
Deal says Generation Y is typically
well-educated — it has a higher
percentage of college degrees than
any generation before it. Gen Y also
understands the need to be continuous
learners. “Organizations that provide
time and financial support for continuing
education will be much more
attractive to the best and the brightest
of this generation,” she explains.
Compensation is, of course, important
to Generation Y, but in a unique
way. Schwartz says Gen Y workers
expect they will be paid well, but they
also have high expectations around
nonfinancial issues. He says young
workers are interested in a company’s
culture and values around social and
community involvement. “Community
involvement is something that attracts
them and keeps them at a company.
It is a generation that appreciates that
they can contribute to the community
through their business organization,”
he adds.
Generation Y has its unique attributes
because, like all generations, it
reflects the culture in which it grew up.
Deal says, however, when a new generation
begins taking its place in the business
world, the generations are more
alike than different. “Workers want
to be respected, paid well, perform
interesting work, be with coworkers
and managers they like and respect,
and have the opportunity to move up,
to learn and develop,” she explains. In
those basic employment goals, generations
have been consistent over time. ISM
Mary Siegfried is a senior writer for Inside Supply Management ® .
For more information, send an e-mail to author@ism.ws.
Generation Y Around the World
Because companies operate around the world, business leaders need to understand the various generations of workers in a global
context. Just as executives need to understand that customers are different depending on where they live around the world, Generation
Y is not the same in every country, says Jeff Schwartz, principal for Deloitte Consulting LLP. In the article Talking about
Whose Generation?, Schwartz, David Hole and Le Zhong examine generations in several emerging economies.
Some of the findings in the Deloitte article include:
In China, workers born between 1980 and 1989 are the first generation of single children after the introduction of the One Child
Policy, growing up in an environment of high expectations. As a group, this generation has a reputation for being “individualistic and
confident but also self-centered and rebellious.” Compared with other generations in China, they are regarded as innovative
and open-minded toward new ideas and approaches.
In India, Generation Y workers have fully embraced a career model of rotation among employers as
they pursue career advancement. They value talent programs that meet their development needs
and opportunities for advancement, such as the opportunity to work globally.
In Japan, the employment attitude of those born toward the end of the bubble
economy (1986-1995), known as Generation Z, were shaped by their parents’ struggles
during the Japanese recession. These workers “typically demonstrate a clear
bias toward stable corporate jobs and have benefited from opportunities created
by the economic recovery and the retirement of the first baby boomers.”
In the article, Schwartz encourages global companies to create countryspecific
talent strategies, rather than standardizing talent management
plans, and suggests working with local leaders who understand the different
aspirations of the generations that make up the work force.
© Institute for Supply Management . All rights reserved. Reprinted with permission from the publisher, the Institute for Supply Management .
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