The New Workforce
Forget about the baby boomers. Quit thinking about Generation X. U.S. employers are about to be faced with a new set of employees whose influence will be greater than that of the two previous generations combined. Whether they are called Generation Y, the Millenials, or echo boomers, the members of this demographic group have the potential to significantly shape the workplace over the next decade as they embark on their careers.
Who is part of this new workforce? What are the forces that are shaping it? What will this workforce contribute to the workplace and what will it demand in return? How can employers smoothly integrate Generation Y into their operations? The following analysis provides employers with a glimpse into their future.
Who is Generation Y?
To start with, Generation Y is a huge demographic group. It includes individuals born between 1977 and 1997, a period in which baby boomers produced numerous offspring. Immigration also has contributed to the ranks of Generation Y; about one-quarter of new immigrants to the United States in the 1990s were under the age of 19, according to the U.S. Census Bureau. As a result of these two forces, Generation Y, with more than 80 million members, outnumbers the baby boom generation by more than 3 million people.
Clearly, not all members of Generation Y are alike and there are dangers in generalizing about any large group of people. Still, physical, social and cultural forces undeniably shape the mindsets of different generations. Consider the "G.I. Generation," born between 1901-1924, which came of age during World War II and was known for its respect for government and its patriotism. Or, the "Silent Generation," born between 1925 and 1942, known for its post-war stoicism and its ability to take adversity in stride.
The largest — and most influential — generation of the past century has been the baby boomers, born between 1946-1964. Growing up in a time of prosperity, boomers essentially created and defined a vast American middle class. A much smaller group of people, born between 1965-1976, comprises Generation X, a more independent and cynical generation.
Like these generations, Generation Y also has been shaped by forces unique to the era in which its members grew (or are growing) up. While no characteristic will apply to everyone in Generation Y, certain patterns of behavior are evident.
Sunny side up.
Many demographic analysts say that Generation Y is an optimistic generation, with a much sunnier outlook than that of its predecessor, Generation X. Neil Howe and William Strauss, authors of a book on Generation Y called Millenials Rising: The Next Great Generation, say that growing up in tranquil times has created a more upbeat group: "In attitudes and behaviors, they’re striking out in new and distinctly un-X-like directions. In recent years, nearly every youth indicator has taken a strikingly positive turn. The old youth angst, cynicism and alienation are giving way to a new confidence about the future and a new trust in parents and authorities."
To a large extent, this new attitude has emerged because Generation Y can’t really recall any bad times. Teenage Research Unlimited (TRU), an organization that collects marketing data on U.S. teens, says that to this generation, inflation, recession, and unemployment are foreign words. Their exposure to war has come in the form of peacekeeping missions and the only shortage with which they are familiar is the labor shortage, a situation that merely makes them more confident in their ability to find rewarding, highly compensated, work.
Vive la difference.
Generation Y has grown up in an environment more diverse than previous generations ever could imagine. A TRU survey shows that almost four in ten (39 percent) teens attend schools in which many of the other students have different racial or ethnic backgrounds from their own. Almost two-thirds say they have at least one close friend who is from a different racial or ethnic group.
In addition to interactions with diverse groups of people at school or in the neighborhood, the youngest children of Generation Y also are more frequently exposed to different people and cultures through the media. Unlike adult television, which is perpetually under fire for its lack of casting diversity, children’s programming tends to better reflect the changing demographics of the country. Terry Jackson, writing in the Miami Herald describes the proliferation of shows such as WB’s "Static Shock," and Nickelodeon’s "Taina," and "The Mystery Files of Shelby Woo," in which non-whites play the leads. While public television children’s programming has focused on inclusiveness for some time, commercial television, long a straggler in this area, is finally catching up, Jackson argues.
In addition to greater exposure to multiple racial and ethnic groups, the family life of Generation Y is considerably different from that of previous generations. One out of four members of Generation Y lives in a single parent household and three out of four have working mothers. And, while there are no reliable figures to cite, anecdotal evidence suggests more children are being brought up by openly gay and lesbian parents, a fact not escaping marketers. A new ad campaign by The Mitchell Gold Company, a North Carolina-based furniture retailer, uses photos of children playing with their same-sex parents to showcase the company’s latest products.
For employers, the diverse experiences and cultures of those making up Generation Y may smooth the process of accommodating differences in the workplace, reducing the potential for discrimination claims. On the other hand, this generation is coming of age in an era marked by the direction of sexual imagery at younger and younger children. It remains to be seen if this hypersexualization will spill over into the workplace.
Show me the money.
Generation Y is used to making — and spending — money. According to the Gartner Group, American teenagers were directly responsible for $125 billion in sales and indirectly responsible for more than $200 billion in 1999. The Economist reports that the average American teenager has about $60 of income per week, from allowances, babysitting and other part-time jobs. Evidence of the sheer purchasing power this generation possesses? The recent craze for Razor scooters is making the small company that manufactures them more money than Mattel makes from its Barbie doll. What does this mean for employers? Increased salary pressures from workers looking for compensation packages that will allow them to retain their financial influence.
Companies understand the power of the teen dollar and are spending significant portions of their advertising budgets on materials aimed at this group. But, despite the barrage of advertising and marketing directly targeting them, members of Generation Y tend to be skeptical consumers. A recent article in Information Week about pitching to teens suggests that Generation Y distrusts most marketing claims and prefers to independently research products themselves. For employers, this means that information conveyed by recruiters and interviewers will not necessarily be taken at face value. Company materials, including websites, will need to offer potential hires easy, independent, access to the types of information necessary for evaluating employment offers, including current company financials, innovative human resource practices, and the organization’s long-term business strategy.
Although they may be skeptical of advertiser’s claims, Generation Y loves brands. When they find a product they like, they flock to it in droves. From Air Jordan shoes to Abercrombie and Fitch clothing, Generation Y can make or break entire product lines based on their support for a particular brand. Eric Cohen, CEO of Funderstanding, a research organization that monitors teen behavior, tells Information Week, "Kids will say they think advertising is stupid, but at the same time, they love branded content. They’re so image conscious that if a brand doesn’t represent who they are, they’ll dismiss it." Employers should take note – attracting members of Generation Y will require organizations to project images of themselves as cool, hip, fun, popular places to work. Establishing a strong brand identity as an employer of choice will be crucial.
TRU says mass production is okay with Generation Y, as long as the products or services can be customized to fit their individual needs. From burning their own CDs to selecting the color of their laptop, teens have rejected the notion of one-size-fits-all solutions. This puts pressure on employers to come up with personalized compensation and benefits packages, career tracks, work schedules and job assignments. The U.S. Army has wasted no time in appealing to Generation Y’s sensitivities. It recently changed its slogan in recruiting advertisements from "Be All You Can Be" to "An Army of One."
Centers of the universe.
The employees entering the workforce in the next few years are the same individuals who were ferried around in cars adorned with "Baby on Board" signs and "my child made the honor roll" bumper stickers. Frequently, those cars were going to soccer practice, dance lessons, language class and other extracurricular activities.
While Generation X was characterized by latchkey kids left to fend for themselves, Generation Y is populated by individuals who have occupied the center of their parents’ universes. With the proliferation of cellphones, e-mail, Nannycams and other technological gadgets, parents and children are never far from one another.
This trend could have negative consequences in the workplace if members of Generation Y have trouble adjusting to an environment that does not revolve around their needs and concerns. It also suggests that work and family issues will remain high on the list of employee priorities – flexible work environments that allow strong family connections will continue to be highly valued.
Pressure to excel.
Generation Y has been operating under pressure to excel their entire lives. The demands on Generation Y to excel in school, sports, the arts and other activities are intense. It is no longer enough to aspire to go to college; instead, students must go to the best colleges. Merely playing in the band is not an acceptable extracurricular activity – students must strive to become "first chair" or to be offered a solo.
The fierce competition to get into Ivy league and other top university programs, coupled with parents’ burning desire to give their children access to the tools they need to land high-paying jobs, has created an extremely competitive atmosphere for high school and college students. Medical professionals report increased incidences of stress-related illnesses and diseases among U.S. teens, brought on by the pressure to aim higher, do better and achieve more. This attitude is likely to spill over into the workplace, leading to demands from Generation Y members for constant feedback, lofty goals and significant rewards. Employee Assistance Programs also could see a boom in business as Generation Y struggles with the burnout and stress that often comes with striving to overachieve.
Unfit for duty?
While Generation Y has had the benefit of excellent medical care, it may become one of the least healthy generations if it does not eliminate some of its bad habits. The largest percentage of cigarette smokers, for example, are between the ages of 18 and 24, according to the Centers for Disease Control. Smoking rates among high school students rose throughout the 1990s, despite the development of anti-smoking messages aimed at teens and children. In addition, members of Generation Y are far less physically active than previous generations. One in three U.S. high-school students does not participate regularly in vigorous physical activity.
This doesn’t bode well for employers. According to a recent study of six companies by The Medstat Group, former smokers cost the organizations $4.5 million annually in health claims; overweight employees, $3.2 million; and current smokers, $2 million. If these numbers are extrapolated nationally to employers of all sizes, the figures indicate that U.S. companies spend close to $250 billion annually for medical care related to unhealthy habits and modifiable health risks. As a result, wellness and disease management programs may be increasingly important for holding health care costs in line as Generation Y enters the workplace.
Political (in)activism.
A recent survey of 18-24 year olds in the United States by the Campaign Study Group for Medill News Service shows that the oldest members of Generation Y are less interested in politics than the rest of the population. Only 28 percent said they follow developments in government and public affairs regularly; 35 percent said they pay attention "now and then" or "hardly at all."
Not surprisingly, Medill says, this detachment is reflected in the voting booth. Turnout among young voters has declined from 50 percent in 1972 to 32 percent in 1996. Twenty-seven percent of the respondents to the survey are not even currently registered to vote. The implications of this apathy? Unless it changes, baby boomers will continue to wield power at the ballot box, pushing the concerns of older Americans to the fore of U.S. politics.
Techno-savvy.
According to Teenage Research Unlimited, Generation Y is more comfortable with technologically advanced products and services than is any other age group. Not only did many of the toys these teens first played with as children involve computer chips or keyboards, students were taught in elementary school how to use a computer. Teens are often the "techies" of their households, TRU says, installing PCs, programming their parents’ voice mail and introducing older family members to the Internet, instant messaging and wireless technologies.
The difference between the techno-savvy of Generation Y, as compared to Generation X, a group that also was exposed to computer technologies during its formative years, is one of degree, but it is still profound. Generation Y has grown up amidst more sophisticated technologies and has been exposed to them much earlier than members of Generation X ever were. According to Colorado research firm Quality Education Data, the average public school student-to-computer ratio was 75 pupils per computer in 1985, compared to 10.5 pupils per computer in 1995. In 1992, only 7 percent of schools had CD-ROM’s; by 1997, 74 percent did.
As a result, employers can expect new entrants to the workforce to be technologically-adept as well as technology-dependent. This is a group that grew up with e-mail, not U.S. mail, and they will be attracted to employers that expose them to new technologies as they are developed.
Generation Y’s comfort with technology makes multi-tasking easier for them. Typical teenagers doing their homework on their computers are simultaneously using a word processing package, surfing the Internet, chatting with friends via instant messaging programs, downloading music, listening to a CD and talking on the telephone, all while the television is turned on in the background. The good news for employers? Generation Y will be good at engaging in multiple tasks, filtering out distractions and juggling numerous projects. The bad news? Short attention spans, the constant need for stimulation/entertainment and a blurring of the lines between work and leisure time while on the job.
Global Citizens.
Generation Y will be the generation best prepared for globalization. They have always been exposed to easily accessible world news — CNN started bringing round-the-clock international news into U.S. homes around the same time that the first members of Generation Y were born. As a result, they cannot remember a time when world news was relegated to just a few short minutes on the nightly network newscast.
In addition, Generation Y is coming of age during a time when global tastes are harmonizing. McDonald’s restaurants can be found in more than 30 countries and Pokemon cards from Japan were all the rage over the past couple of years. The same cultural influences that are shaping members of Generation Y in the U.S. are shaping teens across the globe. These shared experiences will promote understanding and cooperation as Generation Y becomes involved with international commerce.
The ability to reach across countries and cultures via technologies such as the Internet also is creating a more globally aware generation. Last year’s protests in Washington, D.C. during the International Monetary Fund and World Bank meetings, which were dominated by individuals from the tail-end of Generation X and the early years of Generation Y, coalesced mainly through calls for action posted on websites.
For employers, Generation Y’s exposure to and comfort with a global culture will be extremely helpful as business becomes less domestically-focused. Respondents to a survey by the California-based Center for Global Assignments reported that by 2005, they expect at least half of their business to be conducted in non-U.S. markets. To succeed in this environment, organizations will need employees who can recognize global business opportunities and mobilize organizational resources to capitalize on them, two skills Generation Y just may bring with them.
International slackers?
Generation Y will face stiff competition on the international level, however. According to the Third International Mathematics and Science Study, an international test in which U.S. eighth graders participated in 1999, U.S. students lag many of their peers in other industrialized countries in both math and science. Students in Australia, the Flemish (Dutch) part of Belgium, Canada, Taiwan, Finland, Hungary, Japan, Korea, Netherlands, Singapore, the Slovak Republic and Slovenia all outperformed U.S. students when tested on both subjects. Students in Bulgaria, Latvia and New Zealand scored about the same as U.S. participants, and students in 17 other, typically less industrialized countries, fared worse. Subjects covered include algebra, geometry, physics, and chemistry.
The mediocre performance of U.S. students wasn’t news to educators – the students performed just as poorly when the study was last conducted in 1995. The issues holding U.S. students back may include less time spent on homework, fewer teachers with degrees in the subject taught and fewer hours of sleep, when compared to their counterparts who scored higher on the tests.
This doesn’t bode well for U.S. workers as cross-border barriers to employment drop. If the results are indicative of the skills and knowledge new graduates will bring to the workplace, employers may go elsewhere to staff their operations as obstacles to international hiring are eliminated.
Generation Y’s Impact on the Workplace
Employers already are seeing the oldest members of Generation Y enter the workforce. According to a survey by the National Association of Colleges and Employers (NACE), employers are putting a lot of emphasis on college hiring as a way to combat the tight labor market and they are expected to make nearly one-fifth of their job offers to new college graduates in 2001.
Generational tensions.
The introduction of Generation Y into the workplace will raise the possibility of both intergenerational cooperation and intergenerational conflict.
Asked to recall where they were when Kennedy died, members of Generation Y conjure up images of Martha’s Vineyard and a plane crash, instead of Dallas and a motorcade. In spite of this, Generation Y and the baby boomers seem poised for a close relationship.
Generation Y is entering the workforce just as boomers are beginning to wind down their careers. During this overlap in tenure, knowledge and skills will need to be transferred through formal mentoring programs and informal learning. In contrast to Gen Xers, Generation Y is less likely to chafe at this process because they do not perceive boomers as competitors blocking them from advancement.
In addition, Generation Y may be more accustomed to viewing older Americans as authority figures. According to the U.S. Census Bureau, the number of children under 18 living in households headed by a grandparent climbed from 2.2 million in 1970 to 3.9 million in 1997. In 75 percent of the households in which grandparents and grandchildren live under the same roof, the grandparent(s) is the head of the household. Employers can take advantage of the warm feelings between the two generations to facilitate the transfer of institutional knowledge the boomers will otherwise take with them when they retire.
Unfortunately, employers probably can’t expect the same peace between Generation Y and Generation X, at least initially. Already there is talk of Generation Xers viewing the workplace newcomers of Generation Y negatively. A recent article in The New York Times quoted several Gen Xers who expressed consternation that members of Generation Y did not want to perform entry-level assignments. A publicist in New York recounted an experience she had with a recent hire. The publicist said the new employee came to her just days after starting her job, asking for a plum assignment that included walking Madonna into a launch party. The publicist complained that the new employee should have recognized that she was lucky to even be going to the party.
Employers may be able to mitigate some of the tensions by pointing out to Xers that the stereotypes they are applying to Generation Y, were, at one time, also leveled at Generation X. While real differences between the generations do exist, the displeasure with new hires’ attitudes is an age-old phenomenon.
One note of caution, however. While generational conflict has always existed in the workplace, the arrival of Generation Y puts Generation X in a tenuous position – with two powerful groups on either side of it, the concerns and issues unique to Generation X may be overlooked or dismissed by employers seeking to satisfy their largest constituencies. And, if Generation Y does form strong bonds with the baby boomers, it may try to capitalize on these ties to leapfrog over Generation Xers into positions left vacant by retiring boomers.
Expectation differences.
In addition to generational issues, high expectations among Generation Y may be problematic. Deborah Rothstein, the executive director for career services at Columbia University, told the New York Times, that she believes "there’s a general sense of entitlement among Gen Y’ers, which comes from them knowing that it’s the strongest job market – they know that if they don’t get a job they want, they’ll go freelance. A lot of kids come to me and say ‘I’d like to be making six figures within six months.’ They all want to be challenged immediately and expect opportunities for international travel – within two months of starting work." Helping Generation Y manage their expectations will be a challenge for employers who may not be able to compensate or advance workers at the pace they demand.
Recruiting the…parents? As a result of the hypervigilance among the parents of Generation Y, "I have to ask my dad first" could become a frequently heard hiring refrain. Both college admissions officers and employment recruiters are reporting that an increasing number of students are consulting their parents before making enrollment or employment decisions. A survey by the National Association of Colleges and Employers found that 45 percent of students say their parents’ opinion of potential employers is important or extremely important. This means employers have to appeal to two constituencies that sometimes have very different concerns. Organizations will have to show that they are simultaneously entrepreneurial and stable; supportive, but not paternalistic; innovative, yet still focused on the basics.
You went to school where?
Generation Y is the first generation to have multiple educational choices beyond public schools or private schools. The proliferation of new educational options, including home schooling, online schools, charter schools, school vouchers, and bilingual schools, to name a few, will make the hiring process more challenging for employers. Employers accustomed to evaluating candidates based on traditional schooling may find appraising the skills and knowledge of candidates with non-traditional educational backgrounds difficult. They increasingly will find themselves with resumes and applications that list degrees, certificates and coursework completed through unfamiliar universities and programs. And, because many of these educational options are relatively new, employers will have no experience with previous graduates to use as a guide. What will be the solution? Watch for more emphasis on skills-based testing and increased focus on the accreditation and certification of both individuals and educational programs.