According to Schermerhorn et al. (2014, p. 74), “Organisations are made up of people, each of whom as a unique individual. An important key to competitive advantage is respecting this diversity and allowing everyone’s talents to be fully realised”. This paper seeks to show the fundamental challenges that exist in organisational management in cases where staff membership consists of a multi-generational workforce. A number of articles and books on employee management and human resources address the issue of a multi-generational workforce (Millar & Lockett, 2014).
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Lyons and Kuron (2013) explain that the term “generation” in the context of human resource management deals with wider social trends. The social forces’ perspective shows that generations take shape within the flow of history. Meanwhile, a cohort perspective is also sufficient as a background framework for understanding the appropriate ways of dealing with multi-generational workforces because it links behaviours and characteristics of a group with its age. With “a shared inborn way of understanding life”, as explained in the Manheim’s theory, Lyons and Kuron (2013 p. 140) show that workers of the same generation across industries develop a universal consciousness and react in the same way to different historical events.
For example, baby boomers and people born after the World War II and before the mid-1960s experienced similar global historical events and have a shared consciousness that affects their view of work and values in life. The social history of a specific location also shapes the characteristics of a particular location’s workforce. Thus, there are subtle differences in the generation of baby boomers in North America compared to that of South-East Asia.
What key challenges exist when managing multi-generational differences in the workforce: A case of Baby boomers
Issue 1: Deferring Retirement
Many countries have resorted to analysing their current workforce as a response to the challenges facing their economies. According to Helyer and Lee (2012), the European Union workforce will continue to age from the year 2010 to 2060. An aging workforce is a cost burden for most firms, as they have to readjust their strategies on human resources. Currently, many members of the baby boomers generation are deferring retirement.
One of the reasons for the deferment is the sufficient health care and workplace technology that allow them to continue being productive in various capacities. Baby boomers who reach the retirement age keep working as a way of coping with the overall rising costs of living in many countries. Additionally, a big number of baby boomers are also staying on their jobs because of personal fulfilment, job satisfaction, and social interactions (Helyer & Lee, 2012).
Having an aging workforce that is not keen to retire is a good thing for other organisations because young people who are entering the organisation have an excellent opportunity to learn from their older counterparts (Helyer & Lee, 2012).
On the other hand, the delayed retirement of baby boomers is causing distress among young people and the baby boomers generation members who are impatient and want promotion and more responsibilities at work. As baby boomers increase their skills through training and their work experience, they increase the requirements for employment of new workers. Consequently, members of the Generation Y born between 1979 and 1991 are becoming frustrated with a job market that requires too much from them to gain entry (Helyer & Lee, 2012). Eventually, it becomes difficult for organizations to attract and retain the right employees as described below.
Issue 2: The Challenge of Getting Job Candidates with the Right Training and Experience
Findings by Jackson (2013) show that young people have sufficient knowledge about employability skills, but there is still a gap between the skills required for employment and the actual skills provided in higher education. Higher education institutions play an important role in preparing students for the job market. Education programs that impact students with the most employable skills will attract the most attention and applicants.
However, generational differences continue to play a part in skills training among young people who have just entered the job market and those who are about to do so. In addition, Helyer and Lee (2012) explain that baby boomers and Generation Y workers have different preferred working environments, which cause continuous clashing when workers from the two generations have to perform work duties together. Thus, companies find that they have to incur additional costs of training young people than baby boomers, which leads to the challenge of motivating the employees as described below.
Issue 3: Difficulty in Motivating Employees
Baby boomers prefer autonomy, while the Generation Y prefers collaboration and working in teams. At the same time, baby boomers prefer and respect a workplace hierarchy where they can advance their careers progressively. Meanwhile, the Generation Y members are ready to challenge the management. Moreover, they value the freedom presented in flat and decentralised workplace structures. Sometimes, there are overlaps in the preferences due to age differences, location, work type, and the history of a country, especially in case of multinational firms.
Multinational firms face the challenge of dealing with a workforce that has a wide age gap. The Western world’s population is aging, while that of the developing countries like India and Thailand is youthful (Srinivasan, 2012). When organizations coordinate their operations in different countries, they encounter generational challenges mainly related to attracting and retaining talent or sustaining employee performance. In addition, the growth level of a firm affects its demand for different types of employees.
Rapidly expanding firms will often hire a high number of entry-level employees to work in the front office and customer-contact duties for the company. However, hiring is only one part of the hurdle (Kapoor & Solomon, 2011). Rapidly growing companies also have to ensure that they maintain a high speed of decision-making within the organisation, even when they are increasing in size. Meanwhile, rapid expansion causes stress on informal relationships within the organisation and hampers the smooth flow of communication.
Issue 4: Management Rigidity
Another challenge that such organisations face is the rigidity of the management to change its approaches to reflect the job and organisational membership demands of different generations (Srinivasan, 2012). There are varied ways for the young, new employees to experience socialisation, given the many young people joining organisations and the few exiting older employees. According to Srinivasan (2012), intra-generational cooperation and collaboration are the salient elements of human resource management. They ensure that an organisation can achieve success in the rapid organisational growth context.
In the Western world, the fundamental motivators for baby boomers are mainly money, status, and self-realisation (Srinivasan, 2012). In the case of Generation Y, the era of globalisation and global catastrophes like earthquakes and tsunamis shapes their view of life. This generation has access to social media and work-related networks at all times. It is also a work-oriented generation. It may also value other self-actualisation goals more than money and only see money as a means to that end. Therefore, one challenge for managers is to develop an ideal work environment for each generation.
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How to Overcome the Key Challenges for Organizational Success
Solution 1: Creating Optional Packages for Employee Compensation/Motivation
The challenge of working with multi-generational employees for organisations that exist outside the Western world context begins with the conceptualisation of different generations (Srinivasan, 2012). Although Lyons and Kuron (2013) call for the consideration of location in defining particular aspects of a generation, there is little research and adoption of findings in practice (Srinivasan, 2012). Organisations must also take into consideration the fact that cultures may not be homogenous as assumed, even within countries. The same is true for economic development. People growing up in different parts of the same country and those who work in different places develop different opinions and value systems. They may or may not conform to the expectations of their employers.
Today’s workplaces can be a source of management inspiration or failure. It is common to see people from different generations working side by side. According to research by Gursoy, Chi, and Karadag (2013), managers have to increase their awareness of the differences existing among workers. Managers need to know the right approaches to use when making a typical workplace habitable for members of various generations. Most importantly, a balance between the loyalty of the baby boomers or their ability to wait in line for promotions and the demand for an immediate rise in position or limited organisational commitment expressed by the Generation Y has to be under the control of the management.
A good approach would be to have the management consider the fact that Generation Y members want a life outside work, while baby boomers may be happy to participate in extra-work activities supported by their employer. Thus, the solution to dealing with the differences is to introduce varied compensation packages and make them optional. Workers from any generation can rely on their inherent preferences to pick the option that is suitable for them. At the same time, a firm that is providing such options will be limiting its exposure to employee dissatisfaction (Kapoor & Solomon, 2011).
Solution 2: Connect Generations Using Technology
Srinivasan (2012) holds the opinion that the worldview held by different generations and its ongoing alterations in the social context will affect the performance and effectiveness of employees in any organisation. This occurs because worldviews spill over to the context of a firm. Therefore, Srinivasan (2012) calls for organisations to think about the past, present, and future employees in terms of generations. With this conceptualisation, senior leaders in any organisation will be able to make the appropriate long-term decisions for their organisations. Companies dealing with the challenge of handling baby boomers who do not want to retire can choose to embrace social networking tools. The presence of social networks that connect different generations informally influences the characteristics and perceptions of Generation Y and other generations, such as baby boomers. Therefore, such networks are good for facilitating collaboration and understanding in multi-generational workforce (Millar & Lockett, 2014).
Nevertheless, encouraging collaboration between generations for the sake of it is not appropriate. Subtle differences in values and perceptions adapt to an organisation’s structure differences and demand customization of any solution to fit an organization’s perspective. Therefore, a pragmatic approach for firms is to embrace a holistic technique, which combines several research findings and expert advice to suit an organization’s environment.
Solution 3: Embracing Mentorship Programs
Short (2014) proposed mentoring as a solution to the key challenges facing companies that have multi-generational workforces. Mentoring fills the gap left by coaching and training in the multi-generation workforce situation. In fact, different generations have defined preferences for learning. Therefore, when there are three or four generations in the same workplace, human resource development practitioners have to take coordination activities for these generations with caution to prevent conflict and enhance overall organizational performance. For example, in the case of baby boomers, the human resources department in an organization will look for a way to deal with the issue of deferring retirement.
The HR department will then analyse the impact of retirement delay by the baby boomers on intergenerational communication within the organization. Finally, the HR department will respond to these queries according to the ability to attract, train, and retain young talent.
Relying on mentorship helps the HR department to provide individualised learning opportunities for employees who belong to different generations. Individualized learning leads to employee engagement, customer satisfaction, and business performance. Individual employees remain at the centre of their learning through mentoring. The method works well in large organisations or rapidly growing organisations, whose traditional structures may not support individual employee needs.
The paper evaluated the general challenges and characteristics of multi-generational workforces in the context of the social context perspective and cohort perspective theories. The analysis revealed that the biggest challenge posed by the baby boomers is delayed retirement. This finding goes against the Generation Y employees’ limited desire for organisation commitment and employer-sponsored programs that come as part of the benefits package. These observations vary across countries and regions. The nature of business and the existing organisational structure also affect them. Nevertheless, organisations that succeed in managing and developing a multi-generational workforce must embrace holistic approaches that are always evolving to reflect the context of the firm and the availability new knowledge. Some of the solutions to the problem include mentorship programs and the provision of optional employee benefits.
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