There is a Great Generational Shift underway in the workforce today. This is the post-Baby Boomer shift that demographers and workforce planners have been anticipating for decades. It is not only a generational shift in the numbers in the workforce, but an epic turning point. This is the final stage of a historic period of global change and a corresponding transformation in the fundamentals of the employer-employee relationship in a loss prevention employment context.
On the older end of the generational spectrum, the workforce is aging, just as the overall population is aging. The Boomers are filling up an “age bubble” in the workforce such that there are many more people at or near the ordinary age range for retirement. At the same time, the fastest-growing segment of the workforce is made up of those born 1990 and later, so there is a growing youth bubble on the other end of the spectrum.
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The oldest, most experienced people in the workplace, “pre-Boomers,” those born before the post-WWII “Baby Boom” began in 1946, are still greater than 1 percent of the workforce. The Baby Boomers (born 1946-64) are 30 percent, Generation Xers (born 1965-77) are 27 percent, and the Millennial Generation is 42 percent. By 2020, Boomers will be less than 20 percent of the Western workforce; older Boomers (born before 1955) will be less than 6 percent. By 2020, second-wave Millennials (those born 1990-2000) will be greater than 20 percent of the Western workforce and another 4-5 percent will be made up of post-Millennials born after the year 2000. And in most of the world, the youth bubble will be much, much larger.
At RainmakerThinking, Inc., we have been tracking this transformation for more than 20 years. In our latest white paper on the subject, we presented the latest findings from our ongoing employment diversity research. This “Generational Shift” is no ordinary generation gap in the workplace. Because this is an era of profound historical changes, generational difference today is a powerful lens through which to understand changes in the very nature of the workplace:
• The myth of job security is dead
• Short-term rewards and benefits are the “new normal” in terms of a professional growth plan
• Employees today are much less likely to believe an employer’s long-term promises
• The free-agent mindset is now the prevailing workforce mindset.
The generational shift presents a whole new set of challenges for loss prevention employers, employees, and for managers at all levels.
Transformation in the Very Nature of Loss Prevention Employment
The worldwide business environment has become one of fierce competition, high risk, erratic markets, constrained resources, and unpredictable resource needs. Organizations and individuals are forced to adjust to the new normal of constant change and uncertainty.
Employers of all shapes and sizes are constantly trying to become more lean, flexible, and high performing. Downsizing, restructuring, and reengineering are now accepted as constants of the workplace – taken for granted now as “continuous improvement.”
The myth of job security is dead. Employers are more likely to undertake major organizational changes that eliminate jobs regardless of employees’ length of service. Such changes include mergers, acquisitions, spin-offs, restructurings, and liquidations. Employers are also more likely to implement new technologies that eliminate jobs due to reengineering. Meanwhile, there is a strong trend among employers of hiring fewer “employees” (full-time, exclusive workers), while hiring more contingent workers. Most employers’ staffing strategies for the future continue to move in this direction. As a result, the number of traditional “employees” is diminishing as a percentage of the overall workforce, while the percentage of “contingent workers” is increasing. This has meant a fundamental change in employment practices, away from long-term, stable employment relationships and toward a more efficient supply-chain management approach – known as human capital management. The goal is to optimize human resources: having the right people in the right places at the right times, employing them exactly as long as you need them and no longer, and paying them the market value of their contributions and no more. Because of these new realities, employers are now less likely to make formal or informal guarantees about continued employment and job security.
The new normal. Organization charts are flatter; layers of management have been removed; reporting relationships are more temporary; more employees are being managed by short-term project leaders instead of “organization chart” loss prevention managers. Employers are less likely to award status, prestige, authority, flexibility, and rewards on the basis of seniority; and employers are more likely to award status, prestige, authority, flexibility, and rewards on the basis of short-term measurable goals. Employers are also reducing long-term fixed pay as a percentage of overall employee compensation, while increasing the percentage of variable performance-based pay; and employers’ compensation strategies for the future reflect this change. Part of this new compensation strategy includes a reduction in the percentage of employee “benefits” (paid for by the company for full-time, exclusive workers) in relation to overall compensation. Further, employers are increasing the percentage of “employee services” (paid for by the worker on a pre-tax basis), such as health insurance and retirement savings.
Employees today are much less likely to believe employers’ promises about long-term rewards. While many employees may doubt the sincerity of long-term promises, that is not the biggest problem. Many more employees worry that their prospects for receiving long-term rewards and professional development are vulnerable to a whole range of external and internal forces that might shorten the natural life of the organization employing them. Workers worry openly about events or circumstances that have little or nothing to do with business, such as politics, diplomacy, war, terrorism, and natural disasters. They worry about broad business-climate factors, including monetary policy, global market shifts, change in particular industries, and organizational changes. As well, they are acutely aware that the organization employing them might simply lose out in the fiercely competitive marketplace. Workers also worry about the continued employment of their immediate supervisors and other leaders who know them best.
The free-agent mindset is now the prevailing workforce mindset. Without credible long-term promises from employers, employees no longer labor quietly and obediently. Rather, most employees work anxiously to take care of themselves and their families and try to get what they can from their employers – one day at a time. People of all ages and all levels realize nowadays that they are “free agents” because they have no other choice.
There is no going back. There is no going back to the workplace of the past, in which the default presumption was that employer-employee relationships would be long-term, full-time, on-site, and based on a one-size-fits-all hierarchical career path. Because organizations will need to continually increase productivity, quality, and cost effectiveness, employment relationships will become increasingly short-term, transactional, and highly variable. The traditional employer-employee relationship will finally fade away.
This article was excerpted from The Great Generational Shift: The Emerging Post-Boomer Workforce from RainmakerThinking. Learn more about managing Generation Y in Tulgan’s article, “Not Everyone Gets a Trophy: Tips for Managing Generation Y for the Loss Prevention Manager.”