How Gen Y & Boomers Will Reshape Your Agenda

Right now, managers of people are operating in full recessionary mode. They’re wrestling with whether and how much to reduce head count, weighing alternatives like furloughs and pay cuts, and generally trying to get by with less. Not many are focused on what just a few years ago was described as “the war for talent.” As the economy recovers, however, companies will return to the challenge of winning over enough highly capable professionals to drive renewal and growth. Only then will they realize that the rules of engagement have changed—that the landscape of talent management has been transformed.

The combination of Generation Y eagerly advancing up the professional ranks and Baby Boomers often refusing to retire has, over the course of a few short years, dramatically shifted the composition of the workforce; each of these generations is roughly twice the size of Generation X, which lies between them. More important, Boomers and Gen Ys are together redefining what constitutes a great place to work. As we will show, they tend to share many attitudes and behaviors that set them apart from other generations. These shared preferences constitute a new center of gravity for human resources management.

Portrait of Gen Y

Portrait of Baby Boomers

Going forward, what will it take to be an employer of choice? Last year, the Hidden Brain Drain Task Force, a group of 50 multinational companies committed to global talent innovation, took up this challenge. Four of the companies—Booz Allen Hamilton, Ernst & Young, Time Warner, and UBS—spearheaded two large-scale, nationally representative surveys: one, in June 2008, of 3,782 employed college graduates and the other, in January 2009, of 1,046 people from the original sample. The resulting data allowed us to unpack the work aspirations of high-echelon talent across age groups and sectors. We augmented the survey results with qualitative input from 30 focus groups and 40 interviews. Stated at the highest level, our finding is that people, especially Gen Ys and Boomers, are looking for what we call a “remixed” set of rewards: Flexible work arrangements and the opportunity to give back to society trump the sheer size of the pay package. That was true before the downturn hit and remains so even as its full brunt is being felt.

This rewards remix is both challenging and liberating for talent managers. It’s challenging because it means letting go of cash as the prime motivator and tangling with the difficult task of redesigning incentives. It’s liberating because if nonfinancial rewards are less expensive to fund, companies can lay out more plentiful options. Perhaps that explains why we found managers experimenting with a whole range of such rewards—figuring out how to use time, for example, as currency, or a green workplace as a retention tool. In a period when many were not able to offer raises or bonuses, some realized it was the right time to respond to the attitudinal changes they were already sensing in the air. Because some of their initiatives deftly address the demands of the 800-pound-gorilla cohorts, Gen Ys and Boomers, we believe they show the way to tomorrow’s best practice.

It’s All About a Wider Purpose
When a young man we’ll call Aaron Johnson received an employment offer from UBS in early 2008, he readily accepted it yet felt a tinge of regret. Having interned at UBS between his junior and senior years at Stanford, he knew he’d enjoy the work of an analyst. But the job was to start right after graduation, giving Aaron no break between one highly structured situation and another.

Fortunately, in the spring of his senior year, UBS informed Aaron about its new graduate deferral program. The initiative gave new hires the option of postponing their arrival for a year and devoting the interim period to community service or the acquisition of new skills. For pursuits UBS considered worthy, it was offering to pay half the base salary associated with the accepted position, plus a stipend for health insurance—while holding the promised job open for the individual’s return. Aaron wound up spending that gap year in India with a nonprofit organization that trains paramedics, helping a California-based nonprofit develop AIDS-education tools for underserved populations, and writing a novel. Others in the program used the year to learn Spanish in Argentina, do economic development work in Vietnam, study advanced econometrics, work on an offshore oil rig, and rebuild houses destroyed by Hurricane Katrina.

Meanwhile, CVS/pharmacy, the retail division of CVS Caremark, was offering an option that many employees at the opposite end of their careers considered heaven-sent. As one of America’s largest pharmacy chains, CVS has stores in every region of the country—and in every regional climate. So in 2004 CVS created its Snowbird Program to let experienced store employees move seamlessly among CVS locations according to their seasonal preferences. As the program’s name implies, many of the participants are mature workers who enjoy wintering in southern states and summering in northern ones. Since the program started, over 1,000 employees, ranging from retail clerks to pharmacists and managers, have enthusiastically participated, earning CVS a high-profile award from the American Society on Aging.

And in yet another industry, Time Warner recently developed a mentoring program that engages people on both ends of their careers. In this case, some of the company’s senior executives were challenged to stay at the forefront of a rapidly evolving new-media landscape. To raise their awareness of digital media, Time Warner launched Digital Reverse Mentoring—a program in which tech-savvy college students mentor senior executives on emerging digital trends and technologies such as Facebook, Twitter, and other Web 2.0 applications. In addition to imparting technical skills, Gen Y mentors provide Boomer mentees with a peek into the values, consumer behaviors, and communication styles of the younger generation.

Copyright © 2009 Harvard Business School Publishing Corporation. All rights reserved.