It’s generally accepted that individuals will need retirement savings of roughly 16 times their pre-retirement salary, and that social security will cover only 4 times salary at most. It is also generally understood that most individuals cannot count on employer-defined plans to fund that missing 11 times salary – but how much is very different by generation.
An Aon Hewitt study reported in Benefits Quarterly predicts that Boomers will be responsible for generating roughly 6.3 times salary out of their own savings while Millennials are faced with a daunting 10.5 times salary gap. The upside, of course, is that Millennials still have plenty of time to contribute, however very few are approaching retirement planning as aggressively as they should.
This presents employers with an opportunity to help their youngest employees to help themselves. Young employees are less likely to have established financial advisor relationships and may not know where to turn for advice, other than their parents and peers. Providing regular retirement planning education can help this important employee base understand their options and be more confident about the future. Demonstrating an interest in their future success – even while knowing how unlikely they are to stay with the same organization for long – will help with their loyalty, both as employees and as future centers of influence.
Can anyone guess why there are so many more young people in this section of Canada? The grey background reflects the entire Canadian population. The bars reflect the specific area discussed in the slide. Big discrepancy here – why? Let me know if you can figure it out and I’ll send you the book of your choice of mine.
An article in The Economist this month got me thinking about how different generations value time. The piece talks about three types of business clutter – organizational clutter, meeting clutter and email clutter. None of these is a shocking revelation to anyone who works in a large organization. The demands on time are significant, and often not related specifically to the task at hand. In fact, a colleague recently shared that when her boss asked for yet another report, she had to tell him “I can do the report, or I can do the work that the report is about, but there’s just not enough time to do both.”
That comment was from an Xer – mature enough in position to have that conversation without getting fired, but echoing the sentiment of many employees, especially younger ones. Time is a true currency, yet companies spend an inordinate amount of time in meetings and “touching base” – to the extent that the actual work is getting harder to get done. Is this the result of Boomers—who tend to value face time and a commitment to the team—being at the helm? Do companies run by younger generations operate more efficiently? Or is it a natural progression of a more dispersed workforce made capable by technology? Perhaps a little of both.
The final line in the Economist article could easily have been the whole article “the most valuable resource that many companies have is the time of their employees. And yet they are typically far less professional about managing that time than they are at managing their financial assets.”
What can you do, today, to start treating your time – and that of your colleagues – as professionally as you do your clients and your finances?
A friend told me about the new Miranda Lambert tune and it made me chuckle. At the ripe old age of 30 years, Lambert is a Millennial. Yet here she is singing about the good old days of hard work and paying your dues. And I did my homework with good ol’ Google – Lambert isn’t just singing a lyric written by a Nashville old-timer; she wrote it.
The chorus is especially amusing for someone who was only 15 when the Internet went mainstream:
Hey, whatever happened to waitin’ your turn
Doing it all by hand,
‘Cause when everything is handed to you
It’s only worth as much as the time put in
It all just seemed so good the way we had it
Back before everything became automatic
Though the song is clearly about life in general, not the workplace, it absolutely suggests a work ethic that resonates with Boomers. Perhaps Lambert is an “old soul” or maybe a cusper – one who was born in one generation but identifies more closely with the characteristics of another. Either way, the song is a reminder that almost everyone looks back on their youth with a sense of nostalgia…even those that many would consider to still be in their youth.
The numbers show it. And so do the conversations. Generation X is stuck in the middle. In “10 things Generation X won’t tell you” MarketWatch author Quentin Fottrell delivers a fairly thorough assessment of why Gen X is “poor, ignored and jaded.”
Gen X numbers roughly half to two-thirds of its generational peers. Depending on whose statistics you use, there are about 49 million Xers compared to 75 million Boomers and 89 million Millennials. No wonder people aren’t paying as much attention anymore. But it’s more than that – Xers have been around a while. They were the thorn in the side of management years ago, but the Matures who truly didn’t understand them are almost fully retired and the Boomers have gotten used to them. The Millennials, though, are bringing a whole new set of headaches and tech-savvy. So they get the focus.
But what does this mean for advancement? If Boomers are staying around longer and Millennials are being closely studied and groomed for leadership positions, are Xers doomed to middle management forever? That’s the story behind points 6 and 7 in Fottrell’s article. Boomers are sticking around and Millennials are impatient to get ahead, so Xers aren’t feeling overly optimistic.
Could this mean even more entrepreneurism as jaded Xers set sail for unchartered waters where they will at least be in control of their own destiny? Seems very likely…at least once they get out of debt and have more flexibility to do so.
Facebook COO Sheryl Sandberg made big waves with her book, Lean In. But a recent study of Millennials, conducted by Bentley University’s Center for Women in Business, seems to agree with her assertion of an ambition gap among female workers.
According to the study, while nearly 20% of Millennial women seek to emulate women leaders in their companies, another 20% have “no interest in becoming a leader at my current company.” Of course that leaves a good majority floating somewhere in the middle.
It’s even more interesting when you apply the assumptions these Millennials are making about the women CFOs in general:
- More than 60% believe women leaders have to hide their femininity to fit in
- Roughly 50% believe women leaders are less likely to have children AND probably do not have time be as good a mother as they could be
With Millennials’ strong sense of self, and wanting to be accepted for who they are, it’s not surprising that these assumptions would make Millennial women less interested in becoming leaders. The challenge for companies – at least those that want to encourage women leaders – is to create an environment where these assumptions are refuted.
The Millennial workforce rivals Boomers in size, but not necessarily in availability. This creates an interesting conundrum for recruiters. While there should be more supply than demand (and in some industries there certainly is), companies are still competing hard for the best talent.
Those with traditional business models, such as public accounting, are particularly at odds with the Millennials’ more relaxed approach to work. How do you entice with promises of work-life balance in a business with a “busy season” that has young employees averaging 60+ hour work-weeks? Very carefully.
Maybe the balance isn’t about the number of hours worked each week, but rather about the flexibility of time within the parameters of the job all year. What does work hard, play hard mean? Have you created an environment where someone who wants to come in early can also leave early (or vice versa) in order to fit personal commitments in with job requirements? Campus recruiting should use such concrete examples. Generic terms such as “work-life balance” are apt to be interpreted quite differently by someone who has been in the 9-5 workforce for decades and one who has only lived a student life. Bold promises may bring them in the door, but if the reality doesn’t match, they’ll be scheduling an exit interview before too long.
With the recent Supreme Court decision excusing Hobby Lobby from providing certain birth control options in its employee health plan and the goal of Obamacare to make health care affordable and accessible to all Americans the employer-assisted health plan is getting tons of attention. We know costs keep rising and many employers are passing more and more of that cost on to employees. And with the rise in part-time and contract workers, employees are finding themselves increasingly ineligible for employer plans.
Will all these trends converge to make employer-provided coverage a relic? I don’t see it happening right away, but I can’t count it out. As the nation gets less healthy and the need for insurance rises, one would think employer-supplemented plans will continue to be highly desirable. But with the younger generations’ affinity for “jobs with a purpose,” which often means being one’s own boss, the availability of individual policies at more affordable price points could take one away from the “pro” column for traditional jobs. If this comes to be, employers will need to be looking at more creative and distinct ways to demonstrate their commitment to employees. Might I suggest underwriting financial advisory services? While that can be seen by some as a blurred line, the fact remains that many of today’s Millennial and Generation X workers are not good with personal financial planning. Helping them budget and manage debt can yield to less stress and better overall work product. Something to consider.
It is fairly common practice for companies to hold team or peer-to-peer interviews for incoming employees, in addition to traditional human resources and manager interviews. The goal, of course, is to make sure that a candidate who looks good on paper is a good fit for the proposed peer team. And since we know that employees are more likely to stay OR leave a job because of the people than because of benefits or pay, this peer interview approach is important. But it is still based on gut feel, a hunch. And let’s be honest, one’s hunch can always be wrong and can shift with the mood of the day.
Some would advocate for a more scientific approach. As Fast Company reports, today’s data-driven society allows for companies to go way beyond Myers-Briggs to understand who their prospective and current employees really are…and how they will best fit. This could be especially useful for Millennials as they have strong innate desire for a sense of belonging and purpose in their work. And while I do believe in data, those personal discussions shouldn’t go away. Science is precise, but it isn’t perfect. After all, the algorithms behind behavioral DNA are similar to those that populate your advertising options on the internet. Sometimes they are eerily spot-on (I was just thinking about buying new running shoes) and other times they are laughably off base (single seniors anyone?).
I was scrolling through the online news when this caught my eye “I think (Generation X) is the last hardworking generation[…]Generations after us have become more spoiled. Kids aren’t disciplined.”
And if it weren’t for the parenthetical I would have drifted right on by, expecting yet another complaint from a Boomer against the Xer work ethic. Except perhaps we’ve outgrown that one. Apparently the Xers are claiming a spot on the “back in my day” soapbox. Was it only a matter of time?
The quotes are from an article discussing the Pew Research Center’s series “The Next America.” That series spans several studies and uses historical trends to predict where we are headed as it relates to societal norms, including economics, social values, family structure, gender and religion. The very real shifts in these societal norms underscore why generational perspective is so important. At the same time, now that Xers, who were once the “kids these days” with no work ethic, are now looking at Millennials and shaking that same finger, it does make you reinforce how the line between generation and age is often rather blurry.