There are popular themes in current workforce planning thinking; the challenges of attracting, motivating and retaining “the millennials” and managing across generations, with the much-debated “widely-differing needs” forcing systematic stereotyping – the older employees, old fashioned, dodging change and resenting the use of social media, the younger workforce, glued to their mobiles; caring about fun, fitness and the environment; cash and career progression; hungry, instant, impatient and selfish.
There are various case studies around where employers have segmented their working populations by age and by so doing have had great results. Many of us in the workplace have experienced a “blank” moment when working with a colleague 20+ years older or younger where the colleague’s use of acronyms or general language appears to be foreign. Several employers in the technology sector report serious concerns that the average age of employees has moved from early to late thirties in the last five years. This is attributed to the inability to retain younger workers, less mobility in mid-careers post the 2008 recession, a dearth of appropriate skills and later retirement ages. So what data lies behind these headlines? Are they true and what can employers do about it?
A starting point might be to look at overall UK population trends: the UN Population Division data reveals: In 1970 24.1 percent of the UK population was 14 or under, 18.8 percent 60+, 2.3 percent 80+. In 2010 this had shifted to 17.4 percent up to age 14, 22.6 percent 60+, 4.6 percent 80+; Projections for 2050 are 17.2 percent up to 14, 29.6 percent 60+, 9 percent 80+. There is a clear trend of an ageing population. Looking at the current working population, Aon has analysed the benefit choices of 130,000 employees across seven different employers to look at their preferences. However, the first point to note is how the working population is broken down into the key generational segments. Generation X dominates the workforce. You could argue this has always been the case, but this point, taken alongside the ageing of the overall population, suggests that maybe employers should be more concerned about effective management of the 35+ age group than fret about the millennials. The age at which a “Generation X” becomes a “baby boomer” seems to vary in different places (some age baby boomers 56+). Secondly, the phrase “Millennials” generally refers to “Generation Y”, but we have been talking about generational segmentation for so long now, many of these “young'uns” are well into their thirties by now.
Also, there is now Generation Z, the under 20’s – so should we group these with the Millennials? Accepting the oddities of the Generation labels and the fact that if employers are focused on Millennials, they may be ignoring 60 percent odd of their population, are these different generations indeed different? We analysed the benefit choices of 130,000 employees and found that, in overall terms, Generation X was the most active in voluntarily exchanging salary for benefits and the youngest group, Generation Z – under 20, however less than one percent of the sample was under 20 and was the least active. This analysis also showed that the relative attractiveness of Cycle2Work, gym and retail vouchers was similar across all generations and that Generation X was more attracted to buying critical illness insurance, holiday and travel insurance. So there were no marked differences across the generations. This data becomes more interesting when viewed employer by employer – the overall trends disappear. There were two large Financial Services employers in the sample and they displayed similar results, however the trends for other sectors were very different. To see the graphs for the survey results in this article, go to theHRDIRECTOR website via this link www.thehrdirector.com/
This data becomes more interesting when viewed employer by employer – the overall trends disappear. There were two large Financial Services employers in the sample and they displayed similar results, however the trends for other sectors were very different. In the analysis, we split generation X into X1 and X2 since this covered such a wide age range. The results in different employers vary widely. The two Financial Services employers show similar trends – one bank and the other insurance -. There was very little difference in attitudes to holiday change across the entire age range 20-55+, only four percent difference high to low covering over 60,000 employees. The Pharmaceutical employer showed a Generation X spike. Professional Services show a difference between generation X1 (more active in making holiday changes) and X2. The Consumer Products employer showed far lower activity levels overall and increasing activity as age reduces. The average earnings in this employer is the lowest in the sample and this suggests that earnings level is a stronger determinant of the enthusiasm to buy or sell holiday rather than age segment.
This analysis shows different trends. In the lower paid environment, again choices increase as age reduces. In the Financial Services employer, the same trend exists, but at a higher participation rate, presumably reflecting higher earnings. In the Pharmaceutical employer the generation X spike seems to exist, but this company has an active <20 choice level also. In the Professional Services employer, the older age groups are more active and generation X1 shows a spike. This research points to a conclusion that generalisations about generation preferences may be misleading and if employers wish to understand their employees’ benefits preferences, bespoke research is needed. Benefits attitudes do not appear to be reliably predictable by generation but are other aspects of working life influenced by generation?
Our most recent Global Engagement Survey (which surveys over 270 global employers, covering several million individual employees) identifies very different employee engagement trends in different regions. For example Engagement levels in Latin America (between 2010 and 2014 ranging between 70 percent and 74 percent) are consistently far higher than they are in Europe – between 2010 and 2014 ranging between 51 percent and 57 percent. So it is clear that culture and the macro employment environment influence engagement levels. This research also analyses “engagement drivers”, those factors within organisations which positively influence employee engagement, by three main generational splits across the global survey data: There are no massive differences across the three main generational segments with regard to engagement drivers but the older generations appear to be more engaged than the younger generations. This again suggests that across the generations at work, employees may be far more similar in their motivation than popular segmentation would have us believe.
Career opportunities and the reputation of the organisation for which an employee works matter to everyone. Pay levels matter most to the younger groups. Recognition matters to the older group the most, but is also significant to the younger groups. The same five-six factors (there are a total of 28 different engagement drivers noted in the survey) are ranked as most influential across all generations and the differences are subtle. So is all this talk about segmenting workforces rubbish? The benefits and engagement stories suggest that employees have more in common than we think. However there is one area of people management where there are clear differences across the generations. When employees indicate their communication preferences, there are some clear, arguably obvious, differences across the generations. Social media is far more acceptable to the under 30’s than those over, the older generations, respond well to pdf’s that they can print and email as the prime delivery medium. The older generations prefer to deal with queries by telephone, the younger generations are happy to solve queries via online chat facilities.
However, communications listening groups and surveys show that most employees like personalised total reward statements printed, and face-to-face communication in respect of their reward. So what is the smart response for employers when thinking about generational segmentation? Here are a few suggestions: If you want to segment your workforce for communication or targeting purposes, do so by referring to your own in-house research. A multimedia approach to employee communication is called for within any employee demographic that spans the generations. Be aware that workforces are ageing and that “looking after Generation X” may be a prudent short term focus. Employee engagement, which is generally accepted to have a strong impact on bottom line, is highly influenced by career opportunities, organisation reputation and pay. Generational segmentation in the area of engagement seems inappropriate. Offering flexibility and value opportunities in respect of benefits allows employees to make choices appropriate to themselves; fixed benefit policies are unhelpful.