Employers are not planning enough for the talent 'time bomb' that is heading their way. At the heart of the problem are two central issues. A birth rate that fell for a whole generation combined with very different attitudes to work and careers among recent graduates. This is creating a real headache for business. More employers are chasing fewer employees, many of whom are, in any case, increasingly turning their backs on traditional corporate life. The talent pipeline is being squeezed and companies need to adapt to stay relevant and attractive to today's graduates.
In his 1990s book, Age Wave: How the Most Important Trend of Our Time Will Change Your Future, Ken Dytchwald made the case that as post-war baby boomers continue to age, our focus will have to shift from an emphasis on the young, to catering to the needs of a larger elderly population, putting considerable strain on healthcare, pensions and many other related services. In a striking image, he characterised the baby boom generation as a pig that had been swallowed by a python, gradually moving through it and making its presence felt at every stage.
One area where baby boomers have made their presence felt, is in their reduced birth rate. In the UK, births per woman fell steeply from 2.93 in 1964 to 1.69 in 1977; a rate that stayed roughly the same through to 2001, since when it has begun to rise again.
The children of baby boomers (Generation X) are generally far more interested in working for themselves as they have been fed an increasing diet of self-belief and personal coaching. A trend that is in turn even more strikingly apparent in their children, the Generation Y that is just starting to filter through into the workforce now.
Younger generations watch programmes such as 'The Apprentice' and 'Dragon's Den' because it has become cool to be an entrepreneur. How this has changed! I remember when I was thinking about setting up my company some 20 years ago. Then, one of my considerations was the loss of status of going from a senior management role in a major UK company to running my own business.
I received plenty of cold shoulders. I had become a 'supplier'. Nowadays, however, I'm invited onto panels to talk about being an entrepreneur. Young people want to hear about my experience because they all seem to be budding entrepreneurs themselves. Going it alone is respected and many of the pregnant lawyers and bankers that my company coaches are racking their brains to come up with the next big baby-related product idea so they can jack in the corporate slog and find that elusive life balance by working from the kitchen table with their baby cooing in the pram nearby. Obviously we disabuse them of this notion as working for yourself is not as easy as it might seem and it is definitely not for everyone. But for those that it does suit, it gives autonomy and also a certain status now too.
The SCARF psychological model says that people are motivated by Status, Certainty, Autonomy, Relatedness and Fairness. Now that corporate jobs don't offer the status and certainty that they used to, and they definitely come up short on autonomy, then that takes you to the other two - relatedness and fairness. For younger people there is a question mark over whether corporate life has much meaning and even whether it is fair. If you run your own show you can decide on your own approach to those criteria. No amount of CSR activity on the part of corporates will convince the internet generation of their good intentions if other stories to the contrary can be found at the click of a mouse.
Corporates have their work cut out if they want to attract and retain the brightest stars coming out of universities today. This is compounded as Generation Y is also known as the 'Me Generation' as they like to have their experiences tailored specifically. Companies obsess about treating staff equally and so it's simply impossible to tailor anything for one person. If someone wants to attend their creatively inspiring sculpture class on a Friday afternoon but promises that their quality of output won't suffer, or indeed will be enhanced by this concession, there is absolutely no way that HR can let that happen without worrying about everyone else wanting a Friday afternoon off.
The challenge for organisations is to recognise the various life stages that their workforce is at, and that includes those coming to the end of their corporate career but not coming to the end of their working lives. These individuals have more in common with Generation Y than their Generation X colleagues. They can see the benefits of working more flexibly, and now that final salary pensions are a thing of the past, they want to wind down without retiring. An issue for companies is retaining corporate wisdom. With people moving jobs often, there are times when there is very little retained corporate memory. Baby boomers provide that memory as well as the human experience which is often under-estimated. There is an upside to having people around who have seen it all before; it's not all cynicism, it's also insight. Generation X is facing its own challenge of being caught in the 'care squeeze' with their children staying at home and being dependent for longer, whilst simultaneously also caring for elderly parents.
Companies must flex more dynamically around individual experience and life stage. It simply isn't going to cut it if the company is constantly in consultation about its HR policy only to find that once it has finally been agreed it has already lost any relevance!