Millennials and Generation Z are taking over the workforce, both in numbers and in influence, and employers should prepare for a transformation of the workplace. Baby Boomers are retiring in droves, many earlier than expected as a result of the Covid-19 pandemic, and employers are turning to the younger generations to replace them.
With some Baby Boomers still lingering in the workplace, there are now four very different generations working side-by-side. Each generation brings with them their own distinct values and aspirations, and employers should be cognizant of those differences.
The generational breakdown by birth year looks like this:
- Baby Boomers: 1946 – 1964
- Generation X: 1965 – 1980
- Millennials: 1981 – 1996
- Generation Z: 1997 – 2012
Some Baby Boomers are Shifting to Different Roles
Millions of Baby Boomers have retired early during the Covid-19 pandemic, their exit being one of the leading contributors to the current U.S. labor shortage. What many Baby Boomers are realizing though, is that they were not financially prepared to retire – let alone years before planned. As a result, some boomers are returning to the workforce, or rather, choosing to shift into less demanding or client-facing positions.
There are many benefits for Baby Boomers who opt for semi-retirement. Financially, semi-retirement affords Baby Boomers more time to save for their retirement and adjust their budgets, and the opportunity to delay retirement account and Social Security distributions. Additionally, with many Baby Boomers fearing the loneliness and isolation that oftentimes accompanies retirement, semi-retirement may be a good option for Baby Boomers hoping to maintain their social networks and sense of purpose.
Employers who offer semi-retirement options can also benefit in a number of ways. Bearing their decades of experience and knowledge, semi-retired part-time employees and consultants make excellent mentors and coaches, can be useful for connecting with long-term clients, and easing the transition to a workspace with fewer Baby Boomers.
“Forgotten” Gen X-ers Bridge the Gap
Despite Gen X’s loyalty and resilience, the Covid-19 pandemic has exposed a major challenge for this generation in the workplace: they are being perceived as “old.”
Once valued for being more educated and technologically prepared than their predecessors, Gen X now struggles with being disfavored by their younger counterparts. At the root of this ageism are common misconceptions that Gen X-ers are less-willing to learn new skills, less digitally savvy, and less motivated.
This generational stereotyping is harmful and employers should be mindful not to overlook this assiduous generation. Gen X bridges the gap between Baby Boomers and Millennials, as well as the former and new ways of the workplace.
Millennials Take Over & Gen Z Enters the Workforce
The two youngest generations now make up over half of the workforce in the United States. Millennials – no longer the newbies in the workplace – are taking over management roles, and Gen Z individuals are just starting their professional careers. Many Gen Z-ers, off to a rocky career start after graduating during a global pandemic, have kept their eyes on jobs in software, though others are now exploring and building careers in social media creation/influencing and entrepreneurship. Not satisfied with what the modern workplace has to offer them, these young individuals are instead choosing to self-employ and start their own businesses.
Following the instability and uncertainty that came with the Covid-19 pandemic, many Millennials have shifted career paths and reevaluated their goals and expectations. After having the time to take a step back and reflect on the important things in life, more Millennials than any other generation have changed careers or are planning to make the change in the near future. Not quite as entrepreneurial as the younger Gen Z-ers, many Millennials are leaving their retail and education jobs, citing burnout and inadequate pay, and are now gravitating to the technology/software, healthcare, and finance industries.
What are younger generations looking for now?
- Professional Development Opportunities
Millennials are now entering their 30’s and 40’s and have been among the workforce for quite some time. Despite this, a leading reason they are leaving their current employment is a lack of opportunity for advancement.
Employers looking to encourage and promote professional development need to regularly discuss with employees their professional career goals. Collaborative goal-setting increases transparency of both individual and organizational goals.
In addition, offering leadership training opportunities – or even implementing an internal leadership development program – can help prepare employees for leadership roles. This training can facilitate internal promotions, and send a message to employees that opportunities to grow with the organization are possible for them.
- Competitive Compensation and Benefits
Employers should not discount the value that Millennial and Gen Z employees put on compensation. These generations are not afraid to shop around for a salary they feel reflects their worth. A pay increase can reduce turnover, and subsequently save employers the cost of finding and training replacements.
Benefits such as paid vacation time are also in high demand following the pandemic, as Millennials and Gen Z desire greater work-life balance, time to bond with their growing families, and the opportunity to realize their travel plans that have been in the making for over two years.
- State-of-the-Art Technology
Gen Z-ers, even more than Millennials, are digital natives who have had access to the internet and social media all their lives. With more and more Gen Z-ers entering the workforce every day, employers need to upgrade their technology to unlock their full potential. While this is in part to accommodate the generations’ post-pandemic demands for flexible remote and hybrid capabilities, new technology is in high demand in the physical workplace.
We addressed this topic in a previous newsletter article under the headnote The New Workspace (see here). Though both Gen Z and Millennials value technology, generational differences may affect the technological capabilities each generation is looking for in the workplace. Millennials, known for valuing teamwork and input, will benefit from open work environments with digital collaboration tools. Gen Z, the first generation of true digital natives, are looking for more. They are drawn to businesses with technology incorporated at every process, from hiring and daily work to human resources and education.
The Covid-19 pandemic has had an undeniable influence on the workplace, affecting the goals and plans of all generations from Baby Boomers to Gen Z. The key to the successful management of a multigeneration workplace is recognizing the different expectations and contributions each generation has to offer.