Human Capital Management

It is a commonly held belief that younger generations in the workplace today hold different attitudes from their older colleagues and therefore HR programmes need to be adapted accordingly. From the Baby Boomers to Generation X to Generation Y /the Millenials/the iPod generation, pundits tell us of the differences.  According to Martin and Tulgan [1] 42% of the current workforce consists of Baby Boomers (born 1946 to 1964), 29% consists of Generation X (born 1965 to 1980) and 22% of Millenials (born 1981 to 2000). The balance of 7% belongs to the Traditionalists (born 1922 to 1945). It would seem that HR practitioners need to carefully segment the employee population based on age before determining the appropriate approach.

Real or not?

But are these generational differences real and what are they based on, or have other factors been misinterpreted as generational? And how much relevance do these international ideas have for the employee population in South Africa?

According to an American political historian, Arthur M Schlesinger, key historical events that take place during young adulthood shape a whole generation’s outlook or identity. Material from Triple Creek Associates [2] on generational differences discusses that not only “generational events” (such as The Civil Rights Movement, the spread of AIDS or the current banking crisis), but also advances in technology and access to information affect how different generations work. One recent example of a new type of entrepreneurial funding seems to build on all of these factors – the spread of what is known as “crowd-funding” where a would-be entrepreneur, unable to obtain funding through traditional sources, seeks small amounts of funding from large amounts of people via social networking or websites [3]. The Triple Creek material referred to above describes the usage of the Internet by Baby Boomers as “playing catch-up”, that of Generation X as “savvy and literate”, while that of the Millenials is described as  “savvy and unconsciously competent”). These references, of course, refer to people growing up with easy access to the Internet and computer technology – for many youngsters in South Africa that was not the case and they may well be more like the Baby Boomers in that, given belated access to the Internet, they are currently “playing catch-up”. A major “generational event” in South Africa was the advent of democracy in 1994 and the generational effects of this are still being evaluated – some observers believe that this has brought in a highly materialistic society for the South African Millenials, who are too young to have experienced the terrible effects of the apartheid era.

The argument for generational differences that demand significant adaptations to the workplace was put forward in the Deloitte 2008 study Decoding Generational Differences[4]. This study concluded that, while “all generations basically want and value the same things … people want them delivered in different packages”.  The adaptations to the workplace that the study recommends seem to incorporate many of the good leadership and HR practices that are commonly recommended to improve employee engagement such as opening up communication, improving basic leadership skills and offering people flexibility in the way they work.

A Financial Times article published by Business Day on 19 June 2009 discusses two studies from overseas that seem to show that young people’s attitudes towards work and their employers are not as different from previous generations as had been thought. The US Centre for Work-Life Policy has just published a study called Bookend Generations which finds that both Baby Boomers and Generation Y-ers “crave flexibility, personal growth, connection and opportunities to give back.” [5] The London Business School Centre for Women in Business also has new research into individuals in their 20’s working in companies or studying for MBA’s. This research is called The Reflexive Generation and the findings also show similarities between generations, one of which is loyalty/commitment to an employer. Two key factors do seem to set the younger generation apart, according to this study, and these are the ability to cope with very rapid changes in the use of technology and the disappearance of the “job for life”.

Dr Mark Bussin, in a presentation to an IPM seminar in May 2009, reported recent research that his company, 21st Century Pay Solutions, has conducted in South Africa, showing that different generations do not have different reward preferences – the difference in reward preferences of individuals seems to lie in lifestyle preferences rather than generational differences. For example, people may choose more annual leave rather than, for example, higher base pay, because they value their leisure time highly, but those people may be of various generations, not only the Millenials.

Differentiating the employee population

The construction of segmented Employee Value Propositions, therefore, needs to be approached with caution. In any specific industry, the preferences and outlook of people attracted to that industry probably do not reflect the “average” of the total employee population in the labour market. A simple example is the ITC industry, which attracts people who are comfortable with advanced and rapidly changing technology, as compared with the construction industry, which attracts people who are physically energetic, like solving practical problems daily, like working outdoors and like to see the very tangible output of their work. The similarities between such people in an industry could be more significant than generational differences. It would be advisable therefore to conduct in-company research quite carefully before making any assumptions about attitudes and preferences of employee groupings. (This might be a good assignment for an HR member of staff doing post-graduate studies, or for a post-graduate intern.)

Based on the results of such research, thought should be given to whether there are identifiable segments of the employee population in a company, what those segments might be and what are their defining attributes.  From that point, the HR team can scrutinise the company’s business processes as well as HR practices and programmes to identify where, if anywhere, current practices are not conducive to the best engagement of the various segments and what might be done to improve the Human Capital Management of the company.

[1] Managing the Generation Mix, Carolyn Martin and Bruce Tulgan, HRD Press, 2nd Edition, 2006

[2] www.triplecreek.com

[3] http://www.kickstarter.com

[4] Decoding Generational Differences: fact, fiction – or should we just get back to work? W. Stanton Smith. Deloitte Development LLc. 2008.  A summary is downloadable from http://www.deloitte.com/assets/Dcom-UnitedStates/Local%20Assets/Documents/us_Talent_DecodingGenerationalDifferences.pdf

[5] http://www.worklifepolicy.org/index.php/section/research_pubs#278