One of the trends that we’ve seen over the past 10 to 15 years is that people are working for much longer. It has partly been driven by an ageing population and in many Western countries, the birth rate in recent years has not been sufficient to offset the cost of pensions and health care for the elderly. In fact, in the OECD 37% of the working population is over 50 and is projected to be 45% by 2050.
This is also been accelerated by a number of other factors:
- On the whole better Healthcare allowed us to live longer
- More flexibility in how jobs are carried out ensures that people can make choices between enjoying accumulated wealth and continuing to work
- The lack of up-and-coming workers to fill the roles created by those who are retiring
- The increasing complexity in the workplace requires experienced employees
The net result of these trends is an unprecedented span of ages in the modern workplace so whilst the title is only semi-serious there is an increasing likelihood those entering the workforce will be working with someone 50 years their senior – the age of their grandparents.
This could be good news or bad news depending on our capacity to understand this demographic shift and make the most of it. This article will talk about some of the most obvious challenges with (mainly) the widest gaps and the benefits they can bring.
A quick comment on generational theory
Generational Theory (GT) is the idea that the experience of people, depending on the era they grew up in, fundamentally changes them on a psychological or sociological level. Most people will know GT by the ‘handles’ given to the various generations: Millennials, Gen X, Boomers and Gen Y to name a few. The reasons why this is a load of rubbish are too many to cover in this article but I’ve got into them in more detail in my commentary here.
Suffice to say that whilst the language of the GT is very useful, and we will reference it here, it isn’t the case that these generations are fundamentally different. Instead, we can say that they use different language, they have different knowledge, and they are currently different ages (obviously) which impact their current priorities. This accounts for the very few ‘true’ differences between them.
This may sound like semantics but it’s important we value the older generation for what they have and what they bring and recognise the knowledge does not become obsolete just because they might have grown up in the post-war era. I cringe at the ‘OK boomer’ insult which has become synonymous with dismissing my parent’s generation for a lack of relevance.
So with that out of the way (because otherwise it would be conspicuous by its absence), we can look at various considerations, of actual differences, as we project these demographic trends forward and deal with unprecedented generational diversity.
Bridging the digital gap
So one place we can start is to talk about ‘digital natives’. This term is generally reserved for those people who were able to learn and use internet-enabled apps at the point they were ‘cognitively ready’. In other words, at the point they were able to learn to write they have simultaneously been learning to use a computer or tablet. In fact, the current generation is now able to interact with a computer before they can speak – a concept that would have been alien to most of us at a similar age. This video shows just how integrated the digital realm is with the lives of our youngest.
This shift isn’t just about the availability of technology but its use. So children aren’t necessarily becoming more comfortable with technology, it’s also that technology is adapting to use more intuitive behaviours (such as touch screen and hand gestures in the video).
Furthermore, we now live in a world where technology is released but also adopted at an exponential rate. This means it’s easy to find ourselves falling behind in knowing and using the latest apps. I consider myself to be quite tech-savvy and yet I’m still confused by many of the things my 11 and 10-year-old daughters are able to do with relatively simple applications and technology.
But this isn’t really about the whole of ‘tech’. Technology is a huge category and those entering the workforce now are only marginally better at using or adopting typical workplace digital tools (i.e. spreadsheet software), in fact, they can often be confused by the lack of intuitive, interactive components (are my generation holding back innovation?). For any given age there are ‘trends’ (clothes, music etc) and the latest technology or use of technology (like text speak) just becomes part of that. This is what is hardest to keep up with. In the same way that it’s hard to keep up with the latest fashions.
The other differentiator with technology is that it permeates every part of life. So getting to grips with Twitter when it launched (in 2006!), for example, was seen as slightly niche. Now it’s an integral part of every organisation’s PR and marketing strategy.
So we have a technology landscape that:
- Is adopted at an exponential rate
- Is increasingly easy to use
- Takes on the idiosyncrasies of the latest trends
- Looks very different based on your age partly because…
- The younger generation is a driving force behind technology investment (to follow those trends)
With the average age of the CEOs in the Fortune and FTSE 500 being 55 years old there may be a real risk of those with the power having relevant knowledge. In other words, we have previously suffered from knowledge being hoarded with power at the top of an organisation but now we have risks around the knowledge of consumer trends within tech being held lower down in the organisation too.
There are a number of ways in which this lack of knowledge distribution can be addressed:
- Make the ability to create and share learning a key competence and a cultural artefact (specific activities for knowledge sharing like ‘hackathons’)
- Cultivate leaders who operate effectively without intimate knowledge of every part of the organisation
- Flatten the organisation effectively increasing information flow to where it needs to be
- Utilise mentoring and reverse mentoring to formalise some of the information flow up and down the organisation
So if we focus on the digital knowledge component in hierarchical organisations, reverse mentoring could be hugely useful. This not only allows senior (in every sense) leaders to keep track of current trends but also allows them to be exposed to other differences (and lack of them) between generations. Reverse mentoring in many organisations is now a key component of a D&I strategy and has clear measurement criteria – something that can be hard to find in D&I initiatives.
Valuing organisational elders
Chip Conley was an Airbnb executive and he noticed there was often an undervaluing of older employees. As you can imagine Airbnb was a significantly different operating model from anything that had gone before. It’s often cited like Uber to be an organisation that leverages assets it does not own this is not new in the world of commerce but it’s certainly something that has expanded significantly over recent years. As a result, this kind of model has been seen as a young person’s game but the knowledge of the wider market and what has been tried in the organisation was still held with older employees (and we aren’t talking that old).
Since noticing this trend of undervaluing, Chip developed the idea of ‘organisational elders’ these are people typically of retirement age who may not wish to work in the way they have previously (e.g. full time, lots of responsibility) but have invaluable insights that are difficult to pass on.
All of this links to a particular passion of mine and the only other area of research outside of the future of work – organisational wisdom. As Chip Conley learnt from experience, this is the phenomenon that some implicit knowledge is really only gained via experience. In the highly complex world of work, this has real-world, bottom-line value. Chip and his advocates try to achieve two things:
- Utilise the experience of those who are at or past retirement age to supplement the knowledge and experience of the organisation (reverse, reverse mentoring?)
- Enable those in their middle years to accelerate themselves to ‘elder’ status enabling the reflections and insight that might otherwise be acquired organically to be acquired in a more intentional way.
Exactly how to do the latter well is complicated and part of emerging science.
There is an opportunity, which we must be careful not to exploit, that according to Investopedia many countries around the world are struggling to fund full, older living. This is due to various economic factors but also due to something very human – poor foresight.
Many companies now run retirement planning training and encourage employees of all ages to attend. This is because nearly all employees who conduct an analysis with a financial advisor have unrealistic expectations of the retirement they will have, based on their current level of investment. Of course, like any investment, it is easier the earlier you start.
The opportunity for organisations is to offer far more flexible options to the older generation allowing them to continue to work and contribute without the need to commit to 30+ hours of work a week. Connected to this is the idea that very few retirement investments, accessible to the average investor, are suitable for the globalised world. In other words, if you want to live and work in multiple countries the rules around investing in your future, and relevant state pensions, get very complicated. This is likely to be something workforce mobility teams will need to understand in the future, initially on a case by case basis. I quite like the idea of taking my semi-retirement as the beginning of a full retirement in sunnier climes.
Overall we can be cutting edge by helping the older generation to be involved in the workplace in a more flexible way. We have the pandemic and more widespread adoption of remote working practices to ‘thank’ for having a few more options on the table:
- Part-time advisory/Non-Exec Director roles (depending on the seniority of the employee)
- More flexible hours/less hours within the existing roles
- More specific ‘troubleshooting’ roles
- Pure mentoring roles
- Enabling freelance work or short term project work whilst staying on the payroll
- The much hated ‘zero hours’ contracts which often exploit the poor may be perfect for those wanting to phase out work
We have debunked Generational Theory but the reasons it perseveres are worth appreciating. Whilst there are measurable generational differences they fall into two camps:
- Temporary and contextual (e.g. economic)
- Surface or perceptual
What they are aren’t is fundamental or innate.
For example, people change employers at a rate of 4% higher than 10 years ago. This isn’t as some claim due to a Millennial or Gen Z ‘lack of loyalty’. In fact, it’s due to economic pressures, a generally very competitive talent market, and a slower rate of retirement (meaning less vertical progression in-company). This is an example of both really – a contextual effect (economy) impacting a perception (Millennials are disloyal). But we can also look at, swearing in the office, casual attire, spending trends and openness/fluidity of sexuality for examples of ways in which there can be profound misunderstandings.
In order to overcome these, it makes sense to deploy the reverse mentoring mentioned above but there are issues with using this to directly address this misconception – imagine instigating a reverse mentoring scheme designed to educate older straight people into more fluid sexuality. It’s a lawsuit waiting to happen.
Aside from training, a ‘human library’ approach can help people to understand a variety of different worldviews. It takes the approach that each person has an ‘interactive story’ and we can learn about different people and worldviews through reading. See humanlibrary.org for more information. Although doesn’t necessarily impact intergenerational difference directly it is worth exploring for the value it can add in breaking down all sorts of barriers across your organisation, in a way that diversity training might struggle.
As we stand on the eve of another world war the repercussions of the last one still echo out across the economic landscape. After WW2 there was a boom. A boom in babies and boom in consumption. Demand and wealth of the everyday American (and the US drove this trend) was at an all-time high. As the rest of the world recovered and the electronic and micro-chip economy grew; everyone benefited.
This has created an incredibly wealthy generation in most of the developed world – the generation that’s currently retiring, and hopefully spending their well-earned money, in their abundant good health.
However, in many countries, this has created an intergenerational inequality fuelled by:
- Better health in older age meaning pensions are paid out for longer often resulting in higher tax for the working generation
- For those that aren’t ageing ‘well’, there’s a cost to the increased medical support for those who are older for longer
- COVID seems to have increased generational inequality in most of the developed world
- In the UK the housing market is fuelled by foreign investors and the older generation and more generally the IF have more research here
- According to a recent German study, there is a 14-year investment gap between current retirees and their potential heirs
This unfairness needs to be considered in the assumptions of leaders. In the UK recently, where buying a house is much of the culture, a celebrity spoke out to say that if people just ‘spent their money a bit smarter’ they would be able to afford to get on the property ladder. It resulted in a huge backlash and accusations of being ‘out of touch’.
As mentioned above, one of the ways in which generations do differ is in the impact of the economy and how it changes their spending and investment behaviour. According to the IMF, house prices continue to rise in virtually every country in the world, despite the pandemic. This of course disproportionately affects those who are trying to enter the property market.
So what does this mean for organisations and employees – it may well mean that the benefits (which we know now need to be a lot more flexible than they have been in past) and one example from Goodman Mason includes a ‘homebuying perk’ effectively a savings top-up scheme that helps employees get on the property ladder.
A quick side note important to the future of work, is that the decades that created this wealth after the war are also the decades in which the US (in particular) developed and wrote a lot of our management thinking. Mazlow, Hertzberg, Belbin, Macgregor, Adair all developed their now widespread theories primarily in the 50s and 60s. This doesn’t mean that they aren’t relevant today but the context of abundance has the potential for misattributing success to the skill of leaders at the time rather than the power of an economic boom. Were the successful leaders studied successful because of how they operated or because they were leading at a time of courageous economic expansion?
The decline in older workers
Another reason to learn to capture the wisdom of the older generation is also an effect of the post-war boom. The diagram below shows the trend in working-age of the population and the projections of the future.
So whilst Africa has a challenge in accommodating an older workforce in the future other continents have the challenge of ‘diminishing wisdom’. The scale of this should not be underestimated but a lot of attention is given to the overall shrinking of the workforce and the emphasis is often on the fight for talent at the ‘entry’ ages. I would argue that haemorrhaging wisdom is just as concerning. In fact, any organisations that have the opportunity to do so should be expanding their personal and global mobility programmes to harness the wisdom of the globe, especially Asia (aged workers declining at a slower rate) and Africa – further insuring against localised demographic challenges in the future.
Of course, since the pandemic, we have had a shift in the definition of global mobility. This used to be all about rehousing people and supporting with the costs of moving into the country where eth company is based. Now it is far more about being flexible as to working location and synchronous working hours of employees, having the ability to accommodate working in various jurisdictions, and helping them to navigate the legal and logistical challenges that come with being a global citizen.
The organisation that embraces this, and works with partners that understand this space, have a rare window (which will close eventually) to become leaders in the global talent market and draw on the insight of younger and older generations spread throughout the world.
We have unprecedented generational diversity. There is value in learning from the older generation (baby boomers – who may leave a wisdom, as well as workforce, deficit) as well as ensuring that the fast-moving trends and different consumer behaviour of the younger generation is more widely understood. In order to do this, we need to make the workforce more accommodating to those at retirement age and make knowledge sharing the norm. Many of the ‘nice-to-have’ activities of mentoring, reverse mentoring, human libraries, workforce mobility, flexible working hours and work-life integration will have greater business value when applied, intentionally, to the older generation.
It’s important not to make any assumptions, especially based on generational theory, but becoming a cutting edge workplace means overcoming lazy stereotypes and actually engaging with every age demographic to understand their unique challenges and opportunities.
All of our common workplaces practices need to be reevaluated in light of these generational differences. One-size-fits-all benefits, for example, have been declining in recent years but very few Reward teams are explicitly looking at everything that is available (e.g. help to buy houses) that could be particularly useful for only specific ages of the workforce.
Overall the changes create a new (or at least expanded) diversity issue where understanding, of each other but especially by leaders and HR teams, will allow us to maximise the value of these differences.